Value Chain Analysis for Thai Home Textiles

Silk Sub-sector

EU- Small Projects Facility

“The Case of Thai Home Textiles: Building Export Competence of a SME Dominated Value Chain”

A project co-financed by the European Union

On behalf of Institute for Science and Technology Research and Development Chiang Mai University

November 2007 2 Table of Contents Table ofContents .2SpligIdsr 66 65 62 61 60 62 64 64 59 55 60 52 48 4.12 Supplying Industry LocalRetailOutlets 4.11 51 Traders/DomesticWholesalers 42 35 4.10 /Exporters TradingAgencies 4.9 HomeTextileProducers 32 4.8 4.7 Printers 17 32 4.6 Weavers 28 4.5 Dyers Yarn&FabricTraders 12 4.4 26 4.3 Reelers 4.2 Rearers SilkwormEgg Suppliers 4.1 8 4. Industry 6 3.4 Future 6 Structure Thailand’sExport Market Trend 3.3 Demand&EUMarket 3.2 & Trade WorldProduction 3.1 6 3. Market FeaturesofHome Textiles 2.6 Analysis Issues General -HomeTextiles 2.5 FeaturesofSilk 2.4 Issues General - 2.3 2.2 Government of of theDevelopment Background policies Features BasicSub-sector 2.1 fo 2. 1.2 Project & RationaleoftheProject Background Approach 1.1 1. Introduction h ikSbsco 10 r theSilkSub-sector teSl etri hiad 8 theSilk sector inThailand Table of Contents 3 Textile vis-à-vis Competitors 139 promote the Silk Sub-sector Sub-sector promote the Silk 78 of Contract Farming 154 on with existing Services 121 6. 7. Value Chain Analysis 7.1 Analysis Competitive Advantages & Sector Strategies General Review in Thailand 7.2 Competitive Opportunities 7.3 Strategy & Summary of Competitors 7.4 Competitive 8. Constraints 8.1 Rearers 84 8.2 Pre-processors 8.3 Home Textile Producers 8.4 Issues Trading Agencies / Exporters 8.5 Sector-wide 9. 102 Design 10. Intervention 80 Analysis Opportunity Sub-sector Constraints / 84 91 10.1 Introduction & Background 10.2 Provision of & Satisfacti 99 10.3 94 Intervention Initial Scope & Ideas for 11. Annexes 117 11.1 List of Interviews 11.2 Home of Thai Key Benchmarks 11.3 Description Exports in 2006 classified by HS. Code 106 109 11.4 Term 108 102 111 11.5 Introduction - TLS 8001-2003 Basic 11.6 120 Advantages & Disadvantages 11.7 Testing List of Home Textile 127 11.8 Sources 120 145 151 138 138 150 155 156 5. 5.1 Institutions Organizations Related Institutions & Efforts 5.2 Private 5.3 Government to Initiatives taken 68 75 68 4 Abbreviations FDI FBA FAOSTAT FAO EUR EU-HT EU EFTA EC DSS DOAE DOA DIP DEP Customs CTS CMU CIF CDSC CDD CBI KPI Kg KENAN JICA IST ISO IPC IP IFAT IBEF HS Ha GMO GDP GAP FTA FOB FMC FLO FGM

Genetically Modified Organism Gross Domestic Product Good Agricultural Practices Free Trade Agreement Free-on-Board The Netherlands Development Finance Company Fair TradeLabelling Organisation Fai GaemMai Foreign Direct Investment Faculty ofBusiness Administration FAO StatisticalDatabase Food and AgricultureOrganisation EURO EU-Thailand Home-TextilesProject European Union European Fair Trade Association European Community Department ofScienceService Department ofAgriculturalExtension Department ofAgriculture Department ofIndustrialPromotion Department ofExportPromotion Department ofCustoms Chul Thai SilkCompany Limited Chiang MaiUniversity Cost, Insurance and Freight Centre Service Craft Design Community Development Department Centre forthe Promotionof Importsfrom Developing countries Key Performance Indicators Kilogram Kenan Institute Asia Japan International Cooperation Agency Institute forScience and Technology, Research and Development International StandardOrganisation Industrial Promotion Centre Intellectual Property International Federation for AlternativeTrade India Brand EquityFoundation Harmonised Standards Hectare

Abbreviations 5

Economic and Social Development Board Development Social and Economic

Value Chain Bank World Organisation Trade World United Arab Emirates United Arab United Kingdom Development and on Trade Conference Nations United United States of Agriculture United States Department Thailand Creative and Design Center Center and Design Creative Thailand Limited of Australia and Fashion Industries of Textile Council Thailand Textile Institute Textile Testing Centre Public Relations of Institute Sirikit The Queen Development and Research de Surveillance Societé General Enterprises sized Small and Medium Original Brand Manufacturing Brand Original Manufacturing Design Original Manufacturing Equipment Original Economics Office of Industrial One Product One Tambon Non-Governmental Organisation Non-Governmental National Statistics Office Development Agency Technology and Science National Economics Office of Agricultural Maximum Residue Level Maximum Residue Centre Technology Metal and Materials National Development Economic Northeastern National Shops World Network of European Million Millimetre Co-operatives and Agriculture Ministry of Commerce Ministry of and Technology Ministry of Science

WB WTO USDA VC UK UNCTAD US TTC UAE TFIA THTI SGS SME TCDC QSIS R&D OTOP PR OEM OIE OAE OBM ODM NSO NSTDA NEWS NGO MTEC NEED NESDB MOST MRL MOAC MOC MIL MM 6 Introduction Thisstudy covershometextiles: *

2. Validation workshop and report finalisation report and Validationworkshop 2. analysis Informationgatheringand 1. The studycomprisedtwokeysteps: 1.2 Project Approach with stakeholders. t implementing and gaps the identified The studywillbethebasisforproposing • • • • • • to: This projectwascommissionedinorder &RationaleoftheProject Background 1.1 Introduction 1. • • • Accessory textiles includescarves, napkins, etc. Furnishing textiles includecurt Household textiles includeblanket

textiles* sectoranditscompetitiveness; mobilize the concerned stak mobilize the and forpublic ideas intervention develop baseline data; collect andanalysevalid opportuni identify untapped value; generated of breakdown anda processingSMEsandexporters), (farmers, the mainplayers sub-sectors, andaccessories intoThaihometextiles insight an develop of the overview updated an provide for the validation offindings. for thevalidation

ains, decorative items,etc. s, bedspreads, etc. towels, ties andconstraintsal eholders forcooperati

hose interventions decided upon jointly jointly upon decided hose interventions andcommercialservicesolutions; interventions designedtoovercome actual situation ong the supply chain; ong thesupply on with the project and on withthe of the Thai home Thai home of the Introduction 7

ted in Khon Kaen, chain analysis on agencies and institutes, agencies and institutes,

thorities and representatives of the a basis for the development a basis for of rategies, draft interventions andrategies, draft estic and international stakeholders. estic and ysis were presented to stakeholders e Northeasternchain provinces with oducers, traders/exporters, and other t of this report; niche markets, organic xtiles (see Annex 11.1 a full list of for or map, the value hon Kaen, Chaiyaphum, Roi Et, Buriram rviews were conduc ers, handloom weavers, home textile s value chain basedwas conducted on a together with the stakeholders; epresentatives of public epresentatives of based meetings,with interviews and discussions yarn/fabric pr producers, home textiles informants; key conducting Bangkok- interviewsperforming site-based in th actors (rearers, reelers, yarn dy producers, traders/exporters), au local academic sector. reviewing primary and secondary material; r industry stakeholders, intervention opportunities. validate the the sect main findings of develop a sub-sector strategy assess opportunities and constraints as national and local trends; Nakorn Ratchasrima, Chaiyaphum, Roi Et, Buriram and Surin, which are the main production areas of silk home te interviews). Beside Bangkok, the majority of inte Beside Bangkok,

• • • Step 1 Step 1 (15 March 2007 – 23 April 2007) The analysis of the silk home textile The analysis home of the silk of: combination Resulting from these two steps; st Resulting from these two steps; recommendations been have developed and are presented in this report. Key term descriptions used in the contex and fair trade, are provided in Annex 11.5. Additional validation was sought from dom • • • The main results of the value chainthe value anal The main results of from Bangkok, Nakorn Ratchasrima, K from Bangkok, Nakorn Ratchasrima, and Surin to: Step 2 Step 2 (24 April 2007 – 15 June 2007) 8 Basic Sub-sector Features * Sericultureisproduction ofraw therearingof silkworms silk. the for Sericulture* 2.1 oftheDevelopment Background Silk Sub-sector inThailand Features BasicSub-sector 2. by the Department ofAgriculture andFi by theDepartment attemptwasmadein1941 recovery cocoons. Another industry of goodquality silkworm varietiesthatwouldhavebeen tec lackedtheproper because farmers ar byconstructing revive theindustry silk produce for theirpriv many though even standards declined, faded.Asare had supporting sericulture of bytheearlydecades Unfortunately became wellestablishedas a strongtraditioninsericulture. Asare supported byseveralsericultureschools allaspectsofsericulturresearch on hiredaJ Government The RoyalThai by establishing in Thailand the Vmade Rama centuries. In1861King Photo 1:

Mural inThaiHouse

or silk production has been practi or silkproductionhasbeen ate use. In 1932, the Royal ate use.In1932,theRoyal a trialproductionfacility near anoccupationformany

apanese expert to promote education and topromoteeducationand expert apanese eeling factory but it was not successful notsuccessful butitwas eeling factory sheries, but again withlittlesuccess. e. The work ofthetrialstationwas e. Thework hnical knowledge and the good quality quality the good and hnical knowledge necessarytodeliverreliablequantities sult, both production levels and quality quality and sult, bothproductionlevels in theNortheastern which region, has sericulture farmers continued to continuedto sericulturefarmers first attempt atpromotingsericulture sult of these activities, sericulture sult oftheseactivities,sericulture the twentieth century,interestin ced in Thailand for several forseveral ced inThailand farming households. farminghouseholds. Thai Government tried to tried Thai Government

to the city ofBangkok. tothe

Basic Sub-sector Features 9

Shuttle on Handloom Shuttle

ly, but not exclusively, carry out d permanently settled in Thailand, d permanently in Thailand, settled oduction facilities using fly-shuttle oduction using fly-shuttle facilities share the work fairly equally when basis as the main source of income He identified imposed key designs, the 1950s and 1960s, a retired secret retired secret and 1960s, a the 1950s then weaveyarn their on traditional Photo 2: began marketing and exporttourist to the Thai silk th exotic white 200,000 village Thailand. They handlooms. Traditionally women predominant mainly rear native yellow yellow native mainly rear yarn bysilkworms, reel hand, and householdsin various produce silk of these villages are forms. Most in the Northeast of However, men and womensericulture. sericulture is practiced on a commercial for the household. At present about

As high-end silk exports grew, the As high-end grew, the silk exports Department of Agricultural breeding began a Extension program to reduce dependence on white silk. They imports of exotic succeeded in producinghybrid a silkworm by crossing the native yellow silkworm wi varieties from Japan. The resulting varieties from Japan. The yellow hybrids roughly doubled yarn yields per cocoon while at the theretaining knobbly same time texture for which Thai silk is known. Rapid changes began to occur duringRapid changes to occur began ha Thompson, who service agent named Jim began working with local silk producers. control and strict quality large-scale pr markets. He established and high-qualityhandlooms white warp yarn his looms. in setting numberSince then a of other private companies have committed promoting and themselves to developing Thailand’s silk industry, government and several departments, provide sericulture of support in the form farmers with technical training,improved and of mulberry varieties silkworms, and improved reeling as equipment such machines (NEED, 2006). 10 Basic Sub-sector Features • • • • • • For productimprovementtheMO ImprovingStrategy standard 2: • • • For localsilk production theMO yarnLocal silk Strategy 1: promotion whicharediscussedbelow. development, handcrafted Ther -2009. planfor2005 year strategy Coopera The MinistryofAgricultureand GovernmentPoliciesfortheSilk Sub-sector 2.2. Establish abasic standard system modelsfo Develop production whohave Strengthen farmergroups suiting local conditions. modern technologiesforThaisilk bydevelopi research work Conduct management. ofproductionbydeve Reduce cost silkworm andtransferringtec Increase productiveefficiencybyprov can bemet onimports. with lessdependence increaseofEncourage an production of protectthe Preserve and Thai silk limited alternativesforincomegeneration. whereNortheast thereisa strong tradit Promote sericultureasanoccupation

hnology to producer groups. producer hnology to AC will emphasize the following: AC will emphasize thefollowing: r niche market products. AC willemphasizethefollowing: of silk yarnsof silk silkproducts and for localThaisilkyarn. handcrafted sectorasanationalasset. product, reeling and weaving equipment equipment product, reelingandweaving special knowledgeforproduction. tives (MOAC) has formulated itsfive- hasformulated tives (MOAC) loping proper knowledge and good good and knowledge loping proper ion of sericulture and where there are ion of thereare sericulture andwhere ng high-yield (mulberry, silkworm), silkworm), (mulberry, ng high-yield e are fourstrategicissues e are for silk iding good varieties of mulberry, varieties ofmulberry, good iding silk yarn so that domestic demand silk yarnsothatdomesticdemand

for farmers, particularly in the for farmers,particularlyinthe

Basic Sub-sector Features 11

these markets. one will not help to improve Thai silk products to reinforce rks both inside the country as well rks both inside the country well as modern, flexiblewell as modern, design

quickly to changes quickly to changes in fashion and terms of products, patterns, and and patterns, terms of products, growth of this sub-sector and realize growth of this the sector the MOAC will emphasize the sector the MOAC will emphasize natural and environmentally friendly ems of each respective silk handcraft each ems of ilk products to to ilk products long term product all supply R&D for llective contribution of expertise and llective hen Thai silk handcrafted sector geographic characteristics, etc. sdom by establishing property rights in terms of propertyterms of rights establishing in sdom by handcraft sectors, in response to future market to future in response handcraft sectors, product development, the MOAC will prioritize the prioritize MOAC will development, the product sector, these strategies al sector,

neighboring countries.

sector supply chain. cluster netwo Collaborate silk and setup Promote Thai silk products as both Promote Thai silk products as logistic syst Improve the efficiency of Join road shows country as and exhibitions in the well as internationally to introduce and distribute unique Thai s Develop recognized brands for unique products. as regionally with consumers’ needs. Promote and wi protect local provincial and brands, licenses, consumer confidence. Improve production technologies as as short term as well Establish both Develop diversityproducts in of silk packaging. producers can respond methods, so of silk chain and marketing developments. • • • • • the silk sub-sector. However, the co the sub-sector. However, the silk will contribute to further financial support the actual potentials. Given the potential of the

Strategy 4: Strategy Promote and strengt To ensure the promotion and strength of

the following: • • • following: following: • silk diversity of To ensue Strategy 3: Strategy of Diversity development silk products 12 Basic Sub-sector Features to 22.94million EUR. of these silk exports, 813t from volumes decreased 2001, export The exportsofS Figure 1:Thailand’s Exports of 18.6 millionEUR(OAE, 2006). Vietnam,with Chinaand imported from tolimited industry due domestic supplies. silk importedraw on heavily Thailand relies garments andaccessories(24%)home pr consist ofintermediate T 70%). domestic market (approximately andfabrics). yarns Most of and man-made behindcotton earners(far fabricexportrevenue and ranks thirdamongyarn shareof 0.39% a providing In Thailand, silk generates total reve –Silk GeneralIssues 2.3 ilk andSilkproductsfromTha during thesesame years, the country’s textile export in 2006 (THTI, 2007). It(THTI, 2007). thecountry’stextileexportin2006 oducts: silkfabricsand ya Silk and Silkproducts nues ofapproximatel annual imports amounting to more than amountingtomorethan annual imports he rest goes to export marketsand he restgoestoexport ons to 698 tons in 2006., the value value ons to698tonsin2006.,the to meet demands fromthetextile tomeetdemands Mostofitsrawsilkhasto be Thailand’s silkisdestined forthe textiles (12%). (Customs, 2007). textiles (12%).(Customs, 2007). reduced from25.30million EUR iland fluctuate and compared to to iland fluctuateandcompared rns (64% of exports), rns (64%ofexports), y 22.94 million EUR, y 22.94millionEUR, (Source: OAE, 2007) (Source: OAE,2007) Basic Sub-sector Features 13

tual figures given een statistics from different een statistics climatic conditions. rs from relatively harsh climatic rs from relatively ithstanding these variations, the the these variations, ithstanding in Thailand as follows; in Thailand Photo 3: Delicate Patterns in Silk lt to evaluate the ac es in the North include horticultural on is a year-roundon is a main activity. The such as wood carving for handicrafts, which is considered the most reliable produced in Thailand is intended for rtheastern regionrtheastern Thailand has been of iland are in the (97.5%) Northeast (QSIS, lt in floods and droughts.floods lt in because of the favorable In addition, variations betw ports statistics of silk ports statistics of terized also by ternative economic production areas of silk yarn in Tha productionof silk yarn areas 2007). the No remarkable, as This is regarded as a disadvantagedarea under-and an with poor resources developed industrial The region sector. suffe Due to Thailand’s silk producti climate, conditions, which often resu conditions, which When comparing the Northeast to other regions in Thailand there is expand to opportunity less other regions duesericulture in these of environmental number to a al constraints and South, most of the In opportunities. because of the prevailing tropical climatic and environmental features, high rainfall and very high humidity adoption ofconditions restrict the sericulture, and therefore the potential for year-round sericulture is climatic the East, low. In the conditions are charac high humidity, howeverthere are more appropriate cultivation models such as horticultural crop production. developingthe In the West, industrial and convenient provide zones substantial employment opportunities for the surrounding rural areas, and the prospects for rural enterprise development such as attractive and notsericulture, is less significant. In the North, there are also more attractive income generating activitiesfor small farmers Other alternativ using forest products. production of vegetables, Considering of the silk that much it is difficu household and craft activities, production. over the silk sources are even more pronounced. Notw Sericulture, Queen Sirikit Institute of source of information, re 14 Basic Sub-sector Features according tofivekeydimensions.Fr Figure 2 (Source: QSIS, 2007) %) ofSilk Figure 2:Features(in Production AreasinThailand in2006 number of silk yarn holdings (98.1% number ofsilkyarnholdings ofcocoon holdings (83.4%), number T [Northeast shareinofthe overall concluded thatthefeatur (Source: QSIS, 2007) (Source: QSIS, 2007) Table 1:FeaturesofSilkProducti Total Other West North Northeast Area Production

compares each of the major of themajor compareseach

Area (ha) Planted Mulberry 24,882 20,752 1,130 2,457 543

Holdings Cocoon Number of es are mainly concentra es are 7,416 1,254 5,310 240 612

