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AmorePacific Signs the Eco-Friendly Ginseng Purchase Contract with Jeonbuk Insam Nonghyup

CSR 2010-07-02

AmorePacific (CEO Suh Kyung-bae) held a signing ceremony on April 20 at 11:30AM at the Jeonbuk Insam Nonghyup auditorium in Jinan-gun Jeonbuk for the purchase of eco-friendly ginseng from Jeonbuk Insam Nonghyup. Moon Byung Yeon, the head of Jeonbuk Insam Nonghyup, Ha Jae Wie, the representative of local Nonghyub’s union, and Shim Sang Bae, Vice President of Production and Logistics of AmorePacific, attended this ceremony. 
With this contract, AmorePacific can expect to obtain the safe raw materials from eco-friendly farming processes, to encourage green-farming through continuous purchases of green ginseng and to contribute to the development of the local region. Once the contract has been signed, AmorePacific expects to use the green ginseng as raw materials for oriental medicinal herbs in the future. 
In order to sign this contract, AmorePacific made great efforts by calling all of the local green ginseng farmers and by visiting them, meeting with them to discover ways to grow together with them. As a result, Jeonbuk Insam Nonghyup, which connects AmorePacific with farmers, started to deal with green ginseng for the first time, even though it did not deal with them before. 
As eco-friendly ginseng grows as perennial crop with no artificial chemical ingredients, it is difficult to produce them and to predict their crop. Farmers were not willing to attempt to grow green ginseng, as they were unsure about its profitability. However, AmorePacific intends to guarantee the cost due to change of green ginseng yield. So it seems that farmers' growing green ginseng will be positively recommended. 
Shim Sang Bae, the vice president of Production and Logistics of AmorePacific, who attended the signing ceremony, said, "I would like to say ‘thank you very much’ to the farmers here who will grow eco-friendly ginseng for us with body and soul. We will do our best to have this ginseng applied to our products to give health and beauty to our customers. And we will make efforts to make profits for farmers and to advertise Jeonbuk Insam Nonghyup’s eco-friendly ginseng." 
ARITAUN GUMAE (Beautiful Purchase) is a program for purchasing substainable raw materials, and is being carried out for the first time in the domestic cosmetics industry. This program is designed to contribute to the environment and society positively by following three principles of raw material safety, environmental protection, and contributions to the local community in the processes of selecting and purchasing raw materials. AmorePacific already promised that they would buy the raw materials of camellia produced by eco-friendly methods from Dongbaek community in Jeju Island on February 2010. AmorePacific will keep increasing ARITAUN GUMAE through cooperation with local communities. 
[Note 1] Three Principles of ARITAUN GUMAE of AmorePacific 
1. Raw material safety: Thorough monitoring of the farming processes so customers may use with confidence 
2. Environmental protection: Effects on the environment to be minimized in the processes of farming, processing and delivery
3. Contributions to the local community: Contributions to the development of the local community by continuously using the raw materials produced in the local community 
[Note 2] Present condition of eco-friendly ginseng 
The total production of ginseng in Korea is about 25,000 ton, as announced by the government in 2009, and it increases by 10% every year. However, the market share of domestic ginseng in the world fell drastically from 70% in the 1970s to 3% in the 1990s. And the market share is lagging behind countries like Canada and USA. The problem was that they did not reflect the needs of customers on the market trends which prefer eco-friendly farm products and products with ginseng included. At present, out of a total of 25,000 tons of ginseng in the domestic market, the rate of organic ginseng is no more than 1%. And most of it is produced in the region of Jeonbuk. 
[Note 3] AmorePacific’s old connection with ginseng
Suh Sung-whan, former chairman and founder of AmorePacific, went to the South Gate, the large Gaeseong market from his childhood, to become familiar with various oriental medicinal herbs and ginseng. He helped his mother in their store and came to understand the importance of good materials and quality at an early age. From that time on, his confidence in oriental medicinal treatment and herb raw materials led him to develop cosmetics. 
Ginseng SAMMI, the first oriental medicinal cosmetics using ginseng – released in 1973
Chairman Suh founded AmorePacific had an exceptional affection and confidence for ginseng. So he founded AmorePacific. With a confidence that ginseng would be good for skin as much as it is good for heath when it is eaten, he started to conduct scientific research to discover a beauty treatment focusing oriental medicinal herbs. He was struggling to finding out how to extract the beauty ingredients from ginseng. After years of his hard work and effort, he finally got a patent for the extract of effective ingredients from ginseng on October 1972. In the next year, Ginseng SAMMI (a cosmetic containing ginseng saponin) was launched for the first time in the domestic market. In 1975, Ginseng SAMMI adopted the Goryeo celadon for its container design and entered the global market as SAMMI. Again, in 1987, herbal medicines were added and it evolved into Sulhwa. Ten years later in 1997, he finally created Sulhwasoo, the luxury oriental medicinal cosmetic representing Korea. 
Starting a patent on the extract of pure saponin from the flowers and leaves of ginseng in 1972, AmorePacific has acquired as many as 56 patents on ginseng. As one can see, AmorePacific has held an unchallenged position in the field of ginseng.