) and silk yarn production (97.5%)]. ) andsilkyarnproduction nAesi hiadi 06 on AreasinThailand2006 hailand market: Mulberry planted area plantedarea Mulberry hailand market:

om thetableand (71.6%), cocoonpr (ton) Production Cocoon silk production areas in Thailand silk production inThailand areas

2,746 1,535 112 402 697

Holdings Silk Yarn Number of ted in the Northeast. theNortheast. ted in 129,468 126,984 1,360 oduction (55.9%), (55.9%), oduction 139 985 figure itcan be

Yarn (ton) of Silk Production 1,108 1,080 19

5 4

Basic Sub-sector Features 15 shows the spatial shows Figure 3 Figure sericulture is relatively small. sericulture is relatively ployment in Thailand. The number of ed in 48 provinces country, across the inces producing silk yarn are Sisaket, s been considerably more pronounced households has declined dramatically entrated in a few provinces in the inentrated provinces a few was at around 200,000 in 2005, estimated Thailand. The map in Thailand. production. All 19 provinces in the Northeast produce the Northeast All 19 provinces production. in Figure 3: Silk Yarn Production in the Northeastern in 2005 Region Moreover, sericultural the number of over the past decline ha This decade. than the overall of decline agricultural em Thailand in the sericultural farmers down from over 300,000 in the early 1990s. distribution of silk yarn of distribution The number involved in of farm households

silk to some extent, but the main prov extent, but some silk to Even though production of silk is record sericultural farming sericultural is highly conc Northeastern of region Buriram and Mahasarakham. 16 Basic Sub-sector Features increases ordecreasesyearbyyear. hav and shares the productionvolumes from 410 decreased moderately 1,100 tons in to2001 1,150tons Hand reeled yarnvolume is ratherstabl in 2004.Machine reeled yarnvolume 23%)(DOAE,2005). reeled (about comprisesa (which reeled yarn; hand Thailand, therearetwomainproducti about1,480t (DOAE), Thailandproduces D method.Accordingtothe production (Source: DOAE, 2006) (Source: DOAE, Figure 4 Figure 4:Comparisonof Silk Yarn ProductionMethods,2001-2004 shows the production intonsfo shows theproduction

tons in 2001 to 330 tons in 2004. Overall, tons in 2004. to 330 tons in 2001 bout 77% of the market) and machine bout 77%ofthemarket)andmachine on methodsused to manufacture Silk e as itincreased only marginallyfrom epartment ofAgricu epartment e been quite stable with marginal stable with e beenquite r each year for each respective respective each r eachyearfor ons of silk yarn per year. In In peryear. ons ofsilkyarn ltural Extension ltural Extension

Basic Sub-sector Features 17

silk is made of silk is made of ve shell for their ve shell for their entrated in Asia, entrated in Asia, about 50 days. It silkworms feed on

Mulberry silk are derived from the worms, which initially were not ocessing, which makes it one of the which makes it one ocessing, threads they produce to make their to make threads they produce the basiscocoons formed of a very betweenprofitable trade East and Route*. Silk West along the Silk production is conc including South Southeast and Asia. This macro-region produces more global silk the of than 90% production. Chemically speaking, proteins secreted in a fluid state by aproteins secreted in a fluid state by silkworm. These selected food plants and spin protecti a cocoons as of cycle life next life cycle stage. The spans a silkworm starts with an egg stage about 10of starts with an days followed by a larval (silkworm) days to end stage of about 25 to 30 with a pupa stage of about 10 days. Man intervenesin this life cycle at the the pupa stage in order to obtain silk from the protective cocoon surrounding the pupa. s from the cocoons of silkworms and cocoons of silkworms and s from the eared for a very silkworms long time. e both user-friendly and healthy owing red food material the silkworms are . The non-Mulberryoften called , a around 4,000 years ago, the silk and fibres, is acclaimed as being the queen acclaimed as being fibres, is berry silks generally come in natural colours: types; the Mulberry and the non-Mulberry silks. This * The ancient trade route linking and the Roman Empire. * The China and the route linking ancient trade Silks fall into two main Silks fall into classification is based on the prefer classification is based on reared on. Almost all the varieties of silkworm domesticated “Wild Silks”, are derived“Wild Silks”, from silk These non-Mul domesticated. cream, beige, and brown gold. They ar to their porous texture and thermal properties. of textiles (World Bank, 2005).of textiles (World It come requires of handling and a great deal pr fibres also. Man has r most expensive They were first domesticated in Chin of all textile the most beautiful Silk - 2.4 Features of Silk of 2.4 Features Photo 4: Silk Fabric 18 Basic Sub-sector Features Figure 5:TheLifeCycle ofMulberrySilkworms ( Photo 5:Mulberry Silkmoth( Bombyx mori Bombyx mori ) ) Basic Sub-sector Features 19 and a t, which therefore pupa inside the cocoon st as white in colour as st as white in Philosamia cynthia, Philosamia ) & Cushions Cushions Silk Eri ) & and not uniform filaments. , rich in silk content. Also Tapioca silk content. , rich in lk content. An Eri silkworm spins an silkworm lk content. An Eri which can be reared on variety of be reared on variety can which are mainly differentiated to according inuous silk filamen inuous silk mixed with but the feel and cotton silkworm varieties reared present at varieties silkworm or leaves and when reared on these erge through the open-mouthwithout rms although the produced cocoons will n only be spun and not reeled. As an Eri type and contributes to as much as 95% much as as contributes to type and and all are reared on Mulberry leaves. All rious kinds have beenrious kinds have developed. e of this, Eri silk can be called a “peace” e of this, Eri or e is no need to kill the e is no need to kill the Philosamia ricini Philosamia produced annually under natural conditions. Also is a fine silk which is almo fine silk is a Philosamia ricini, Philosamia Bombyx mori Eri silkworms have two varieties. A wild variety, Eri Silks Eri Silks Non-Mulberry Silks Non-Mulberry hybrid Mulberry va silkworms of

can be industrially reeled. The varieties the number of generations variety, domesticated varieties produce cocoons with a cont a varieties produce with cocoons Mulberry silk is the most important the most Mulberrysilk is Mulberry Silk Mulberry of world’s silk production. All Mulberry silk production. of world’s belong to the species Cast food plants. Eri silkworms prefer leaves they cocoons will yield large size silkwo rear Eri leaves can be used to be somewhatin si and less rich smaller open-mouthed cocoon with discontinuous Because of this an Eri silk cocoon ca Because of this an Eri silk cocoon cocoon is open-mouthed ther can be allowed to em moth as the damaging the cocoon. Becaus Eri silk “vegetarian” silk. mulberrysilk. It has the look of wool silk. softness of Photo 6 & 7: Eri Silkmoth ( Silkmoth Photo 6 & 7: Eri 20 Basic Sub-sector Features by chemicals,butitisalsonota “ resistant andisneverbleachedordy a costlyfabric,Mugasilklookslike glossy finetexture,du silkworms produce yello astrong,golden mainly ontheleavesof The semi-domesticated va Muga Silks Muga silkwormpupaeare kill emerge as adult moth. emerge asadult that theTasarsilkworm Tasarsilkis Therefore not a“peace”or cocoons is basically donethesame wa mainlyontheleavesof also feeding mylitta, trees ( pernyi domesticated Thethre varieties. Tasar silkworms severalvariet have Tasar Silks Photo 8&9:TasarSilkmoth ( , a Chinese Tasar silkworm variety Tasarsilkwormvariety , aChinese Querus feedingmainlyonthe species)and rability and natural golden amber glow. Reputed to be amber glow.Reputedto golden rability andnatural pupae arekilled insidet Machilus bombycine riety ofMuga silkworm, A. yamamai A. ed inside their cocoons. Antheraea mylitta leaves oftrees of e domesticated e varietiesare; peace” or“vegetarian” ed. Itis naturally organicanduntouched spun gold.Mugasilkisnaturally stain- Oaktrees. Processing Tasar silkworm , a Japanese Tasar silkworm variety Tasarsilkwormvariety , aJapanese “vegetarian” silkas “vegetarian” ies: some wildandthreemain y asprocessing cocoons. Mulberry feeding mainly on the leaves of Oak ofOak leaves onthe feeding mainly w silk, which is renowned for its its for w silk,whichisrenowned and and ) &TasarSilkyarn heir cocoonsbeforethey Antheraea assama, Litsae polyantha. Terminalia silk because also it isnecessary species, Antheraea Antheraea Muga feeds feeds A. Basic Sub-sector Features 21 e that holds the its characteristic ering with the structure very fine, the filaments the very fine, ) & Muga Silkyarn ) & Muga Silkyarn silk yarn is woven into fabrics. with hot hot dry air.or wet steam through the silk makes it feel cool through the silk makes it layers to give silk to gathering. Consequentially, the ven from the silk of domesticated ven fromdomesticated the silk of re difficult to dye than the silk from the silk from dye than re difficult to has been torn into many pieces with for storage. Before reeling, stored in the wild have usually already been re far more than synthetic fibres. In lled as one continuous filament. This lled as one continuous filament. her to get raw silk yarn. After twisting, beautiful to touch - "Nature’s second second beautiful to touch - "Nature’s ed and sorted they are stifled with the Aside from differences in colours and in colours and differences Aside from e the gummy substanc oons before adult moths emerge, thus coon is immerged in hot water to loosen domesticated Non-Mulberry silkworms domesticated this damage, pupae of domesticated tion against the cold and in summer the one major aspect from the domesticated major aspect from the one Antheraea assama . The protein in silk is very close in makeup protein in silk is very close . The heir cocoons without interf fibres, which are triangularlike and so reflect light yer first. As one filament is As one yer first.

gives a summary of the properties of silk fabrics. gives a summary of the properties of silk Table 2 After Mulberry silk cocoons are gather After Mulberry silk pupae inside t the aim to kill of the cocoons. This stifling can be doneof the cocoons. This stifling can are dried the cocoons After stifling, cocoons are boiled in water to dissolv against the skin. pearly sheen and sensuous feel so why it feels to human skin, which is skin". It absorbs and transpires moistu protec thermal winter, silk provides transpiration and evaporation of moisture of five to eight cocoons are reeled toget of five to eight cocoons are de-gumming and eventually dyeing, this raw made up of protein is Silk prisms. These protein fibres are spun in filament in place. During reeling a co the filament in the outer la silkworms. Wild silks also tend to be mo to be silks also tend Wild silkworms. silkworms. domesticated Apart from the different varieties of Apart from the different there are also some varieties. in all differ silks textures, these wild are gathered varieties: the cocoons that damaged by the emerging moth prior made up the cocoon that single filament much shorter lengths. To avoid killed inside their coc silkworms are allowing the whole cocoon to be unrave allows a much stronger cloth to be wo Photo 10 & 11: Muga Silkmoth ( Photo 10 & 11: Muga 22 Basic Sub-sector Features Weight Strength reduction Size Resilience resistance Mildew/mould Lustre Insulation Electrical resistance Flame Elasticity Dyability Durability Draping Absorbency resistance Abrasion Warmth Table 2:PropertiesofSilkFabric Property

stretched afterbeing original shape an Ability toresume coating formedbyfungi. whiteMould isa orgrayish surface. The lightreflectedfromthe electricity Does notconduct removed. extinguishing once flame is flame andisself- Burns slowly inanopen without breaking stretch overitslength fabricto The abilityofthe dyes colouration by The fibres’receptivityto and decay wear withstand Ability to delicately Ability tohang the air. from dry fibrewill absorb The amountofmoisturea everyday use. the rubbinginherentin withstand to Ability offabric Silk feels warm ontheskin. warm Silk feels natural fibers. lightest ofthe Silk isone stress Ability toresist a smallsize orfoldinto Ability tobundle

Definition

Used forsuturematerial strong. Seemingly delicatebutvery materials More appealingtotheeyethanother wrinkle resistance water Comfort, warmth, repellence, tosplitting Durability, resistance Used to line snow jackets Used tolinesnow kimono) andjockeyridingjackets. (saree, Preferred fordressesinAsia Tougher thancottonorfinewools. Strong, but slightly weaker when wet. the war. during maps werehiddeninclothing Silk smallspace. Can carryina shape retention. good Tends tohangoutandhave periods. forlong left indampconditions rots thatattackotherfibres,unless and mildew, moulds Resistance to lustrous. fibre makessilkvery Prism-shaped wires electric Used toinsulate and upholstery Excellent forwall fabric coverings silk stockings. anyshape.Usedfor mould itselfover upto20percentand Able tostretch better thananyotherfabric to andholdcolour Able toattach

Benefits &Use

Basic Sub-sector Features 23 . e. One silkworm e. One silkworm these cocoons is these cocoons poly-bivoltine hybrids, 00-800 meters, which are 100% mulberry silk. Three Three silk. mulberry 100%

e for factory reeling. Bivoltine e for

al impact of silk processing is silk al impact of in themselves. Native silkworms in themselves. Native silkworms liage for 100 silkworms. Silk is 100 silkworms. liage for w cocoons of intermediate size that w cocoons of intermediate a filament length ranging from 600 an also be reeled in factories. Thai reeled an also be ilament length of ilament length farmers have traditionally produced, farmers have om foreign bivoltine parents. They fabric to make one scarf. One mature one scarf. make fabric to are used in the Thai silk sub-sector; the are used in eption of some of the newer breeds. eption native polyvoltine (Poly) and foreign labour intensiv and land ng process of producing Silk Fabrics ng process of producing Silk Fabrics lberry silkworms are summarized below lberry silkworms are summarized takes approximately 650 and cocoons takes 100 when compared to cotton or wool. when compared an only be reeled by hand. generations in a year). The main technical a year). generations in le generations in a year), le generations in on in Thailand is almost ilament length of about 6 Figure 6: Yields in the transformi mainly reeled by hand reeled by machine. but which can be (bivoltine, whiteForeign hybrids cocoon) Foreign hybrid varieties are bred fr produce large cocoons, which are suitabl are usually white, with exc cocoons Bivoltine varieties produce cocoons with to 1500 meters, which are reeled mainly by machine. Polyvoltine silkworms are varieties that Polyvoltine silkworms are varieties mainta based on egg stocks that they Native varieties (polyvoltine, yellow cocoon) Native varieties (polyvoltine, produce yellow cocoons. The f small, and bivoltine (producing 2 characteristics of the 3 types of Mu Thai hybrid varieties are from bred produce yello bivoltine (Bi) parents. They Mulberry very is both silk production producesIt very usable silk. little labour hours sufficient silk to produce enough fo tree will produce mulberry about 250-300 which c meters, yellow cocoon) (poly-bivoltine, Thai hybrids are usually reeled by the farmers but c other breedingcan also refer to variationshybridsx Bi, but are mostly Poly x Poly or (Poly x Bi) x Bi). Poly-bivoltine(Poly x Poly,Bi Bi x Bi, varieties produce cocoons with a f environmentally friendly. The environment relatively minor in its initial stages major varieties of mulberry silkworm of mulberry varieties major polyvoltine (producing multip Currently the silk producti the Currently 24 Basic Sub-sector Features used crosswiseintheweavingprocess. yarn needstobeofuniform lyinglengthw theyarn represents yarn be distinguis typesofyarncan major according Silk yarncanbecategorized 2. Second grade silk yarn (“Mai Loei”) silkyarn(“MaiLoei”) Secondgrade 2. Firstgradesilkyarn(loc 1. as follows: de ofAgriculture(2004) The Department 3. Third grade silkyarn(“MaiLeub”)is Thirdgrade 3. yarn because ofitsfineandyarn because smoothtexture. ashavi yarn, recognized floss andthefilamentofouterla the from reeling filament from the be usedforweftonly. resulting silkyarnisnot as finefi the filament and from theouterlayer which reeling process, combines, afte second grade silkyarn, thissilk second grade resulting silkyarnis coarser than the filament of the outer Photo 12:SilkYarns ally known as “MaiNoi”)is knownas ally ng thebestqualityanditis thicknesswithsome flex layer ofacocoonafterall thefloss is taken. The yarn canalsobeusedfor weftonly. hed; warp yarn and weft yarn. Warp weftyarn.Warp yarnand hed; warp inner of layer a cocoonafterallthe ise in a weaving loom. This type of Thistypeof loom. ise inaweaving rst gradesilk yarn. Thissilkyarncan to its weaving use. For weaving two two to itsweavinguse.For fines Thai silk yarn into three grades fines Thaisilkyarnintothreegrades second grade silkyarn. Similar tosecond grade yer have been removed. Itisafine removed. been yer have of the inner layer of acocoon.The of theinnerlayer the silkyarnresultingfrom reeling r removing the floss, the filament the floss,thefilament r removing is the silk yarn resulting froma is the silk yarnresulting

ibility. Weftistheyarn thesilkyarnresulting usuallyusedaswarp

Basic Sub-sector Features 25 plant with, in Thailand, in plant with, ng, a silkworm gains in Photo 13: Feeding Silkworms pruning with the next pickings at 7 pruning with the next pickings at ing leaves can beeither with or tions and can grow in poor soils, in can grow in tions and silkworms or livestock, it produces a time it eats some 22g of leaves andtime it eats some 22g basketry and its fruits are edible andbasketry and its fruits lly done byhand-picking leaves or around theworld. The to plant is able than 50 countries, mainly in temperate, mainly in than 50 countries, berry is a multiple purpose tree. Apart of nitrogenous material into silk. tools or machines. In Thailand, the leaf to the time it stops feedi ) is a deciduous perennial deciduous ) is a techniques ensures in the quality of the the in the quality of can be growna tall as habitat, yield and nutrient habitat, yield and Moraceae morusMoraceae without the leaf stalk (or petiole). Mul from its leaves being a good fodder for can be used in fine wood, its branches can be used to make wine. Harvesting Mulberry leaves usua is chopping branches using hand picking starts about 10 weeks after bottom to 8 week intervals, achieving 6 to a year.in 7 harvests The tree is then prunedto near ground level again. Pick

Mulberry cultivation is indispensable to Mulberry silkworm rearing. are Mulberry trees cultivated to provide leaves, which are fed to rearing rooms. special From the silkworms in the day a silkworm hatches high yield and good quality mulberry leaves. There are species and 100at least 24 varieties that vary in 20 varietiescontent; but less than are commercially significant globally. Mulberry Mulberry Mulberry ( of 5-10 a life cycle years depending on how well the tree is cared for. cultivated in more Mulberry is globally climates as tropical subtropical as well condi soil and climatic adapt to varying high as arid regions, as from sea level to 4,000 metres above sea level. Depending on tree the cultivation, the The plant ortree, middling tree a bush. provides all needed nutrients for a silkworm. mulberry leavesthe The quality of fed to silkworms is reflected to produced silk; so it is vitally important produce good quality leaves. The quality of result of prudentthe leaves is a direct agronomicin the management aspects agronomic cultivation of mulberry. A complete package of variety selection, planting management, water techniques, nutrient application, pest and disease control measures, and harvesting weight about 10,000 times. During this converts more than 70% of its intake 26 Basic Sub-sector Features growth and utilisation ofpowerloom growth and accounting formorethan90%ofthe pace. sector dominatesthe loom The power Figure 7:Thailand’s Exports ofHome Textiles 2007). 2007). a0.31%shareinthe thus providing million, contributing 3.6%toThailand’s EUR220.6 of earnings approximately generatetotalexport Home textiles rateinThailand’s employment sub-sector,it a labourintensive increas 6.8% oftotal exportearnings, forabout Textilesaccountedin2006 oftotalexportearnings. about 77.8% themanuf Social DevelopmentBoard, earnings.Acco Thailand’s exportrevenue sectorhashistorically The textile –HomeTextiles GeneralIssues 2.5

manufacturing sector (NESDB,2007). also helped in generating ahigh ingenerating also helped made a significant contribution to significantcontributionto a made country’s manufacturing exports(DEP, manufacturing country’s ing by 10.7% from2003to2006.Being ing by10.7% s hasreplacedhandl acturing sectoraccountedin2006for total fabricproduction.Themassive total textile export earnings in2006 total textile exportearnings production offabric production rding to the NationalEconomicand (Source: DEP, 2007) (Source: DEP,2007) ooms atarapid in the country, inthecountry, Basic Sub-sector Features 27 an be basically home textile producing, es). The entire silk sub-sectores). The entire the Northeast c is sub-sector is silk. It is estimated silk. is is sub-sector weave high value-added luxury silk de, including a considerable number high value-added luxury silk fabrics eaching and dyeing specialists, input ns, who and those weave low value- ll handloom fabrics and have their niche

power looms can compete. ists of approximately 300, Photo 14: Handloom Weaving categorized into two groups;categorized into those who fabrics with unique traditional desig added standardized silk fabrics. The account roughly for a quarter of a markets where neither mills nor Product-wise, the handloomProduct-wise, the weaversin

Northeastern are made home textiles mainly from woven local handloom major raw materialfabrics. The in used th employs about 100,000 people region wi (rearers,of support people bl reelers, etc.). suppliers, weavers that the sub-sector cons that the sub-sector SMEs (groups, cooperativ companies and 28 Basic Sub-sector Features technical performance. lifecycles,expectationsr of product The and hometextiles). markets for these textiles), andthosewhich serveasen as asemi-fin by industry final usage materialforfurtherproce used asraw canbecategorizedaccord Textile products Home Textiles Featuresof 2.6 fragmented group ofestab group fragmented The hometextilesectorintheNortheas carried out. Oft company. inone fabrics happen process wherealltheprocessesfrom ya Few companiesinThailandhavea finished home textile products. finished hometextileproducts. encompasses, initsbroadest sense, The hometextileschainisthus yarn, makefabricandfinishthese ma Textile textile products. establishment (cocoon,related products yarn,fabr * Formal Clothing Photo 15:ShuttlesforSilkWeaving

lishments that produce lishments thatproduce long and complex whilst the long andcomplex sector egarding chemical product safety and safetyand product chemical egarding ished or pre-product or (e.g.technical or pre-product ished or ics) for furtherprocessingintohome fully integrated end-to-end production production end-to-end fully integrated ssing (e.g. yarn and fabrics), those for those for fabrics), ssing (e.g.yarnand en only a single processing stepis asingleprocessing en only d product to the consumers (apparel* d productto the consumers(apparel* s transform cocoons into yarn, dye dye yarn, s transformcocoonsinto terials at stages. production various the production of yarn, fabrics and the productionofyarn, fabrics and rn production to top-finishing of dyed totop-finishingofdyed rn production t is comprised ofadispersedand products differin products terms ofduration ing totheiruse;

and/or process textile and/or process those, whichare, Basic Sub-sector Features 29 important and widely important tivity in the rural economy of in tivity by local artisans, whose expertise rized by natural fibres, traditional fibres, traditional rized by natural their diverse cultural backgrounds their diverse a different appeal from a different appeal industrially en of finished home accessories. The en of finished home accessories. The have a rich heritage have a skills. of craft Thailand has a variety of traditional traditional Thailand hasvariety of a people living As part in the countryside. of Thai home textiles is handloom d products, produced handloomby be of the most one

down from one generation to the next, creating y and product authenticity. y and product authenticity. Photo 16: Woman Weaving Silk Northeastern Thailand. One source sometimes ev production of fabrics and production is labour-intensive and is done Handloom weaving important ac is an

and skills have been handed and skills have a distinctive local identit

and varieties of natural resources, consideredtherefore to is Handicraft adopted most occupations of off-farm cultural heritage, Northeastern of its and patterns)fabrics (textures an weaving. Handloomtextiles are characte skills and eco-friendliness giving products woven items. The people of Northeastern Thailand, of Northeastern The people with 30 Basic Sub-sector Features Photo 17,18 &19:Silk Thai Home Textiles techniques anddesign levelofinterestinseeing modern haveahigh andlearning training and Producers inthe . Parttimeproducerswhoprod 2. whoearn Professionalproducers 1. fall Home textileproducers many cases, allowing them considerabl many cases,allowingthem therebyc work fromtheirownhome, well asimportantsocialandcultural impactas hasanimportanteconomic areas sector forthe inremote people is asourceincomefort of additional Producers inthe occupation (farming,cattl second group first group improvements. basically into two groups; basically intotwogroups; are open tonewdevel areopen e-breeding, housekeeping). housekeeping). e-breeding, are mainly women. Home textile production Hometextileproduction are mainly women. uce handmade items alongside another itemsalongsideanother uce handmade hem. Securing jobs in the home textile hem. Securingjobsinthehometextile ontrolling their time and output and,in timeandoutput ontrolling their their livingfromproductsales, their significance. Amajority ofproducers e input into on-going familylife. e inputintoon-going

opments, education and opments, educationand Basic Sub-sector Features 31 The The

consisting of the of consisting products that are rtain types feature as most units are small small most units are as

to play. In many ways, it is to pay relatively high prices for to pay relatively prices for high s and innovation in products are s and innovation s (mainly curtains, bedspreads,s (mainly In each stage of the production engages in the self-exploitation of engages in the self-exploitation of r skill thus being able to shift from thus being r skill ends of the market (e.g. silk and he sector and made it possible to he sector and made to it possible om a niche market om a niche e independent weavers, organized nown for specific to dynamic market situations. situations. to dynamic market ources that tie individuals to a given individualstie ources that to low end (e.g. chemical fibre). In low end (e.g. chemical fibre). In essing, weaving or finishing – every th in terms of products as well as e Northeastern home textiles sector rket but in foreign marketsrket but in foreign as well. p and prowess home of Northeastern eir products came from and under whatcame from and eir products porters do not have any to find means market segments. Ce market segments. esses, products and geographical shifts. products esses, e the various inputs into the Thai home

abour inputs from family members. Being inputs abour he most popular material overall. products were produced. sector is quite versatile quite is sector

home-based makes it decentralized. home-based makes it decentralized. it is pre-loom proc process, whether role member of the householdclear has a level. labour in order at a subsistence to remain one production another. base to householdagricultural thatsimilar to an Making changes in production processe fairly easily achieved. Unlike land res thei place, weavers are limited only by weavers in co-operativesweaversgroups working and or informal under master weavers. uniquedesign in and style. There ar production methods. The region k is more predominantly in the mid to high- cotton) others feature more in the Northeastern Thailand, silk is t At this moment, it is difficult to trac textile chain. Most producers and ex silk yarn) for th out where inputs (e.g. conditions ecological or social

Basic materials vary in the different 3. It is largely home-based, with l 2. There is a great flexibility in proc 1. It is quite diversified in nature, bo 1.

In summary, basic characteristics of th of basic characteristics In summary, are as follows: carve a niche, not only in the Thai ma carve a niche, not upper middle are class. Customers willing hand-wovencraftsmanshi The items. strengthenedtextiles has the image of t Demand forDemand Northeastern home textile serviettes and pillowcases) now comes fr and pillowcases) serviettes and have the flexibility to respond quickly to respond and have the flexibility Northeastern home textiles 32 Market Analysis Figure 8: Global Production of Raw Figure 8:GlobalProduction ofRaw Silk intons percentage of their of percentage tops the list(90%).India andViet respectively(FAOSTAT,2007 and Thailand in 2004,followed by world production biggestraw theworld’s China isbyfar WorldProduction &Trade 3.1 MarketAnalysis 3. World production ofrawsilkstood World production 2007). unit priceof raw silkisroughly twent suggest.Silkisaprem volume would of trading value silk andproducts mere 2.5%, and silkaccountsforati cotton accountsfor40% of theworldfi Silk representsa tinypercentageoft global production ofraw silk global production to1995,whenproduc increase relative overall production. overall from 1995to2004is shown in at 135thousandtons he global textile fiber market. Globally, he globaltextile fiber market.Globally, y times that of rawcotton (FAOSTAT, ny 0.2% (WTO, 2006). Yet, the actual ny 0.2%(WTO,2006).Yet,theactual ium pricedagricultural commodity;the nam currentlyexportonly asmall silk producer, with a 70% shareofthe silk producer,witha70% ber consumption,woolaccounts for a India, Vietnam, Turkmenistan, Brazil tion stoodat tons.The113 thousand is much moresignificantthanthis ). In terms of exports, Chinaalso ofexports, ). Interms (Source: FAOSTAT, 2007) 2007) FAOSTAT, (Source: Figure 8 in 2004, a20% . Market Analysis 33 (Source FAOSTAT, 2007)

World Raw Imports Silk World Raw Exports Silk Figure 9: World Raw in 2004 Silk Production Figure 9: World Figure 10: World Raw Silk Imports and Exports in 2005 in million EUR million Silk Imports and Exports in 2005 in World RawFigure 10: (Source FAOSTAT, 2007) 34 Market Analysis world home textilesmarketasawhole. world home onlygiveanindicati The trendstherefore trendsbecauseoftheway trade overall tradetrendsfromthe products and/orhandcraft handloom separate out grow atanaverage 10years over thelast 2010. Annualdemandsfo 25 billionin increasefromabout is projectedto According to TFIA,theva a survey by 70%of together standforabout the world’stotal hometextiles imports. increases in theUSmarket of5% accountingformore US andEUtogether home textiles sector can bevaluedat estimatesforall Current types ofhome from other manufactured items. from othermanufactured items. system. Thissystemdoes notreco with t statistics, which arealigned orcustomsandexport sector statistics revenue foremploymentand occurs informally andthefactthat se complicated by thefact that alargepa sources ofbaseline dataacross the va hom fortheNortheastern There are, declining over recent years duetoits recentyears declining over only exports silk sub-sector, Thailand due tolimited domestic supplies. Compared silk onimportedraw to meet dependent oft Thailand,beingone world imports). andisrankedseventhinterm production Thailand isthesixthlargestrawsilk (9%)respectively. (14%) andKorea silkim raw accounting for32%ofworld for theirtextileindustries(FAO,2007) –India, Four majortextileproducers activities are in place(NEED,2006). Commission,butatpresen the European In thelate1980s,somesilkpromotionac effect natural fibrecanhaveamajor fibresand of thepublic toward natural affected byfactorssuch as fashion topr verysensitive which arenot because silkproductstendto c difficult It appearstopredictglobal share the characteristic share rd handcrafted/handloom items separately items separately rd handcrafted/handloom ice changes. In the long run, demand is demandis ice changes.Inthelongrun, EUR 18 billion in 2005 to more than EUR more thanEUR EUR 18billionin2005to trends, promotion, and changing attitudes trends, promotion,andchangingattitudes

he Harmonised Standards (HS) coding (HS)coding Standards he Harmonised and attitudes on demand and the EU market of 9 to 10%, they and theEUmarketof 9 to10%,they Italy, Japan and Korea importrawsilk Italy,JapanandKorea high alackoflustre. priceand e textiles sector, only a few published few published e textilessector,onlya producer with about 1% of the world oftheworld about1% with producer lue oftheglobal tradeinhometextiles approximately 95billionEURwith the approximately he world’s leading textile producers, is producers, he world’sleadingtextile r home textiles havebeenincreasing r hometextiles rt of Northeastern home textiles home trade rt ofNortheastern textile products. Promotionofsilkand textile products. textiles suggest thatthe world’s global a small quantity of raw silk, whichis ofraw a smallquantity ports, followed by Italy (22%), Japan ports, followed(22%), Japan Italy by the demands fromthetextileindustry the demands onsumption trends of silk.Thisisonsumption trendsof on of the overall dynamics within on ofthe dynamics the overall ctor isnot intoofficial disaggregated lue chain.Acquiri tivities in Europe were conducted by tivities inconductedby were Europe in which the trade data is captured. iscaptured. in whichthetradedata of rawsilkimports(about3% the than 60 billion EUR. With projected billion EUR. than 60 t, virtuallynoglobalsilkpromotion . India isthelargestimporter, . India th rate of6%.Itis th rate not possibleto to other global players in the raw intheraw tootherglobalplayers s of luxury products, s ofluxuryproducts, ng data is further ng dataisfurther of consumers. Market Analysis 35 e in times of growth in income

tivities. (CBI, 2006) There is a tivities. . EU countries can, according to a . EU countries can, according to depend on several factors like size size depend on several factors like in 2005 whereas in the same period d and furnishing textiles vary strongly household and furnishing textiles and household textiles and and furnishing of Household & Furnishing Textiles developments in value of imports during like health, housing/energy, transport/ : but decrease in periods when growth in income but decrease (Source: CBI, 2006) is low or negative. is low or negative. Figure 11 Figure 11: Developments in Imports 2003-2005 in EU Countries, between EU countries. These differences countries. These between EU of production and structure of domestic the possibilities and volume of re-exports Survey, be classified, by CBI Market 2003-2005 as shown in Developments in the import of househol Developments in the

the expenditure grew in sectors and leisure/educationcommunication ac tendency that household expenditures increas and household consumption, and household consumption expendituresConsumer the EU for household in furnishing and textiles decreased from to 0.46% 0.52% in 2001 3.2 Demand & EU Market 36 Market Analysis Figure 12:ImportVolume &Value of SelectedProductTypes (Source: CBI, 2006) (Source: CBI,2006) other furnishing textilesproducts. other furnishing to given emphasis shouldbe countries) felldramatically by62%.(CBI,2006). importsfromc whereas countries rose imports fromdeveloping from ashareof50%in of 2001toshare In termsof suppliers, theroleof stabledem and prices andthehigher hadstablethese products pricesin fetched higherpricesthan bedspreads A priceanalysisrevealsthattablelinen EU by developing countries EU bydevelopingcountries and fu Product type’spositioninhousehold ountries outsidetheEU in 2005isillustrated produce and export t andexport produce developing countries increased strongly, countries developing the period 2001-2005. Both premium Bothpremium the period2001-2005. and bath/kitchen linen. Consequently, andbath/kitchenlinen. Consequently, , curtains and other furnishing textiles , curtainsandotherfurnishing ands ofthese produc by 20% and intra-EU trade by 24%, intra-EU tradeby24%, by20%and 58%in 2005.Atthe same timethe rnishing textiles rnishing supplied tothe Figure 12 able linen,curtainsand (excluding developing developing (excluding ts suggest that :

Market Analysis 37 iles Suppliers to the EU in 2005, iles Suppliers to the EU in 2005, adesh, Egypt, Tunisia, Brazil, and Brazil, adesh, Egypt, Tunisia, now increasing fiercely as many similar products and shipping these in similar products and shipping these in upplier from developing countries, with ue from developing countries to the EU (Source: CBI, 2006) (Source: CBI, 2006) suppliers are or less supplying more large volumes.the biggest s China is a 27.6% share of the total import val 17.2 and Pakistan are next biggest with 25.9, India and market. Turkey, 15.5% respectively, followed by Bangl Indonesia with much smaller shares. (CBI, 2006). The competition in the EU market is Figure 14: Leading Household & Furnishing Textiles Suppliers from Suppliers Textiles Household & Furnishing Leading Figure 14: EUR of value in million Developing Countries in 2005, share in % share in % million EUR of value in share in % Figure 13: Household & Furnishing Text Furnishing Figure 13: Household & 38 Market Analysis 15-20% segment low price Low orvery 40% Share 45- Market Segment Price middle Low to 25% Share 20- Market Segment high Price Middle to 20% Share 15- Market Segment Price middle Upper 5-10% Share Market Segment Luxury High Price Table 3:FeaturesofEUretailmarketsegments best potential opportunities. best potentialopportunities. variations, whichThaiproducers/expo price.In than betw quality andbranding market (whichisamuch smaller but mo items.Ont individual mark-ups on discount retailersmaketheir profitfrom provide their products at theirproducts c provide In thehighlycompetitiveretailmarket,

goods brand name assortment, classical following or trend Good quality, design broad ragein collections, fashionable materials, quality goods, high Brand name image effect goods with brand name (designer-) material quality luxury high Exclusive products inexpensive offers, special sales/ quality, Basic/low fashionable designs, of colorsand limited range Basic quality, Criteria Product

onsistently lower cost.Many stores department order interior stores, mail- Department shops, Independent stores Department direct stores, manufacturer’s shops, shops, shopin Independent companies mail order stores, special department departments in stores, special stores, designer Exclusive retail Store Choices streetmarkets hypermarkets, super- and discounters, Variety stores, retailers stores, value stores, variety department Interior he other side the very high end of the of the end high very he othersidethe selling large volumes rather than high ratherthanhigh sellinglargevolumes rters willneedtoexplorefindthe

een thesetwoextremesisa rangeof re lucrative)ismoreconcerned about EU retailers push their suppliersto EU retailerspushtheir Joop! Armani, Georgio Farhi, Nicole Karen, Donna Names Brand No brands Hema Spencer, Marks & Ikea, labels like Price Habitat Irisette, Cinderella Freyte Vossen, Van Dijck, Bassetti, Zucchi,

artworks exclusive designs and special season, every changes colors, Fashionable Criteria Fashion requirement fashion special without products Standard designs number of limited per season, variations with less collections Standard designs common colors, fashionable season each colors and Standard segment luxury colors than with fewer designs but exclusive available, Many colors of the large “value” or or ofthelarge“value” (Source: CBI, 2006) CBI,2006) (Source:

important Price less Criteria Price decisive price is (low) prices, Special important Price observed must be threshold Price brands consumer and collections fashionable of pricefor Acceptance

Market Analysis 39

EU market by IBEF the EU harmonized the share of the handloomthe the share of ts. It is impossible to draw up a to draw up is impossible It ts. ocery stores, small textile articles textile articles ocery stores, small ly with types of products as well as ly with types of products as well as er woven products under the same il selling price. This margin figure is This il selling price. of sales, though this can be as low of sales, though nation,importers employ different the limitations of furnishing textiles imported into EU infurnishing textiles imported into EU order to verifying the current market order to verifying the current market e products different margins require into handloom and power loom textile in economic conditions. A typical conditions. A in economic estimated volume of handloom home of handloom estimated volume The analysis of the and every product/market combination. thousand tonsapproximately valued at Selected goods are retailedSelected goods are even prices up to with based on the findings that on the based

(Source: IBEF, 2007) Figure 15: Value share of Home Textiles imports to the EU in 2005 imports to the Value share of Home Textiles Figure 15: have a gross margin of 20-30% of the reta of 20-30% of the have a gross margin highly attractive compared with typical profit margins on food and other grocery items. find in Reliable statistics are difficult to products. to situation of handloom Due code which put both hand woven and pow It is generally more attractive exporter for an to operate in the medium and Margins varyhigh market segments. great than low-risk, high-volumethan low-risk, standard produc for each of actual margins schedule Even withincombi same type of the due to variationsdifferent margins, paid to commission rate an agent is 10% higher for exclusive deals. business and much as 8% for volume The averagewith retail channels. textilesgoods by 80 to retailer marks up 110% of the buying price. 140% higher the buying prices. In gr than category, categorizing these products if not impossible. products is difficult, High-risk, low-volume, service-intensiv low-volume, High-risk, revealed that for the year 2005, the EU is 108 textile imported into the EUR 982 million. This is and of the total household products out year 2005 was approximately 16%. 40 Market Analysis natural materials, such as natural dyes. suchnatural materials, asnaturaldyes. time, toconsumerswhova they appeal simple designs,whichcomplement abst productso the EU.Theseauthentic Thaitextile intraditional incorporated style forthe home, whichisnowpopula fitwellinto rusticappearance, handmade, textiles,which home homes. Handmade items,which one-of-a-kind c appreciate home textiles sector. Accordingtoreta is ethnic, handcraftedproducts Demand for pure choice. to ontheneed r decreasingly dependent strongest stimulusfor new purchas become avitallyimportantcharacteristic interior servesasameans toexpr to theirhomeinteriors.Justlikeother wholesalers and retailers. andretailers. wholesalers hometextiles.Thereare handloom home textiles form apart. Neither sell bothhometextilesand homedecora anyshopsellingjusthandloomhome hardly home text handloom for The EUmarket quality materials.Value for moneyis conscious is consumer who has increasedinrecentyears,butan products more expensive quality and forhigher looking The trendtowards especially in the fashion style. Household andfurnishingtextiles tobeseen theEUwants consumer in Elements of fashion are:colour,design, and attitude to life willbeemphasisedby segments consumer demandshavebecome criterion formost consumers. and designsegments(higherpr looking for fashionable trends as wellasgood looking trendsas for fashionable ess personality.Pe s and handicrafts alsohaveamarketins andhandicrafts fashionitems such asclothing, ahome even moreimportanttrendistheprice- ften display geometric patterns and patternsand ften displaygeometric ilers in consumers the EU,European an personalizethedecorationoftheir r in Europe. Ethnic designs which are Ethnicdesignswhichare r inEurope. have adominantmarket share in lue traditional cultures,ethniclue traditional artand exclusivity and life ract and modern decors.Atthesame ract andmodern as an individual with his/her ownlife with his/her as anindividual es. Thehometextiles sector is have also an individualising function, have alsoanindividualising still themostim ofnewofferings,asthis willbethe tions in general, of which handloom tions in ofwhichhandloom general, combine quality construction witha combine qualityconstruction theambiencethat eplace, being farmorefocusedon iles isquitefragmented.There themore modest,back-to-basics thousands of small importers, thousands ofsmallimporters, particularly strong in the growing in thegrowing particularlystrong more specific. Character, ideas more specific.Character,ideas textiles, but many outletsthat ice ranges). Inice ranges). these rsonalisation should portant purchasing style. The present style. Thepresent consumers give consumers Market Analysis 41 t of its action on public ic, hygienic, bacteria-preventing materials also rate as importantmaterials also rate factors when purchasing home textile products, as are care wash-ability. instructions and Consumers are becoming more to green conscious with respect and non-toxic activities, environmentally friendly with an goods consumer increasing knowledgeof the and care materials, environmental impact and social requirements.natural Silk's hypoallergenic qualities have be increasingly come to modernappreciated across the bedding is a greatworld. Silk all allergy sufferers, blessing to asthma, who may be prone to blocked sinuses, or other hay fever like symptoms. Many people are allergic to dust, or house mites, and, unlike many bedding materials (particularly down, feathers and wool), Silk these will not accommodate mites. According to latest information, the EU is very cautious in formulating regulations to restrict the use of AZO dyes. The EC textiles that may come into close he group of products with potential he group of products egarding products to be a sensible sensible egarding be a to products cludes clothes, footwear, handbags, ng a home textile product to be a mere a mere be product to textile ng a home r health. Producers who can provide high- r inue to play a large roleinue to play of home in the choice AZO dyes in 1994 as par AZO dyes

textile products. of Instead consideri are now good, EU buyers consumer r investment for maintenance of thei quality information every typefor and products of buyer have goodsales products. Hypoallergenpotential for their Health considerations cont Health considerations first restricted the use of health, and to cancer. AZO dyed combat contact with the body will be banned. T dangers in for skin/AZO dye contact bedding, etc. Photo 20: Silk Dyeing 42 Market Analysis Thailand in 2006 invaluemillion EUR Product Type’s SharesofHome TextilesExportsfrom Figure 16: low prices. arecommodityproductssubject exports to lowercostsuppliesfromChina,India, si competitiveness aregraduallyeroding infact,is production, st textile sectorasoneofthefivepriority Although policy makers highlighted the im makershighlightedthe Although policy oftextthe leadingexporters Furthermore, T and reelingindustries. well asbackwardlinkages to relatedi Domestically, itsimportancetothe in termsof itsvalueadded,empl The textileindustryhasforalongtime ThailandExport’s Market 3.3 Australia, the UAEandChina. The mainexportmarkets for Thaihom s themajority (10%) holding (31%,bat linen andbed bedspreads In 2006,there hometextile were 4 agnating high atrelatively ile productsintheworld. hare of the export market. hare oftheexport h and kitchen linen (23%) and blankets andblankets andkitchenlinen(23%) h economy comes both from forward as economy comesbothfromforward ndustries including garments, weaving, weaving, ndustries includinggarments, hailand has internationally beenoneof hailand hasinternationally e textilesaretheUS, Japan, theEU, sector for national growth, localtextile sectorfornationalgrowth, been an important industry in Thailand importantindustryinThailand been an etc. Overall, most Thai home textile etc.Overall,mostThaihometextile oyment, and export contribution. contribution. oyment, andexport nce theend ofnineties,mainlydue s producttypes;carpets (35%), portance oftextile to intenseforeigncompetitionand (Source: DEP, 2007) DEP,2007) (Source: levels. Market shares and levels. Marketsharesand s and entitledthe Market Analysis 43

7.89 6.92 6.80 2006 5.0% 3.6% 3.1% 3.1% 11.07 56.48 95.01 36.43 25.6% 43.1% 16.5% 220.60

9.93 5.88 5.21 3.88 2005 5.2% 3.1% 2.7% 2.0% 52.46 84.32 29.11 27.5% 44.2% 15.3% 190.78

(Source: DEP, 2007) (Source: DEP,

9.05 4.33 4.70 1.93 2004 5.0% 2.4% 2.6% 1.1% 38.52 83.03 38.21 21.4% 46.2% 21.3% 179.78

that there is still huge potential that there is still huge to

of the US market for home textiles of the US

xtile exportedThailand from with the entage (43.1% in 2006) of the total Thai home textiles as it accounts for EU (mainly the UK, Germany andEU (mainly the UK, he EU accounting for the third largest

ontinues to rely on a significant import 3.22 0.96 7.40 2.30 2003 2.2% 0.7% 5.2% 1.6% 35.98 26.42 67.20 25.1% 46.8% 18.4% 143.47

Table 4: Thai Home Textile Exports, 2003-2006 Exports, 2003-2006 Thai Home Textile Table 4:

The US accounts for the largest perc value, followed by Japan (16.5%) with t value total percentage (5%). With the increasing yearly by 5 to 7%, the US c means volume to meet local demand. This penetrate the US market. Also the penetrate the US market. Also Sweden) is fairly important market for about 5% of the total value of home te value increasing yearly by 10 to 15%. % share of total value % share of total value Export to Other Countries Value (Mil EUR) Export to China Value (Mil EUR) Value (Mil EUR) % share of total value Value (Mil EUR) % share of total value Arab United the Export to Emirates % share of total value Export to Australia % share of total value EU the Export to Value (Mil EUR) Export to Japan Value (Mil EUR) Export to the United States United Export to the Value (Mil EUR) % share of total value Total Thai Home Textile Total Thai Home Exports Value (Mil EUR)

44 Market Analysis (Source: DEP,2007) Figure 17: Thai Home Textile Revenues basedonExportMarketsFigure 17:ThaiHomeTextileRevenues Table 5:Import andExportofSilk in Thailand Value per ton (EUR thousand) Value perton Import Volumes(tons) (EUR thousand) Import Values (EUR thousand) Value perton (tons) Export Volumes (EURthousand) Export Values Year 2005 ton comparedwithsilk yarn. and exportvalue,itissilk yarn.Whilesilk importing warp-suitable mainlyforweftuse and yarn quality. Thailandisproducingandexporting importandexportofyarnis simultaneous respectively.Fo EUR, 5,149.77 thousand repres fabric importedtoThailand co Overthesameperiod, respectively. 350.83and9,784.18 represented In 2005,silkwaste, silk yarnand

fabric that has moret

Rearing Cocoon ented 186.43, 1,753. ented 186.43 34.00 5.48 and 14,030.27 thousand EUR, and14,030.27thousand 0 0 0

silk fabric exported from Thailand fromThailand silk fabricexported

yarn has the largest share in import shareinimport yarn hasthelargest coon, silkwaste, partly due tothedifferenceinyarn Reeling 1,753.00 r silk yarn in particular, the particular, the r silkyarnin 576.00 359.83 98.40 (Source: THTI, 2006) THTI, (Source: han two times the value per han twotimesthevalueper 3.04 3.57

00 and 11,533.20 and 11,533.20and 00 and 11,533.20 Silk Yarn 9,784.18 579.00 413.00 silk yarnand 19.92 23.69 Weaving

Silk Fabric

14,030.27

5,149.77

220.00 53.09 97.00 63.77

Market Analysis 45

4.59 4.58 3.55 4.38 5.84 2006 22.94 25.4% 20.0% 20.0% 15.5% 19.1%

6.82 5.23 3.00 3.36 5.75 2005 24.16 23.8% 28.2% 21.7% 12.4% 13.9%

3.66 5.18 4.85 3.12 5.10 2004 21.91 23.3% 16.7% 23.6% 22.1% 14.3%

2.92 4.87 3.87 5.25 1.33 accounted for the largest percentage 2003 7.3% value, followed by Japan with 15.5%. 18.24 16.0% 26.7% 21.2% 28.8%

silk exported from Thailand. Korea and 5.84 million EUR in 2006, an increase of are the EU, Korea, the US, and Japan. and Korea, the US, are the EU, (Source: THTI, 2007)

Main export markets for Thai silk Thai Main exportmarkets for

Table 6: Thai Silk Exports Table 6: Thai Silk (25.4% in 2006) of the total value of the US accounted both for 20% of the Thailand’s silk export to the EU was 11% compared to 2003. The EU (mainly Germany and the UK) % share of total value Export to Other Countries Value (Mil EUR) Value (Mil EUR) % share of total value Export to Japan Value (Mil EUR) % share of total value % share of total value States United Export to the Export to Korea Value (Mil EUR) Value (Mil EUR) % share of total value Value (Mil EUR) EU the Export to Total Thai Silk Exports 46 Market Analysis exports ofThaihometextiles. had theyear2006,silkhometextiles for Annex is givenin according toHSCode andhome textiles .8%), 3 accessories (2 intermediate products (e.g.silkyarns, types were three product there , 6 0 0 In 2 in value million SharesofSilkExportsFigure 19:ProductType’s fromThailandin2006 (Source: THTI, 2007) 2007) (Source: THTI, Figure 18: Thai Silk Export Revenues basedon ExportMarkets Figure 18:ThaiSilkExportRevenues

EUR (Source: Customs, 2007) Customs, (Source: silk fabrics) (6 3 .7 %), garmentand %), .7 3 silk fabrics)(6 an approximate 1.3% shareinthetotal an approximate1.3% 11.3. Customs reported in 2007 that in 2007 Customsreported 11.3. (1 2 .5 %). More Detailedinformation %). .5 2 (1 of silk sharing the export market; sharing theexport ofsilk

Market Analysis 47

atistics to verify the atistics to verify the iles that are exportedare to the EU.iles that Textile Exports in 2006 in million Textile Exports that only a very small percentage that only a very of small EU markets as Northeastern home EU markets as Northeastern difficult to find reliable st to find difficult (Source: Customs, 2007) Photo 21: Selling Silk on “Cotton & Silk Exhibition” “Cotton & Silk on Silk Photo 21: Selling As mentioned before, it is mentioned As EUR Figure 20: Percent ShareFigure 20: Percent of Silk Home percentage of Northeastern home text Several informants of this study estimate Northeastern home textiles are sold to textiles haven’t been marketed broadly countries. in EU 48 Market Analysis Germany, theUK,France, 3.4 Future Trend as unemployment. competitionontrade intensive price well as fashion developments. limitations such asrising unemploym ofand/orfurthergrowth recovery substantial investmentsin The outlookisdistinctly brighter All these factors willleadtonew • • • • • • • by: countries is togrowsl also expected inEU expenditure Consumer 2005-2009. fortheperiod growth of2% consumpti the Forecasts regarding markets. Austriamayemergeas more Sweden and consumption intheEU (CBI, 2006).Ho of 75% markets, accountingfor the countrygrows. as prosperity behaviour in purchasing EU member Consumers inseveralnew demandforhometextiles. an increased As domestic housing increas EU countries. multinationalsinseveral by foreign encouraged groupsand age younger A continuinginterestin more fash andthemovementtobecom households twoperson- number ofoneand growing age, increasing average factors in indemographic Changes EU. markets in thetextiles, has had ahugeimpacton several underdeveloped etc., withmodern retailingstylesdedi foreign companies,like The arrivalof forinteriors. andtelevisionprogrammes by homemagazines Increased attentionofconsumers naturalfibres. demandfor There isastableandhigh

all areas including home textiles.Otherfactorsare allareasincludinghome Italy andSpainwillconti es inlinewithpopulationgrowth,therewillbe demands andnewc Negative developments arebasedon Negative developments in Eastern Europe, where needsjustify in EasternEurope,where owly further in 2007 and beyond, caused beyond, 2007and owly furtherin the household andfurnishingtextiles the household on of home textiles predict an annual predictanannual on ofhometextiles level and economic developments such developments economic level and ent and low consumer ent andlow for fashionableproducts,encouraged in theeconomicsituation, despite ionable home textiles, especially of textiles,especiallyof ionable home cated tohomefurnishingsincl. Ikea,ZaraHome, Ka International increases and foreign investment in in investment increases andforeign wever, the Netherlands, Belgium, theNetherlands, wever,

most EU countries includingan important playersas future import ing more multi-ethnic ing moresocieties. states will become more aspiring states willbecomemoreaspiring nue tobeprimaryimport onsumer behaviour. onsumer behaviour.

confidence,as

Market Analysis 49 many aspects of competition on the the exhibit, and the fully analyse these er demand. Although er demand. Although the contact with new the es has led to a more es has ure, but might get lost critical importance. For situation involved. For that can be purchased that can . At a more specialized . At tch the new product to meet the on, there is a greater level of there is a greater level on, e, but there will not be as many heir level of vertical integration in of vertical heir level tailers with whom they are already r, Pasaya, notes that there is a the EU market with a product there the EU market with a product there rs have a well-defined target market rs have a well-defined target market crease and this leads to further gners their to give collections a more hen a small, focused show may hen a small, focused show may be greater interaction with suppliers with suppliers greater interaction by set of locations. There are pros and set of locations. There are pros textiles. The keen textiles. The keen portant to the success of participation success of participation portant to the s, encompassing a wide variety of es of those tending oduct to market matching’ process is oduct to market the exporter who wants to attend one. st countries. However, exporting home st countries. However, he most appropriate trade and fashion he most -depth understanding of -depth understanding Exporters should care better match consum entry level, this is of this entry level, y includes retail products y includes anufacturing in EU countri anufacturing the specific product and the host of other products host of other the around the world, to small shows focusing on a high exposure and improve exporters can get high expos exporters can get high example, at a big show, example, or loose visibility among noticeabl show, exporters might be more im on, are all lighting, and so location, in a trade show. Producers can ask the re which are t to suggest contact in shows that can provide potential clients and other retailers. people to notice their products. If exporte their products. If to notice people t and can only supply small quantities, best. The quality of display, the activiti pros and cons relative to and cons pros A successful Thai home textile exporte plethora of trade shows available to These range from very large show products from countries products from a limited line of narrow cons to different kinds of shows. example when a producer wants to enter when example must be a good understanding on how to ma needs of the market. home textiles market will home textiles market in steadily low-co for exporters in possibilities textiles to EU countries requires in EU marketing, a ‘pr the markets. In and, at the adopted readily being from suppliers, but also now involves but also from suppliers, to them to design products helping decline of domestic m The this sector and this sector often have their own desi onl This not unique outlook. EU home textile EU home retailers are t increasing the retailer will not manage the producti retailer will not manage the development. involvement in design internationally oriented trade internationally oriented in home 50 Market Analysis The segment of organically gr The segmentoforganically focus onservingcreative and niche markets. pricesensit become very knitting patterns. Overalltheconsumer fibres ofAlpacas raisedintheA “industrial”sw (compare an environment Examples include;fairtradeproduc price fora reflectingtheproduct crit about theirchoiceofgoods revealthatthe pub Surveys European handcrafters. consume. However, this textiles, including home as consumers significant opportunity forhandcrafted of The dominance mass-produced goods inEUmarkets. including worldwide design skillscangivet materialsthat raw dr High value-added fashionplaysanincreasi that however, rates(o segment offersgoodgrowth anespeciallyinterestingnic represents

Photo 22:HandcraftedSilkTable Set he industry tremendous opportunities to compete opportunities tremendous he industry ive. Handloom producers therefore need to be more tobemore producersthereforeneed ive. Handloom opportunityisonefilled andarebecomingmorewillingtopayahigher own andecologicallysoundproducts own ndes) and products with adapted ethnic withadapted ethnic ndes) andproducts lic isbecoming increasinglydiscerning ver 5% in 2005). Itshouldver 5%in2005). benoted aw from strengths in engineering and and aw fromstrengthsinengineering ts, product ts, product stories and production s inmost categorises have however eater with one produced fromAlpaca with oneproduced eater eria theybelievetobeimportant. look for interesting new products to products look forinterestingnew ngly important role in this segment. rolein ngly important he inthehometextilesector.This merchandise inmany merchandise categories, within the marketplacehas created with challenges for the with challengesforthe Industry Structure 51

some villagers buy some villagers buy their mulberry plots for silkworm not at all not at all integratedwell and the silk ws and Analysis by the Survey and Analysisws Team, 2007) by weaving factories; weaving factories; e silkworms, reel the cocoons and selle silkworms, reel farmers raise silkworms and sell cocoons and sell farmers raise silkworms

(Sources: QSIS, DEP, 2007 and Stakeholder intervie Figure 21: Sector Map of the Northeastern Home Textiles: Silk sub- sector yarn and concentrate on dyeing and weaving; and complete the whole some process from planting and maintaining rearing up to woven fabrics and products. selling dyed sector is relatively complex. Some sector is relatively rais some factories; for processing in other silk yarn, either to villagers or to The Northeastern textiles home sector is 4. Industry Structure Structure 4. Industry 52 Industry Structure Silk arethe main suppliersofimproved QSIS andafewCurrently, privatecom resistant to diseases and givinga bette have someof the qualitiesofpolyvolti in equi investment additional when an with some producing50% rearers; mo bytheDepartment was produced variety release inthe andextendedtorearersin early1980s Thailand.TheDokBua silkworm va Poly-bivoltine Mulberry metres about600-800 varieties produce can also means PolyxPoly,BiBi, Bi Theseva can alsobereeledinfactories. size intermediate that areusuallyha (poly) andforeignbivoltine(Bi)par silkwormhybridvari Thai Mulberry 4.1.2 ThaiMulberry silkworm hybrids (poly-bivoltine,yellow cocoons) The silkwormvarietyist 4.1 Silkworm Egg Suppliers disease exposure levels. disease exposure andbivo more silkthan poly-bivoltine more silkworm varietiesare,however, with diseasessuchas because oftheusenon- dis Asaconsequence, rearers. between extension servicesbutthere issome silk moths. a Most rearersdonothave s theirown usuallybreed Small rearers ofsilk yarnperday. amaximumofonly200grams get cocoons byhandand length ofacocoonisabout 250-300 These nativesilkwormspr stocks basedonegg produce, traditionally silkworms va Mulberry The polyvoltine Mulberry4.1.1 Native varietiesyellow silkworm (polyvoltine, cocoons) Deta andbivoltine. poly-bivoltine, Mul silkfromthreemajor 100% mulberry Cu entire silkvaluechain. he primary determinantof t Pebrine rrently the silk production in Thailand is almost inThailandisalmost silkproduction the rrently oduce small,yellowcocoons certified stock.Silkwormeggsare often infected iled information is given below. iled informationis given below. and rieties were developed for commercial forcommercial rieties weredeveloped eties arebredfromnativepolyvoltine ents. They produce yellow cocoons Theyproduceyellow of ents. nd reeled by the rearers although they although they by therearers nd reeled ne silkworms;beingeasy to rear,more ltine varieties under comparable high high undercomparable ltine varieties panies such as Jim Thompson and JT panies suchasJimThompson andJT informal trade in breeding cocoons cocoons informaltrade inbreeding x Poly, (PolyxBi) Bi. Poly-bivoltine Flacherie. Flacherie. pment is made. These new varieties pment is made. Thesenewvarieties ccess to stocks formal breeding from ilkworm eggs from their own selected ilkworm eggsfromtheirownselected (poly-bivoltine) silkwormvarieties. re cocoons than polyvoltine varieties re cocoonsthanpolyvoltinevarieties of silk filament percocoon. r yieldthan thepolyvoltinevarieties. tolerant to diseases and produce tolerantto diseasesand produce metres. Most small producers reel metres. Mostsmallproducersreel berry silkworm varieties; polyvoltine, polyvoltine, silkwormvarieties; berry ease transmission is relatively high ease transmissionisrelativelyhigh rieties are varieties thatfarmers varieties rieties are of Agriculture and proved popular proved popular ofAgricultureand rieties are mostly PolyxBi,butit rieties are that they maintain themselves. themselves. that theymaintain Most native polyvoltine Most nativepolyvoltine he characteristics of the he characteristicsofthe . The silk filament silk filament . The Industry Structure 53 ine silk namely; some of the newer e supply of bivolt e ich are suitable for factory reeling. coons with a silk filament length silk coons with a the exception of both weft and warp. At present, there warp. At both weft and eties are bred from foreign bivoltine ogies and hygiene requirements. The on is disease, and rearers must be on is disease, and rearers must be eeled by powered reeling machines and Photo 23: Yellow Silkworm Cocoons Silkworm Photo 23: Yellow Photo 24: White Silkworm Cocoons Photo 24: White Silkworm breeds. Bivoltine varieties produce co breeds. Bivoltine ranging from 600 to 1500 meters. Chul Thai Silk Co., Ltd. intensively trained on rearing technol strong enough to be r silk filament is can produce a high quality silk yarn for whichcompany th dominates is only one The major riskproducti of bivoltine

4.1.3 Foreign Mulberry silkworm hybrids (bivoltine, white (bivoltine, cocoons) hybrids silkworm 4.1.3 Foreign Mulberry Foreign Mulberry silkworm hybrid vari parents. They produce large cocoons, wh with Bivoltine cocoons are usually white, 54 Industry Structure (Poly-bivoltine) 2. ThaiHybrids (Polyvoltine) varieties 1. Native (Bivoltine) Hybrids 3. Foreign (Sources: QSIS, NEED, 2006 and Stakeholder interviews & Analysis by the Survey Team, 2007) Team, 2007) by theSurvey &Analysis Stakeholderinterviews NEED, 2006and (Sources: QSIS, Thailand Table 7:Advantages &Disadvantages of Silk Variety

• • • Extension services • • eggs Silkworm • • • • • •

High yield parent breeds certified andrecommended adviceon QSIS –provide etc.) eggs, mulberryseedlings, houses, chemicals,silkworm free inputtofarmers(rearing provide QSIS –occasionally supply having limited low pricebut sell at QSIS – (occasionally) charge QSIS –freeof Tolerant todiseases Very low cost eggs bythemselves. Farmers canbreedsilkworm Quick return/highincome atanytime Can behatched Disease freeeggs

Advantages

the differentSilkVarieties in

• • • • • • • • • • • • Susceptible to diseases Susceptible to infestation Cause ofdisease Lower yield silkworm eggs trained priortohandling Rearers mustbeintensively High inputcosts High investment High prices diseases Susceptible to themselves. rearers todevelop etc.) mightdiscourage chemicals, (silkworm eggs, Free inputfromQSIS Inconsistent supplies Unreliable quality unhygienic conditions rearerswithNot suitablefor Disadvantages

Industry Structure 55 rs for obtaining (11.4%), Chaiyaphum hat the value chains for chains for the value hat however a certain degree of ) are in the Northeast. Mulberry use. The two types use different two types use different use. The

as well as technical assistance can either be reeled by hand can either or by care in the early silkworm stages. st completely replacedcompletely by improvedst mulberry plantations to grow fodder on is the mulberry leaf, used to feed rm eggs and rearingrm eggs silkworms until concentrated in the provinces of occupation could be growing rice or productive, as they can yield 18-22 small farming sector relies on of the Thailand is estimated at over 24,000 Thailand is estimated list of advantages and disadvantages aint for the Northeastern region. aint for have occurred over time as farmers sponsible for retaining sponsible quality of the s for home-use usually undertakefor home-use this s improved extension services provided ng factory. Farmers whoFarmers rear bivoltineng factory. rking as hired labour. Cocoons are silkworm egg supplie Foreign hybrids are not completely on of mulberry, as irrigation and water to two main types; rearingto two main types; for home eelers by supplying them with cocoons eelers by supplying them with organisations such as the EU, JICA, hon Kaen (14.7%), Surin worm types. This means t cted directly by reeling factories and are therefore the farm level, there is silkworms. The mulberry planted area in (83% hectares, of which 20,000 hectares production in the Northeast is mainly Mahasarakham (22.4%), K silk producti inputs in One of the primary can beSilkworm rearing divided in handicraft use and rearing for industrial At varieties of silkworms. 4.2 Rearers Rearers are engaged silkwo in hatching they spin their cocoons. They are re cocoons. their they spin cocoons by giving proper nutrition and have their own small Most rearers also to Rearers link for their silkworms. is given in Annex 11.6.farming of contract often not engaged in producing yarn. A often not engaged silkworm eggs and they also link to r also link to and they silkworm eggs for further reeling processes. substitutability between silk native varieties, and Thai-hybrids separated. Farmers who rear silkworm mainas a secondary activity, while their field crops, rearing livestock, or wo generally reeled by hand when polyvoltine varieties are reared. When poly- bivoltine varieties the cocoons are reared machine or even can be sold to a reeli varieties are usually contra (9.1%) and Buriram (9.0%) respectively. Local mulberry varieties have been almo mulberry varieties in the major sericultural provinces of the Northeast. majormulberry varieties sericultural provinces of the in the Improved mulberry varieties are more tons of leaves per hectare. The majority natural rainfall to support the cultivati availability remains a major constr Improvements in cultivation techniques gain experience and also benefit from both by government extension services from various internationalprojects Kenan, etc. 56 Industry Structure from which the loan repayment issubtracted. from whichtheloanrepayment 10% ofthe value incash.Therema the companytodiscussproblems.de On their deliver scheme. Whenthefarmers company theyareimmediately excluded sold tothe company. If they aredi vehicl inair-conditioned are transported ensure success.Thefarmers areprovi technicians onthe supervise fumigation CTS TrainingCentre.Duringthefi physical structureanddrainage.Farmers on technicians concentrate farmerw ofevery area land proposed creditworthiness bycommercial banks. screened for selection inthe of farmers,whoare closely involved which ha kg. of cocoons pereggsheet loans,arearer production to repaythe forthefamilylabourand In toguarantee areasonablereturn mulberry. order onafulltimebasisand production he to commit himself plustwoother fa To becomeacontractfarmer T ofChul mini fromhishouseanda room separate centres. Inorder toparticipateinthe inalimitednumberofvillagessurroundingthedrying made withfarmers constructed inKhonKaen backthe will purchase finally they silk supply poly-bivoltine Jim Thompsonhassetup a Photo 25:SilkmothonCocoon Eggs with worm eggs, rearing room fumigation worm eggs, room servicesand rearing and Nakorn Ratchasrima provinces. Contracts are Ratchasrima provinces.Contractsare and Nakorn confirming thesuitability network of contractfarm scovered sellingcocoonstoanyother network, a farmer has to have a rearing network, afarmerhastohaverearing cocoons. Dryingfacilitieshavebeen inder ispaidthroughabank account s about 20,000 silkwormeggs.CTSis s about20,000 ded with second instar worms, which ded withsecondinstarworms,which hai SilkCo.,Ltd.(CTS),afarmerhas rst twoyearsofproduction,CTS ho wants to join the scheme. These tojointhescheme.These ho wants Technicians fromCTSwillsurveythe mily memberstoworkin the silk must achieve an average yield of 25 yieldof25 must achieve anaverage es. All outputsofcocoons mustbe mum of 0.3 hectare of mulberry. mum of 0.3 hectareof livery of cocoons, a farmer receives afarmer of cocoons, livery must plantatlease 2 hectares of cocoon they meet with officials of officialsof they meetwith cocoon farm. This processisessentialto are also sent for trainingatthe from future participation in the from futureparticipation inthe of available land, soil of availableland,soil ers towhich theywill Industry Structure 57 lly the price is lly the price y (percentage of ers. Cocoons are sold ers. Cocoons are sold rm respectively. In rural areas, time it reduces migration of ruralreduces time it in the Northeast are polyvoltine in the rmers in the village. Substantially rmers in the village. involved of bivoltine in production net income of traditional practice net income of ers in the Northeast and the rest of ers in the Northeast the rest and of d per box). Genera d per box). ice for Grade A cocoons at 3 EUR ice for Grade at 3 A cocoons ed supplies of breedinged supplies of stock, the ices based on qualit eties of silkworms (about 20,000silkworms (about eties of l practices and use their own breedingl practices and use 36 EUR), Poly-bivoltine and bivoltinePoly-bivoltine 36 EUR), depending on the cocoon Jim quality. so provides jobs for women and older of 30,000 Baht (about 682 EUR) and andof 30,000 Baht (about 682 EUR) ng and the reduced disease resistance. reeling at a guaranteed price based on them are contract farm them are contract Photo 26: Mulberry Field Photo 26: Mulberry around 2.2 EUR per varies kg. but this for example,Thompson, pr has set the per kg. in 2007. Conservative estimates value the yearly Conservative value estimates rearers at 1,600 Baht per farm (about farmers report a yearly net income 115,200 Baht (about 2.618 EUR) per fa have much land who do not generating for poor farmers sericulture is income and little capital for investments. It al people in the villages, whilst at the same people to big cities. Many (approximately 93,000) households farmers, who generally apply traditiona moths with other fa moths or exchange Reeling factoriesReeling set cocoon pr usually fewer but more commercial oriented farm Thailand produce poly-bivoltine vari households).the limit is due to This improved technology needed for reari There are approximately 7,000 farmers silkworms and almost 100% of for further machine company to the quality. defective cocoons, shell ratio and yiel shell ratio cocoons, defective 58 Industry Structure 3. Cocoonproduction 2. Farmsize variety 1. Silkworm 8. Incomeperunitarea 7. Totalincome(EUR) silk (EUR/kg.) 6. Priceofraw (EUR/5. Price ofcocoons silk production4. Raw (kg./ - Cocoonyield (kg./box) - No.ofsilkworm egg(box/ - Rearing (crop/year) - Size ofrearing house - Size ofmulberry plot (Sources: QSIS, NEED, 2006 and Stakeholderintervie NEED, 2006and (Sources: QSIS, Table 8: Characteristics oftraditionalandcommercialrearers Table 8:Characteristics (EUR/ha/year) kg.) year) crop) Items/Type of Rearers Items/Type of

Small farmer (Native variety) Empty space Traditional Polyvoltine 0.08 Ha/farm under the Rearers house 454.55 36.36 18.18

1.82

ws and Analysis by the Survey Team, 2007) by Team,2007) theSurvey ws andAnalysis

0.5

12 2 4

Small farmer Poly-bivoltine Poly-bivoltine (Thaihybrid) Small Scale 0.48 ha/farm 1,420.45 Commercial Rearers 6 x 8m 681.82 20.45 2.16 33.9 18

2 8

2

Medium farmer (Foreign hybrid) Commercial 960 (cocoon)

Bivoltine 1.6 ha/farm Scale 8 x 16m 1,636.36 2,618.18

2.73

30 4 8

2 -

Industry Structure 59 these cocoons. The cocoons. The these hand it is difficult to standardize filament is not strong enough to bestrong filament is not technology. There are types two of of cocoons to be reeled.of cocoons to be Polyvoltine eel raw silk from eel raw silk capabilities and levels of skill for the capabilities and levels of skill hand reelers is typically uneven. As Photo 27: Hand Reeling raw silk largely raw silk dependthe on amount and the polyvoltine cocoons can only be reeledpolyvoltine cocoons can by the production as reelers have different reeling process. Basic hand reelers usually produce around 200 gram of yarn per day. Reelers using a simple hand-powered wooden reeling machine can produce up to 500-1,000 gram of yarn per day depending the reeling on size of silk yarn produced by machine. The

there are In the Northeast, more than 100,000 hand reelers and approximately 10 reeling factories, with one large reeling factory in located from CTS Petchaboon province. 4.3 Reelers 4.3 Reelers buy Reelers rearers and r from cocoons quality of cocoons and the used reeling quantity andquantity the quality of yarn produced in Thailand; hand reeled and machine reeled. two These technologies correspond with the variety be handvarieties can only reeled as the reeled by powered reeling machines. When hand will put a reeling, a reeler handful (about 20) cocoons a pot ofat a time into boiling water. The filaments cocoons are of these togethergathered and by gathered pulling the filaments the filaments will unwind from their cocoons and form a single multi- strand thread.Most hand the thread pull reelers still by hand, but simple hand- powered and motor-driven reeling machines are way increasingly used as a to speed up the process and produce a more even yarn. 60 Industry Structure be distributed to weavers tobe be distributedtoweavers input suppliers.Afterthe process ofya colour palette,etc.Chemical dyes c scarcity of naturaldyes andtheirdraw locally. Chemicaldyes are alsoappli come from fruits,leav dyes generally Natural traders. yarn and reelingfactories(machinereelers) reelers, hand dyeing.Non-pr bleaching and invo yarn. Silkcolouring the dyeing dyersint morethan200 There are 4.5 Dyers customersando services tofar-away withtheirs long-term relationships fabrictrader and the yarn by provided accessories related todyeing,weavin Besides yarnsandfabrics,otherrawma home textileproducers. obtain silkfabricsfrom Thes weavers. theNortheast in traders 200 Morethan provinces. different orfrom province semi-formal) formaland contract (both leve factories. Districtandprovincial community with they trade well asthat individual households atthevillagelevelsell Yarn traders reel andpoly-bivoltine from polyvoltine tradersinthe morethan200 There are Yarn&FabricTraders 4.4 Vietnam,andisoften mainly fromChinaand smuggled. thickness.Asa consequenc with variable inThailandisweftyarnasithandreeled Most of the yarn produced takes place on acommercialscale,produc from cocoonspurchased with bivoltine done motorpowe withlarge Factory reeling and dyers inside their village anddyersinsidetheir ocessed yarns are derived from three sources: ocessed fromthreesources: yarns arederived used in the weaving process. used intheweaving an be obtained fromyarntradersan beobtained orlocal ffer creditforlong-termcustomers. lves operations suchasde-gumming, lves operations he Northeast who are responsible for whoareresponsiblefor he Northeast uppliers. They also provide delivery delivery uppliers. Theyalsoprovide g and home textile production arealso g andhometextileproduction backs in terms of colourfading,limited rn dyeingiscompleted, dyed yarnswill ed inthe processdueto dyeing the mainly polyvoltine yarn. Theysellto mainly polyvoltineyarn. , district and provincial level weaving weaving level , districtandprovincial s. Powerful traders usually establish tradersusually s. Powerful l traders normally sell yarn under under yarn sell normally l traders e silkfabricsarefurther suppliedto es, roots, etc. which are available red machinesisalmostexclusively red ers and bivoltine reeling factories. bivoltine reeling ers and Northeast gettingsilk Northeast yarn supplies toweaving factorieswithin their e, warp yarn needs to be imported, tobeimported, e, warpyarnneeds terials or inputssuchasdyes and ing both weft as well as warp yarn. weftaswell ing both as warpyarn. contract farmers.Thisreeling contract orinnearbyvillagesas Industry Structure 61 iate products to e and skills thate and skills hout bivoltine yarn) are genous knowledg generation each in region. Silk or supplied to printers in case theor supplied to printers in case the last three types receive non- the last three types weavers often have to purchase weavers often have or are a mix of yarn from local a mix or are on with a fabric length of 28 meters yarn dyeing and printing yarn dyeing and facilities well as power looms.well as There are 5 oducers as intermed pecialize in one of the three different in one of the pecialize from reeling factories (mainly CTS). from reeling factories (mainly rn traders. As a result, most of the a result, most of As rn traders. ng and printing facilities. The first two ng and printing first facilities. The gn (bivoltine) silkworm varieties. The the weavingthe Northeast; process in only a small number of producersonly a small number produce Thai silk fabrics (wit y dependent on indi le weavers. Photo 28: Silk wovenand Shuttles Photo 28: Silk Handloom on primarily small-sca Generally tend to s most yarn producers

processed yarns from traders or directly processed yarns As a result, varieties of silkworms. yarns.both weft and warp Consequently warp yarn from or ya reeling factories sect fabrics produced by the traditional 4.6 Weavers Silk weaving is done on handlooms as different types of weaversdifferent involved in handloom weavers, power loom weavers, handloom weavers with yarn handloom weavers with dyeing facilities, and power loom yarn dyei with weavers types obtain dyed yarns from dyers while (polyvoltine or poly-bivoltine) and forei few that are producing 100% Hand weaving is a labour intensive operati requiring up to 20 days to weave. The differentiation of designs, patterns and colour schemes is highl have been transferred from generationto fabrics will be supplied to home textile pr or decorationproduce items home textiles weavers have no printing facilities. weavers have no printing facilities. 62 Industry Structure Photo 29:SilkCushions not haveaprintingcapability do generally Small-scaleweavers Printing isamethodofcolouringfabrics. 4.7 Printers raising, yarn making, yarn dyeing, hand hand dyeing, making, yarn raising, yarn controls textile producer most of the typeofhome ways.One finishingintwodifferent sewingand undertake who inthenortheast textileproducers 300 home more than There are Home TextileProducers 4.8 distributed tohometextileproduc yard of according topatternandnumber factoriesinthe No 30 fabric-printing be printedtheywillsenttopr need to because ofthehighinvestm ers for sewing and finishing. ers forsewingand supply processes supply processes starting with silkworm inting factories. There are more than inting factories.Therearemorethan weaving, until the final production of of thefinalproduction until weaving, rtheast. They charge for printing forprinting rtheast. They charge s. Printedsilkfabricswillthenbe demands and preferences. preferences. demands and customer tounderstand needed a stronglink with marketsis designs isrequired.Additionally, continuous developmentof a demand, quickly tochanging toadapt trends. Inorderable fashionto copewithchanging design input professional proper home textileproducersrequire traders. Asstatedpreviously, factories and fabrics from fabric fabricsfrom weavers, weaving include fabricsfromhandloom in themarket.These materials textiles from materialsacquired isproducinghome of producer communities. The second type rural different of cultures the techniquesreflect weaving colours,as designs and well as pillow cases,etc.The specific scarves, placemats, bedcovers, suchas products home textile ent costs.Iffabrics Industry Structure 63 product grades y chain. Forwardy chain. ation is not freely shared among ation is not minimal control over the price of s of exporters regarding size and with consumers in the chain, there the in consumers with of implementation of holesaler-retailers. The producer’s hat clutter the suppl oducers do not get market information st of their products are traded through informal Although producers may have directAlthough producers links may and backward linkages are weak and inform Most pr the chain. the participants in and are thus unaware ofthe requirement and standards that leave the producers with their products. Figure 22: The process steps from silkworm rearing to home textile products are many layers of middlemen/traders t quality. This is because mo contract buyers, wholesalers, and w situation is further aggravated by a lack 64 Industry Structure Thompson in manycount Thompson in in itsfactories andismarketingit processing, designingandprinti weaving, itsowneggs, producing purchasi yarn, understand eachspecif understand Due tothedifferencesbetweenc of verticalintegrationin market withashar Thompson, officially known asTheT 200 tradingagencies/exportersinThail different countriessuch astheUS, J these andsupply producers home textile exporterssourcehome Trading agencies/ 4.9 Trading Agencies/Exporters producers andpacktheseproducers productsaccord buy on trust.Traders/domesticwholesalers informal, oftenwithno written cont and is normallylong-term andretailer trader producer, between relationship retail outletsandactasaninformat market access supply forproducers, wholesalerslinkproducer Traders/domestic with pricesthataresimilartothos good quality markets receivefairto retail outlets as well traders/domesti traders/domest morethan300 There are 4.10 Traders /DomesticWholesalers textiles. arealso theirexports portfolio and usually Trading agencies/exporters have silkproduction. Thecomp ic marketandassociated ries around the world. aroundthe ries e of over 50%. 50%. Jim Thompsone ofover isasuccessfulcase s products through retail shops namedJim s productsthroughretailshops racts. Business dealings are done based e offered to trading agencies/exporters. e offeredtotradingagencies/exporters. apan, theEU,etc.Therearemorethan not limitedtosilkproductsandhome not products from home textile producers products fromhometextileproducers ountries, all chain actorsneedto hai SilkCo.,Ltd.) isdominatingthe c wholesalersinotherregions.These finished products todomestic finished products chain and but only one large exporter (Jim exporter and butonlyonelarge ion broker between the two.The betweenthe ion broker ng itsfabrics, tailoringthese fabrics ing to orders fromlocalretailers. ing toorders textile productsdirectlyfromlocal ic wholesalers who servicelocal ic wholesalerswho ng yarn from smallholders for for fromsmallholders ng yarn a well-diversified textile product textileproduct a well-diversified home textile products from their textile products home s tolocalretailoutlets, provide products to foreign buyers in in to foreignbuyers products any issupplyingsilkworm customer requirements. customer requirements. Industry Structure 65 characterize the confidence in the l opportunity to capture

ucts directly from home textile textile from home ucts directly as street vendors as street and retail formal ade in Thailand Tradeade in Thailand The Fair. s. For the formal retail traders, there the high and levels of counterfeit stribution channels tional trade fairs which are verytional trade well fairs which holesalers. Tourists and local people local people holesalers. Tourists and within the domestic market such as domestic market within the ganized by the government,ganized by the at both ls erodes consumer on and theCommunity Development Silk. There is a potentia s and housing projects. Photo 30: Silk Scarves on Mai Night Bazaar Chiang 4.11 Outlets Local Retail such outlets several local retail There are traders whotraders receive home textile prod producersw or from traders/domestic are the main customers for street vendor and exhibitions, or are several fairs provincialnational level. Na as well as the OTOP and the M known include DepartmentExport of Promoti Department are organizing OTOP the per year. Provincial3 times fairs 2 to annualtrade fairs include at each province. fairs organized domestic market sector. In particular imitation silk being soldat all leve Weak penetration, along with limited di authenticity and value of Thai more profits from niche target groupsmore profits from niche high-end hotels, resort 66 Industry Structure • • • • • Pre-production Stage 4.12 Supplying Industry used for niche products only.used fornicheproducts alter commercial aviable not dyes are dominates thesupplyof them.Currently,ther that demand trouble iftheQSIS e cannot provide ontheQSISforsupply dependency farmersin terms than thepolyvoltine byQSIS. exclusively supplied Poly-b Cocoon production islabour production Cocoon Acid dyes are the most commonly used themostcommonlyused Acid dyesare freshlypi 5-10kg.of equivalent to 1 about the samewithnaturaldyes dyestuffs to dye 1kg.textilefabri According tosub-sectorsourcesit techniquesandlow management areexperi variety rearers polyvoltine humi temperature, proper particularly ofsilkwormsrequires The rearing t contract farmersofafewcompanies, timethey start a silkworm eggsevery bivoltine s and For poly-bivoltine varieties, accountsforapproximate The total costof bivoltine varieties. variable costsbecomemoresignifi small forre costsare variable other polyvoltine varietiesto31%forbivolti 52%ofthe from totalcostsforrearing are themostcostlyinput,ranging or localinputsuppliers. dyescan Chemical and Japan. China silk inThailand.Othersupplies Ltd. ThaiCo., (Dystar company European aceticacidorsulphuric vinegar, synthetics.Aciddyes nylons andother suchassilk,wool,m animal fibres well commercially as used both dyes are

bivoltinesilkworm. intensive. Rearers reported that labour needs needs thatlabour reported Rearers intensive.

hygiene standards andcontrol. standards hygiene cs to a medium shade colour. To obtain cs Toobtain to amediumshadecolour. ly 30% oftotalproductioncosts. ly 30% ilkworms, rearers need to get new togetnew need ilkworms, rearers encing low cocoon outputs due to poor poor dueto outputs lowcocoon encing the market are mainly imported from the marketaremainlyimportedfrom cked leaves.Thism takes about20gramsofsynthetic cant when rearing poly-bivoltine and cant whenrearing e isonlyonecompany(CTS)that ohair, angora, alpaca but also some alsosome but alpaca angora, ohair, mulberry production, for all silkworm for production, all silkworm mulberry to set the colour. There is only one onlyone is to setthe colour.There nough silkworm eggs for all farmers silkwormeggsforallfarmers nough aring polyvoltine varieties but these butthese varieties polyvoltine aring ne varieties. Apart from labour cost, Apartfromlabour ne varieties. ivoltine farmers have a greater risk risk a greater have ivoltine farmers kg of dried leaves are needed, i.e. i.e. needed, leavesare kg ofdried new rearing process. Apart from the process.Apartfromthe rearing new dity and hygiene control. Currently Currently control. dity andhygiene be obtained from yarn/fabric traders traders fromyarn/fabric be obtained native and they should primarily be be primarily theyshould native and he poly-bivoltine silk he poly-bivoltine specific environm require the useofanacid suchrequire the as chemical dyesfor of susceptibility todiseasesand of silkworm eggs. They may be in of silkwormeggs.Theymaybein as by studio dyers to dye protein/ dye to as bystudiodyers ) that supplies chemical dyes for ) thatsupplieschemicaldyesfor

eans that natural eans thatnatural ental conditions, ental dyeing silk.Acid dyeing worm isalmost

Industry Structure 67

es is, at the es is, at ial cancer risk. for the export of r all EU countries is r all EU

used. Optional labelling origin marking and other formation is best obtained formation is there is a great potential to Testing for AZO dy Testing for AZO including international airfreight tionship with an airfreight carrier, ed fabrics to remove excess colour to remove excess ed fabrics successfully. Certifications that successfully. Certifications that times required by EU importers. c textiles) have not significantly c textiles) have not significantly rtification required s regarding labelling in the EU: epending on the export destination, declaration although flame retardant (e.g. colour fastness, shrinkage by(e.g. colour fastness,

ylamines (from AZO dyes) in textile dyes) in ylamines (from AZO yers. (See Annex 11.7 for a full list of amines pose a potent ile products that may come into direct ile products that ng will help ng will help colour to remove excess from 5-10% ofcosts. the total home textiles in the EU. Despite EU ade between the EU member states, member ade between the EU exposure areas of hospitality venues) home textile products exported to the home textile products

quirements regarding quality, type of have often formulated and stipulated product name and other consumer ture increasingly be required, accepted trade are often connected through postal he mandatory requirement fo position of the textiles lours, etc. Accurate in g, washing instructions,

consists of care labellin care consists of labelling such as size, brand or information. outbound transportation costs ranges work with certain minimum importers from national importers. Most they this respect, requirements. In minimum quality requirements and make. for materials volume and time required and the rela washing, water absorption, for etc.) free tr harmonisation, which enables individual markets have different re fabric, standards, sizes, co forwarders like DHL, TNT and UPS. D forwarders like DHL, TNT and UPS. There is no official quality standard Retailers and customers in the silk Retailers and customers There are two kinds of requirement mandatory and voluntary. T the fibre content and com links,services and air transportation products marketed in the EU as aryl EU as products in the marketed ce At this moment, there is no specific fu comply internationally will the in and applied, particular by industrial bu available from THTI) home textile tests EU legislation restricts the use of ar restricts the use EU legislation Washing is normally appliedWashing dy to natural applicable to all text This legislation is and prolongedwith human skin. contact home textiles besides an dye safe AZO implement such certification schemes and to soften the texture. This washi the texture. and to soften bleeding. colour effective way to stop but it is not an certification (often required public in and colour testing are some fastness organi for Certification schemes (e.g. impacted Northeastern home textiles but moment, often not requiredmoment, often not for Thai neededEU but might be in the future. • • • Post-production & Exporting Stage Post-production •

• • Production Stage Production 68 Related Institutions & Efforts • • • silkhandcraft marketing of tofarmersin support technical provide T ofAgriculturalExtension. Department Sericulture Institute,DepartmentofAg sector. The Institute has been establ torespondthe the coreorganisation Ministry ofAg The Institute, underthe the followingpageslists The tableon 5.1 Institutions andmightpl Region, the Northeastern in thepast, many institut hasaprosperou Silk productioninThailand RelatedInstitutions &Efforts 5. sericultural promotion are describedasfollows: sericultural promotionare atthefarmer’slevel.country particularly collectively provide corefunctionsto collectively provide The Institute offi comprises5regional to promotehighqualitysilk ofdomestic yarn production increase the 5.1.1 Queen SirikitInstituteofSericulture 5.1.1 institutionsthatprominent arepresently development inThailand. development sericulture topromote inorder development and research Conduct Transfer sericulturaltechnologies areas. cuttings/saplings toservefarmersinthe neighbouring vari Thai-hybrid and Produce Native

ions and private companies are present or engaged in orengaged ions andprivatecompaniesarepresent yarn atcommunitylevel. ed products. TheInstitut ed products. support and promote s andpromote support to fieldofficersand farmers. ished since October, 2005 by combining since October, 2005bycombining ished ay a role as potential partners. ay aroleaspotentialpartners. involved in the Thaisilk in sub-sector. involved riculture and Cooperatives, aims Cooperatives, to riculture and be ces and 21 provincial centres. These ces provincial and21 riculture and Sericulture Sub-division, Sub-division, Sericulture riculture and he mainfunctionoftheInstituteisto to support silkhandcraftedsectorand tosupport raw silk production, processing and processingand rawsilkproduction, The major responsibilities in termof Themajorresponsibilities names and themajor names and overall processes of Thai sericulture of overall processes Thai sericulture eties silkworm eggs and mulberry eties silkworm mulberry eggsand s history. Considering itsrichglory s history.Considering

e’s strategies to are (www.qthaisilk.com) (www.qthaisilk.com) ilk production inthe functions of functions the Related Institutions & Efforts 69

Major Functions Major

cooperate other organisations to with provide required technical support and suitable standard certifications to textile factories. provide industry and information news amongexchange and the members institute’s foreign counterparts. promote SMEs in terms of providing on knowledge SME operation, commercial silk processing techniques, financial linkage, etc promote and provide advice on export procedures develop the overseas silk market provide information about international statistics markets for silk, import-export promote and support villagers to operate community business by developing fromknowledge local wisdom produce and distribute silkwormproduce and distribute eggs provide mulberry cuttings/saplings technologiestransfer sericultural to officers and farmers conduct research and development in order to promote sericulture development promote and support farmers to form cooperatives groups promote and support silk production, promote and support processing and marketing of silk handcrafted products • • • • • • • • • • • • •

in the Thai silk sub-sector Thai silk sub-sector in the Type Government Government Government Government Government Government

Name Thailand Textile Thailand Textile Institute Community Development Department Department of Promotion Export Department of Cooperatives Promotion Department of Industrial Promotion Queen Sirikit Institute of Sericulture including 5 regional offices and 21 provincial Queen Sirikit Sericultural Centres

6 5 4 3 2 1

Table 9: Institutions involved Table 9: 70 Related Institutions & Efforts Table 9:Institutionsinvolved 9 8 7

Centre Technology and Materials National Metal Association Thai Silk Textile Institute Centre, Thailand Textile Testing Name

Government Government Association Type

inthe Thai silksub-sector

• • • • • • competencies strengthening memberorganisations’ by status Enhance competitive government agencies through cooperationwithrelevant promote theproductionandtradeofsilk training workshops, etc. special consultation, developments, & research forproductinnovations material tests,qualityassurance, act asaone-stopcentrethatofferstextile international institutions. andrelated industrial sectors research units,educationalinstitutions, and linkagesbetween collaboration coordinate andfacilitatestrategic fields inrelated human resourcecapabilities and infrastructure develop technological transfer technology engineering including and coordinate researchdevelopment well perform Promote, support, as as

Major Functions

(Continuation)

Related Institutions & Efforts 71 of the Queen Sirikit Institute of of the Queen Sirikit

Figure 23: Administrative Organisation Sericulture 72 Related Institutions & Efforts developing knowledge from localwisdom from toincreasetheirincomes. knowledge developing to to promoteandsupportvillagers of Interiorandisresponsibleforsilk Department Development The Community Community Department Development 5.1.5 statistics. import-export procedures, international advice onexport ofExportPromotionis The Department of ExportPromotion Department 5.1.4 techniques, financiallink SMEoperati on knowledge providing ofIndustrialPromot The Department of IndustrialPromotion Department 5.1.3 linkages tointernational levels. capacity, efficiencyofthe operatio management, business toincrease inorder process learning Cooperative’s alsohelpsstrengthent The department farmerstoformcooperativ and support of Department ofthe The mainfunction of Cooperatives Promotion Department 5.1.2 age, consultancyservic n, and encourage upgrading thebusiness upgrading n, andencourage handcrafted products. Its main duties are Its handcraftedproducts. main dutiesare ion has promoted SMEsintermsof ion haspromoted Cooperatives Promotion is to promote istopromote Promotion Cooperatives operate community businesses by operatecommunitybusinesses e groups to develop their businesses. their develop to e groups responsible to promote and provide responsibletopromoteandprovide he cooperative system, improve the the system,improve he cooperative

on, commercial silk processing on, commercialsilkprocessing is the main department inMinistry is themaindepartment market information on silk and silkand informationon market

e fornewSMEs,etc.

(www.depthai.go.th) (www.cpd.go.th) (www.cpd.go.th) (www.cdd.go.th) (www.cdd.go.th) (www.dip.go.th)

Related Institutions & Efforts 73

at offers a full tation, special a cabinet resolutiona cabinet (www.thaitextile.org) (www.thaitextile.org) (www.thaitextile.org/ttc-lab) volvedof shared the goal

manufacturing country in line with a one-stop centre th and private sectors to formulate a formulate and private to sectors the Textile Industry Division underthe ons of Thailand Textile Institute are: Thailand Textile Institute ons of all textile associations in Thailand, all textile associations focus on the development of the on the development focus sion of Thailand Textile Institute. It is sion of Thailand Textile Institute. material tests, quality assurance, developments, consul and to equip the Thai textile industry atory determined to serving the industry developmentmaster industry with the velopment plan and master amend this upgrade the entire textile industry to , The TTC is equipped with the testing ctor and between the public and private ablished by ablished virtue of for Thailand’s sustained competitiveness

of textiles and garments in Thailand. Established and garments in Thailand. Established of textiles Industry. All parties in Industry. All parties countries

sectors to align Thailand’s textile align Thailand’s sectors to plan, and for an operational plan assigned directives under the master to follow the continuity and efficiency. to coordinate the private se within to brainstorm among the ideas public five-year national industry de textile circumstances, plan to suit evolving of 15th October 1996, at the initiative of 1996, at the initiative of 15th October of Ministry endorsed by the forming an autonomous organisationto Textile Industry potential of the Thai missi market. The three in the global textile

The Textile Testing Centre (TTC) is a divi The Textile Testing Centre (TTC) an independent textile-testing labor manufacturers and exporters in 1999 with the government support from the supervision of Ministry of Industry and equipment. The laboratory is facilities ranging from textile cycle of services, research for product innovation and the market rather than a low-cost one, a value-adding agewith the readiness to enter free-trade under the same developedsystem as in 5.1.7 Centre Textile Testing

enable Thailand to become a quality textile are to The objectives of the institute • • •

5.1.6 Thailand Textile Institute Textile Institute 5.1.6 Thailand The ThailandInstitute was est Textile training workshops, etc. 74 Related Institutions & Efforts international institutions. educational institut research units, .. NationalMetal&MaterialsTechnology Centre 5.1.9 ofquality. improvement among member information and technical • • • • • • clusters,namely; major so asto national centresunderNSTDA, integr and towards aprogram-based oft situation andneeds re in country’s scienceandtechnology policytopushforwar theNSTDA Under coordinate and facilitate to fieldsand inrelated development resource human infrastructure and transfer totheindustrial technology including andengineering development well ascoordinate research, ofMTEC institutions. Theobjectives designfor and including manufacturing materialsscienceandte which supports as a specia (MOST). MTECwasfounded Mi The Agency(NSTDA), Development centresunder one ofthetechnology Metal andMaterialsTechnol The National govern as cooperationwithrelevant undertakings andtradeofsilkthroughsuchjoint theproduction are topromote significant sub-sector, bothlocalandaboar Thai sinceOctober2005when producers es The ThaiSilkAssociationhasbeen ThaiSilk Association 5.1.8 Textile and Chemical Industry Textile and Industry Environmental Energy and Software, Microchipsand Industry Automotive andTransportation Medical andPublicHealthIndustry Industry Food andAgro

he country, MTEC adjusted MTECadjusted he country, strategic collaborationan Electronics Industry ment agencies,exc are to promote, support and perform as perform and support promote, are to ions, industrial sector and related related ions, industrialsectorand the National Science and Technology ScienceandTechnology the National both public and private companies and andprivate both public ative operation among the existing existing the among ative operation sector, to develop technological technological sector,todevelop be in line with the development of the be inlinewiththedevelopmentof chnology research and development, development, research and chnology sponse to the economic andsocialsponse totheeconomic tablished by a group ofleadingsilk tablished byagroup s, and maintenance of standards and standardsand of maintenance s, and d and increase thepotentialof increase d and nistry of Science and Technology ScienceandTechnology nistry of ogy Centre (MTEC) isoperatingas (MTEC) Centre ogy silk began to be recognised as a as a silkbeganrecognised tobe d. The objectives of the association oftheassociation d. Theobjectives l type of government organisation, organisation, of government l type d linkagebetweenvarious (www.thaitextile.org/TSA) its operationalstrategy hange of knowledge ofknowledge hange (www.mtec.or.th) Related Institutions & Efforts 75

ration in the silk

Major Functions Major all of the silk contract farmers in all of the silk contract in production and in the Northeast the level of concent market products through specialized silk by the companyretail stores owned under the brand name of Jim Thompson supply silkworm eggs to the company’s contract farmers produce and supply of bivoltine silk yarn provide a sericulture training (mulberry and cocoons for the production) company’s contract farmers supply silkworm eggs to the company’s contract farmers process (de-gumming and dyeing) yarn purchased from smallholders, weaving, fabric designs and tailoring and printing, in its factories commercial reeling sectorcommercial reeling in Thailand • • • • • •

Type Private company Private company

Name The Thai Silk Co., Ltd. (Jim Thompson) Chul Thai Silk Co., Ltd.

2. 1. Table 10: Private Organisations involved in the Thai silk sub-sector involved in the Thai silk sub-sector Table 10: Private Organisations reeling commercial perceived sector, it is widely that there are two leading theBoth companies have ma companies. representare estimated to 90% over of (NEED, 2006). Notably, they employ almost the Northeast. Although there data to show is no official Sub-sector Thai Silk in the TwoLeading Companies 5.2 Private Organisations 5.2 Private 76 Related Institutions & Efforts began totakeplace. began to difficultieswas able buteventually first15year the companies. During Industries Co.,Ltd,CTSalsocreated income ofover7millionEUR annually. indicatethat the company by provided Thai becomeChul foundation the trained by s and courses coverbothmulberry estimates that farmersha 7,000 over Centre Sericulture Training became a ca organisation establishing anon-profit EUR) toCTS. 180,000 (approximately donatedagrant Finance Company(FMC) Development Netherlands the through DutchGovernment In 1987,the substitute for yarnimpor policies inplaceatthetime,whichencour ofthecom Thedevelopment founded. silkbusiness. turnedtothe company then virusdiseas were affectedbyaserious farminthe tangerine was thelargest was company the thatperiod, During first Thecompanywas Bivoltine yarn. othersilkrelatedbu yarn sectorand SilkCo.,Ltd.(CTS)isthela Chul Thai .. hlTa ikC. t. ChulThai Silk Co.,Ltd. 5.2.1 Co., Ltd., which is part of the Chul Gro Co., Ltd.,whichispartoftheChul between difference isanimportant There associate companies specia ofthegroup specialized silkretailstores; this co business, thatcombinesproductionacti Incontrast, T and dyeing). (silkwormeggsproducti yarn production businesses ispresentedbelow. two ofthe Aconcisedescription market. domestic andinternational assortment of silkproducts(fabri succes Jim Thompson, whichhasbeen ts. During the establishment ts. Duringthe hai SilkCompany isamore cs, garments, and home textiles) on the onthe cs, garments, and hometextiles) mpany has established a successful brand, brand, has establishedasuccessful mpany sinesses. CTS only produces and supplies andsupplies sinesses. CTS only produces find suitable technology and development development and suitabletechnology find s the company experienced continuous continuous experienced s thecompany known as “The Chul Cunvong Farm” and and Farm” Cunvong Chul as “The known ilk cocoon production and the farmers thefarmers ilk cocoonproductionand ve been trained by the foundation. The The foundation. the by trained been ve established as family business in 1936. established asfamilybusinessin1936. rgest Thai company in the Bivoltine silk theBivoltine company in rgest Thai up, specializesinya its contract farmers earn a combined itscontract farmersearnacombined e, whichdisruptedt country. In 1967, the tangerine trees trees tangerine the 1967, country. In This finance support was aimed at at wasaimed Thisfinance support lled Chul Thai Silk Foundation, which lled ChulThaiSilkFoundation, which pany was facilitated by the national national facilitated bythe was pany for farmers. To date, the company Todate,thecompany for farmers. on, training for farmers, de-gumming on, trainingforfarmers,de-gumming In 1968, Chul Thai Silk Co.,Ltd.was ChulThaiSilk In 1968, a joint venture with two Japanese twoJapanese with venture joint a aged domestic silk yarn reeling as a as a domestic silk aged yarn reeling lize inthesupportin the two companies. Chul Thai Silk Silk companies. ChulThai two the vities from contract farming to vities fromcontractfarmingto for theamountof8million Baht Silk contract farmers.Estimates sfully usedtomarketa wide

of the Chul-Thai Agro Agro Chul-Thai ofthe vertically integrated verticallyintegrated rn production, while while production, rn (www.chulthai.com) he production. The The he production. g activitiesfor Related Institutions & Efforts 77

silk production. It and had a further estimated that the estimated that estic production ofestic production ugh specialized silk stinctive quality, coloursstinctive (www.jim-thompson.com) r international Thai silk in the , in silk yarn reeling and related n citizen, established the Thai Silk popularity of silk in international ical integration in ical integration eaving, and printing fabric designs products. It is lk yarn To reeling. ensure diversity, work. In 1962, in recognition of this Foundation that is popularFoundation among that is from smallholders for processing (de- was approximately 1.3 million EUR. was approximately 1.3 million r mark in the 1960s ok where products are sold principally rmers forproduction. cocoon In 2005, that Jim Thompson made a major economy accompanied by a dramatic s Thai house still stands and is now a stands and is now s Thai house still t. Currently the company ownership remaining 49% owned foreigners. by ld in both domestic and export markets. ai Government awarded Jim Thompson iness, and cover iness, and sub- the all aspects of ng to the data provided by the company, cts are marketed thro under the brand name of Jim Thompson. include 5 companies and include foundation one etitors now, but Jim Thompson’s name hompson disappeared under mysterious about 75% of the dom Jim Thompson was honoured are evidence es the export markets. es the export markets. ilk sub-sector, introducing di James Harrison Wilson Thompson, a US bor Co., Ltd. in 1948. It is undisputed 1948. It is Co., Ltd. in contribution to the Thai s and designs, and establishing a reputation fo a reputationand designs, and establishing markets. Major awards with which of the relevance and appreciation of his contribution to Thailand, the Royal Th The Order of the White Elephant. 5.2.2 5.2.2 Thompson) The Thai Silk Co., Ltd. (Jim bivoltine varieties.silk yarns are so Its manag Ltd Chul Inter-Silk Co., activities, and contracts aroundactivities, and contracts 6,000 fa Chul Thai Silk’s yarn represented vert case of successful The company is a and tailoring in its factories. All produ

company employs about 2,200 people directly The business grew over the million-dolla rapid expansion in the 1980s.Accordi in 1967 (the year in which Jim T turnover circumstances), the company’s The annual turnover expanded by 60% in a 5 year period in the mid 1980’s as the company responded to the renewed markets and growth in the domestic increase in the local tourist marke with the Thai nationals comprises 51% supplies silkworm eggs, purchases yarn gumming and dyeing), and undertakes w retail stores owned by the company in Bangk The main retail is located store comp There are many tourists. to Hi remains synonymous with Thai silk. museum run by the Jim Thompson international tourists. one company within the group and is business remains the silk outside involved in growing citrus fruits and fish At present Chul Group has Group to grown Chul At present deeplythat are rooted in silk bus the egg productionsilkworm to si sector from 78 Related Institutions & Efforts • • • ofThaisilksub-sector, strengthening these include: num hasundertakena Thai Government main functionofgovernm Beside the GovernmentInitiatives TakentoPromotetheSilkSub-sector 5.3 Thai, specificsilkwormbr (premium, gold process: production and emblemThe ovalpeacock uses four co green (blends withotherfabrics). (blends green clean. fabrics officialsprefermodern junior byweari basis voluntary policy ona we and socialstatus.Civilservants pl women who andolder middle-aged ministers to set thetrend.However,buyi the reputation ofthefine the reputation to bestowed byHerMajestytheQueen Ministry of Agriculture andCoope qualityemblem for Queen bestows Thai silk control. tolocalcommuni advice providing besttoloca very the by introducing rolein animportant Commerce plays potent havegood and Committee National that village communities in produced of excellence.Itisawardedtoth Departm by the created The OTOPlogo international tradeaswell as particular sub-district a meansof 2001 toidentifyandprom launched in Produc Tambon One OTOP standsfor“One OTOP project bythegover particularly popular, fabrics,espec ofThai The wearing Encourage domesticconsumption more competitive globally whilst protecti more competitiveglobally of quality, peacock emblemisguarantee i ithardto made standardisation had ce been Thai silkhadnotpreviously eeds), blue (Thai silk,al eeds), blue silkproductsfromimit improving incomesofvillagers. ent organisations mentioned above, the above, mentioned ent organisations ties on design, packaging and quality ties ondesign,packagingandquality ose handcrafted items, including silk, handcrafteditems,includingose silk, expanding the country’s domestic and country’sdomestic the expanding re asked to support the government's government's support the askedto re ratives will use a peacock emblem ratives willuseapeacock nment's encouragem reach the standards set by the OTOP OTOP setbythe standards reach the marketing the unique OTOP products products OTOP unique marketing the that are lower in price and easier to easierto and inprice that arelower l and international markets, besides besides markets, international l and ng Thai fabric onFridaysbutmany ng Thaifabric ially silk, has become increasingly ially silk,has becomeincreasingly ace importance on ace importance ng silk farmers fromexploitation. ent of Export Promotion is a symbol isasymbol ent ofExportPromotion dentify and maintain quality. The quality.The maintain dentify and authenticate Thai silk and protect authenticateThaisilkandprotect traditional methods), silver (classic methods),silver traditional ng silkisstilllimited to thewell-off, lours indicating specific silk types lours indicatingspecificsilk types ber of initiatives to support and initiativestosupportand ber of ote unique products made by a a madeby products ote unique and assists in making Thai silk silk assistsinmakingThai and rtified officially. Thislackof ial for export. The Ministry of Ministryof export.The ial for t”. The government initiative initiative t”. Thegovernment

ation ones. The quality of ation ones.Thequalityof lows chemical dyes) and and lows chemicaldyes) ent ofcabinet ent

elegant clothes clothes elegant Related Institutions & Efforts 79

style of Thai silk that is th no specific production th no specific production the type of Thai silk that is of Thai silk that is the type pure silk yarn is the main silk must be produced by izontally, using indigenous horizontally on any kind of hemical dyes can be used,

is used in this kind of silk, ical dye can be used.The spun methods on traditional Thailand exclusively. be environmentally friendly. abrics, no specific production specific production abrics, no worm breeds, hand-madeworm breeds, dye can The silk be used. ilkworm breeds, hand-madeilkworm "Thai Silk Blend" "Thai Silk "Classic Thai Silk" "Royal Thai Silk" Thai "Royal "Thai Silk" an be used, but the latter must be for for for for – is silk blended with othersilk blended f – is method. For this kind of silk, must be produced in Thailand. Blue Peacock produced in Thailand. silk must be Green Peacock component, supplemented by other fibres as a secondary raw material. Any kind of loom can be used but details of fibre componentsmust be clearly identified. Either natural or chemical Silver Peacock threads,– uses purewi silk which is woven vertically and loom. Either natural or chem Gold Peacock native– uses Thai s production. to The term refers method. Only pure silk yarn hand-woven andvertically hor hand spun on traditional handlooms. natural or Either chemical dyes c environmentally friendly. The Thailand exclusively. – uses developed silk production. This refers to the hand-woven vertically and horizontally using either indigenous or adaptive hand handlooms. Either natural or c but again, the latter must be producedmust in The silk Figure 24: Peacock Emblems used for different Thai silk qualities 80 Value Chain Analysis (Source: Stakeholder interviews and Analysis by the Survey Team, 2007) Team, Survey by andAnalysis interviews the (Source: Stakeholder Table 11: Generated Valueinthe Table 11:Generated Export SilkHome TextilesChain 10. Valueadditionateachstagecanbeim retailers isapproximately 350% for foreign 9. Valueadded 65% isapproximately for exporters 8. Valueadded 65% isapproximately producers for hometextile 7. Valueadded 380% isapproximately weavers for handloom 6. Valueadded 50% isapproximately anddyers for reelers 5. Valueadded 30% isapproximately for rearers 4. Valueadded 3. Valueadditionisnotnecessarily represent 2. Valueadditioniscalculated fora 1. Valueadditioniscalculated basedonone Remarks: tabl added twovalue Consequently, goi splitsforproducts chain The value Analysis ValueChain 6. inputs and the impact on yield. impacton inputsandthe amountandeffective highlydepend on are 11. Rearers EUR50 Foreign Retailers Exporters (FOB) Producers Home Textile Handloom Weavers Reelers and Dyers Rearers

special designtable linenwill t sell against for EUR200 Chain Actors

Cost simple silk home textile supply chain simple silkhome textilesupply 868 526 319 84 56 43

Sales

square metre of high-end silkfabric ofhigh-end metre square ative for all home textile productsvalue chains forallhometextile ative proved by design, style, tactic, expertise, brand e.g. a a style, brande.g. by design, tactic,expertise, proved es were prepared asfollows: es wereprepared 3038 868 526 319 84 56

ng to export and domestic domestic market. export and ng to use oflabour(paidor

Added

Value he same quality withhe samequality selling simpledesign at 2170 342 207 235 28 13

Value Added alongthe Retailer Include 72.45% 11.43% 6.92% 7.84% 0.93% 0.43% family) andchemical family) chain (%)

Exclude Retailer

41.49% 25.10% 28.46% 3.39% 1.56%

-

Value Chain Analysis 81 ch of the value eachch of the value of the domestic ). Foreign ). Foreign retailers were not integrated

me textiles, while handloomme textiles, weavers, branches of the same companies, this ers contribute 28%, 25% and 28%, 25% ers contribute 41% ount that home textile producers and on of 67% of the valueon of 67% added. of Photo 31: Silk Fabric Shop (Source: Stakeholder the interviews and Analysis by Survey Team, 2007) Figure 25: Percent Value Added in the Export Silk Home Textiles Chain Export in the Figure 25: Percent Value Added Expressed inExpressed a pie chart, reelers rearers, and dyers add less 5% than per square metre value of the for silk ho home textile producers export and foreign (excludingrespectively retailers in order how to more clearly show mu Taking into actors is retaining. acc exporters are in many different cases group porti controls a majority 82 Value Chain Analysis inputs and the impact on yield. impacton inputsandthe 11. Rearers are highly depend on amount and effective amountandeffective highlydepend on are 11. Rearers by 10. Valueadditionateachstagecanbeimproved 80% for retailersisapproximately 9. Valueadded 30% wholesalersfor isapproximately 8. Valueadded 30% isapproximately producers for hometextile 7. Valueadded 280% isapproximately weavers for handloom 6. Valueadded 30% isapproximately anddyers for reelers 5. Valueadded 30% is approximately for rearers 4. Valueadded 3. Valueadditionisnotnecessarily represent 2. Valueadditioniscalculated fora 1. Valueadditioniscalculated based Remarks: Retailers Wholesalers Home Textile Producers Handloom Weavers Reelers and Dyers Rearers (Source: Stakeholder interviews and Analysis by the Survey Team, 2007) Team, Survey by andAnalysis interviews the (Source: Stakeholder ValueintheDomesticTable 12:Generated Silk HomeTextilesChain Chain Actors

Cost simple silk home textile supply chain simple silkhome textilesupply 344 265 204 on one square metre ofsilkfabric metre on onesquare 73 56 43

ative for all home textile productsvaluechains forallhometextile ative Sales 619 344 265 204 73 56 design, style, tactic, expertise,brandetc. design, style,

use oflabour(paidor Added Value 275 131 17 13 79 61

Value Added along family) andchemical family) the chain (%) 47.75% 13.78% 10.60% 22.74% 2.90% 2.23%

Value Chain Analysis 83

ng shares of the value generatedin s, producers of domestic home silk of the value added. Retailers control a added in the domestic market. (Source: Stakeholder interviews and the Survey(Source: Stakeholder interviews Analysis by Team, 2007) Photo 32: Silk Bolts in Jim Thompson Shop, Bangkok Shop, Thompson Photo 32: Silk Bolts in Jim The following control actors the followi from productionthe chain to retail consumption: Figure 26: Percent Value Added in the Domestic Silk Home Textiles Domestic Silk Home in the Figure 26: Percent Value Added Chain Compared to export silk home textile textiles control a smaller portion (11% a smaller portion textiles control majority portion of 48% of the value added. Wholesalers and retailers make up more than 60% of the value 84 Competitive Advantages & Sector Strategies in Thailand General Review 7.1 &SectorStrategy CompetitiveAdvantages 7. products. Hence,theincrproducts. home textile to produce inorder localavailableinputs buy invariably small-scaleproducerswho are inNortheasternThailand textile producers This power. high bargaining moderately industry, includingyarns, The supply increase This ispartiallyduetoan switching cost for substituteproducts high levelofcompetition Due tothe may switchto substitutes whichlook that ofsilkand areeasierto care for. and more refined New chemicalfibresare different regionsareunique.Thethreat onconsumer depends buyers doesnotrequirehigh textile production barrierstoentryinthe There arelow provide good quality and design qualityand good provide to areable buyers general, demand. In typebutma come fromotherproduct amounts of capital. Producers ex have systematically capitalized. powerwo initiatives, their bargaining suppliers havestrongpower.Ifpr needinput Asproducers home textiles. costs against thedownw rising production easing inputcostsforce pr preferences. Silk preferences. home at thelowestprices. in domestic production along withsteady in domesticproductionalong alikebutwherecostislower. inly from other production areas. fromotherproduction inly uld increase however has not yet been hasnotyetbeen increasehowever uld Therefore, consumers of silk products Therefore,consumersofsilkproducts , buyershavepowertodictateprices. in domestic markets and also the low in domesticmarketsandalsothelow sector for a Home number ofreasons. oducers adopt collective purchasing oducers adoptcollectivepurchasing fabricsandotheraccessories,has investment, the bargaining power of power investment, thebargaining s and buy them in small amounts, theminsmallamounts, s andbuy of substitution,t pressed their conc source home textile products thatproducts textile source home similar in terms of look and feel as similar intermsoflookandfeelas is because themajorityofhome ard trend in the market price of market priceof trendinthe ard oducers to oducers usegreater textile productsfrom textile herefore, does not herefore, doesnot erns regarding erns regarding Competitive Advantages & Sector Strategies 85 product, differently 1 - 2 metres of fabric in one day 1 - 2 metres of ysis of cost and efficiency reveals oom weaving is viable only if the oductivity factor has played an looms is more than 5 times that of a of more than 5 that times looms is 2 – 3 square metres per day (8-hour2 – 3 square heless the lowest in comparison with in comparison heless the lowest looms. In handlooms labour cost In handlooms looms. labour cost ed on the two types of looms. The type product as a distinct product as a ciency of handlooms and power looms,

abric production handlooms from to power Photo 33: Power Loom (8-hour and one shift) weaver operate is required to a loom. terms of In the production is around square metres, of fabric on powershift). The production handloom and weaver instead of one handling one weaver machine, one can manage four power looms. Power LoomHandloom & The productivity handlooms of is nevert other weaving technologies. The pr in the f instrumental role shift of looms. On average, handloom a produces to industrial textiles (power loom weaving)to industrial and charge a premium on the average market price. that the commercial operation of handl that the producer is able to effectively market similar fabric is assumed to be produc similar fabric is assumed and warp yarnsYarn dyeing, the weft and are dyed. is 100% silk of yarn used For for the two types of technology. sizing and warping costs are similar power looms, the labour costs for one weaver and one fitter, are typically four power distributed equally across involves only one weaver. The simple anal To compare the productivity and effi 86 Competitive Advantages & Sector Strategies beneficial tothesustainabilityofsub-sector. sector, itisunlikelythat such r resultinsignificantreturns torearers numbersofthemleavingthesub- competitive.Giventhe internationally yarn makingpolyvoltine before by56% costs; needtobereduced costs,wh notedthat labour Bank (2006) against importedChines particularly ar thepolyvoltineyarns In Thailand, Polyvoltine and Poly-bivoltine and Bivoltine Silk Yarn Photo 34:MachineWindingof Pirogues eductions in costswouldbeultimately e and Vietnamese yarns. The World TheWorld e andVietnameseyarns. fact that small reductionsinwage e not competitive internationally, e notcompetitiveinternationally, ich represent themajorityintotal ich represent

Competitive Advantages & Sector Strategies 87 chain, reduction in cost is for reeling, cost is l for Thai products and Vietnamese silk silk yarn and should aim ent chains; for example, traditional hand woven traditional hand silk ices of Thai silk yarns to compete yarns to compete Thai silk ices of or from polyvoltine to poly-bivoltine or from polyvoltine for the polyvoltine varieties; it is for the of the costs along the chain, but the but the along the chain, costs of the but it is essentia but of the polyvoltine the polyvoltine productionthe polyvoltine can do to voltine and bivoltine yarns are not order for the production to become nese and Vietnamese yarns. As a cated that labour costs would have to characteristics, which make the sub- make the which characteristics, ltine yarns should perhaps accept that ltine production would have negative d go someway to achieving this goal. this goal. to achieving d go someway hailand to increase quality and capture ports of Chinese he major labour cost is for cocoon for cocoon he major labour cost is on the appeal of hand woven traditional are used to make highquality fabrics yield and improvingyield and production systems to the bottom with a corresponding to the bottom with loss this regard. Also, a change in production change in production Also, a this regard. ility of the two yarns. abric. Rather than trying to compete on price (a to compete than trying abric. Rather the market that values varies between the differ competitiveness study for the poly-bivoltine andcompetitiveness duction chain, the major labour changes is underlying cost structure would achievechanges cost structure is underlying price against mass-produced while in the poly-bivoltine chain, t while in the poly-bivoltine chain, production. The World Bank (2006) indi reduce by 66 and 62% respectively in competitive internationally. Like the case wages for the poly-bivoltine and bivo the sustainab for implications in the bivoltine yarn pro Possibilities for niche marketingPossibilities do exist The implication of the yarn. Labourform the majority also costs labour cost of composition bivoltine production are similar to that substantial unlikely that Chicompetitiveness against imported result, rather than trying to reduce the pr against imports, it may be better for T the high value segment of the market. Like the polyvoltine yarns,the poly-bi internationally competitive against im to be well differentiated, correctly labelled and well branded. for high valued niche markets tradingfor high valued markets niche silk products. production runs the risk of losing the production the risk of losing runs Polyvoltine yarns sector what it is. appealing the segment of to improve competitiveness. Increasing Increasing competitiveness.improve in investigate are important areas to from polyvoltine poly-bivoltine woul to However, changing the Thai silk sub-sect f above mass-produced silk involveslosing strategy which a race in quality), the producersThai polyvo of they cannot compete on The question then remains as to what to what then remainsThe question as 88 Competitive Advantages & Sector Strategies • • • Product Identification • Inputs/Materials Supply Sector (Source: Stakeholder interviews and Analysis by the Survey Team, 2007) Team, Survey by andAnalysis interviews the (Source: Stakeholder Table 13:IssuestobeaddressedintheThaiHomeTextilesSub-sector • • • • due totheseissues. beingunreliableinpart the industryas namein producers maydevelopabad be guaranteed; dates cannot orders)asdelivery (especially large orders is amajorhurdletoaccepting materials The unreliablesupplyofraw development needs Improved understandingoffuture research needs Focused understandingoffuture access strategy long-term planningandforeignmarket Improved abilitytodevelopinformed markets Increased understandingofforeign to specific high opportunityproducts. to specifichigh updated research(seasonally)relating Producers would like continually preferences. exportrequirements and market withand producetheminaccordance local producerstodevelopproducts to andfeedback constructive criticism toencourage mechanisms/channels There areinadequatefeedback buyers. interestfromindividual on thebasisof adhoc products forexports hasbeen of To date,muchoftheidentification

Sales/Pricing • • Producers • • • Market Identification •

markets Increased abilitytoaccessforeign markets andmarketneeds Increased understandingofforeign product-market combinations. product-market combinations. most appropriate identifying the support tothemajorityofsectorin provide available tocoherently iscurrently Insufficient capacity and isnotalwaysup-to-date. in aneasilydigestibleformatcurrently, information, butthisisnotnecessarily hold somemarket Support structures industry members. rather thanbeingwidelyavailableto primarily usedforinternalpurposes is base,and their specificclient tendedtofocuson houses, thishas be heldbytradingagents/trading informationmay While somemarket markets. products ininternational oftheir not understandingthevalue exacerbatedby them which isfurther fortheirproducts, optimal pricing Many producersstruggletofindthe

Competitive Advantages & Sector Strategies 89

No coordinated effort to establish a single representative to promote/ market a number of producers and their products to minimize cost, whilst sharing exposure and feedback. There are high quality designs and stylist talent in Thailand, but this is matched successfullynot always with appropriate producers. Often the approach to style design has been over-simplified, focussing on “ethnic” design, rather than finding a fresh, differentiated style that may or may not have an essentially “Thai” feel. Greater resources need to be put exposuretowards to and interpretation of international trends Lack of dedicated and coordinated effort or a campaign to market the local industry both nationally and internationally. Local producers are not branded and their products are not distinguishable from others in the Thai market. Market research and product Market research and limited. development is very No forum for feedback, is which required to drive product development. on trends for both Lack of information and emergingexisting producers. Lack of exposure to international design and fashion trends. A move toward producing high volumes can result in a lack of creativity and innovative product development focus as the commercial becomes the producers priority and focus on meeting immediate orders. • • • • • Marketing Industry • • • • Design Application, Trends Analysis Analysis Trends Design Application, R&D and other • •

(Source: Stakeholder interviews and the by interviews (Source: Stakeholder Analysis SurveyTeam, 2007)

Many producers are unaware of the quality requirements in particular markets. export Many emerging producers are unsure abilityof their own to deliver large volumes as a result of various production related issues and are therefore reluctant to commit to supplying very large orders. Orders are not regular and it is therefore unsustainable to maintain fully-fledged production lines, resulting in significant contract (non permanent) employment. Many within the industry do not have the capital to fund marketing initiatives. of the product is key Texture to the purchasing decision, is therefore and being able to “touch and feel” the product is a vital part of marketing. Producers have little or no marketing andexperience quickly lose interest after unsuccessful marketing attempts. Producers do on an individualwho basis, or have to, market attempted their products in foreign markets have found it to be very expensive (e.g. cost associated of producing and shipping samples). However, some producers feel that direct experience is still the best to understand way the to it. market and be exposed Producers are often so caughtProducers are often up in the cycle of “produce and sell” that they do not have time to conduct marketing research producersVery few are able to promotional produce their own material In general, producers have aIn general, producers lack of business and marketing skills Table 13: Issues to be addressed in the Thai Home Textiles Sub-sector Thai Home Textiles in the Issues to be addressed Table 13: (Continuation) • • Production Production • • • • • • • • Marketing Marketing 90 Competitive Advantages & Sector Strategies (Continuation) Table 13:IssuestobeaddressedintheThaiHomeTextilesSub-sector • • Export-Specific Support opportunities. opportunities. exportdon’t explore market many differentresultsandtherefore with process extremely intensive an as Producers view exporting international buyers. by and qualitydemanded guarantee thevolumes necessary to productioncapacity organisation of local producersfallshortintheir the problem;rather Product isnot (Source: Stakeholder interviews and Analysis by the Survey Team, 2007) 2007) Team, Survey Analysis(Source: Stakeholderinterviews by the and

• • • Exporters obligations to salariedworkers. enterprises thatdonotresultin setting themupin“outsourced” production and/ortrainingpeopleand addressed thisthroughcollaborative orders. Someproducershavepartly export producers turningdown potential of insomecases this hasresulted required tomeetanorder.Inthepast, is that maydevelopifexpansion workforce toa the ongoingobligations and orders, constraints, unpredictable cashflow production, particularlygiven upthevolumeof difficulties inramping theremaybesignificant In somecases, andon-timedelivery. volume, quality exporting, of to successful interms asahurdle acknowledged production is consistencyof and Reliability purchasing criteria. beingimportant dimensional look decision, with texture and 3- touch andfeeltomaketheirpurchasing sector tendtorelyon Buyers inthe

Competitive Advantages & Sector Strategies 91 that they have l, product design l, product various exporters, ured a constant et is a difficult one for segment of the market. silk enterprises, such as Jimenterprises, such as silk tern home textile sector is still kes it difficult for Thai exporters to kes it difficult for Thai ts are ample; buyers have a number as China and India in competitive. Thailand is a mid-level competitive. Thailand is a mid-level e the existence of e the existence (including EU) trends and issues, trends and issues, (including EU) or does not have a clear strategic strategic clear have a not or does ng in these countries (due to low ng countries in these t and short-term profit maximization as gence, quality contro e countries has ens countries has e iland however, is still following in terms still iland however, is ice. The availability of high quality, ice. The availability of high quality, difficult for producers from other will have to distinguish themselves and/ will have to distinguish themselves the high costs of shipping, combined the high costs desire to undertake collaboration outsidedesire to undertake low-end segment. The South Asian policy is also lacking. In terms of marketing In policy is also lacking. -sized exporters, is limited. -sized exporters, is w-end segment of the mark dominate the ‘low to mid’

The extremelymanufacturi of low cost labour and makes it materials costs) with them on pr compete countries to thes produced textiles in domestically supply at minimal cost. to compete in due Thai exporters to with Thailand’s costs. This ma production be price competitive. countries, such as India as countries, such The price competitive, lo Low to Mid-end Segment Segment Low Mid-end to China dominate the Products from they are fragmented, with self-interes a prevailing behaviour. Well performing from. Suppliers select of choices to or create new markets in order to stay challenger to the industry leaders such Worldwide of handloom supplies produc Thompson, are self reliant with no Thompson, are self Cleartheir own spheres. public (and branding) in particular, the Northeas 7.2 Competitive Analysis Analysis 7.2 Competitive sect The Northeastern home textile direction or marketing strategy. Despit of internationalweak. Awareness particularly beyond medium the significant share in EU markets. Tha significant share in EU market intelli of production systems, and innovation. 92 Competitive Advantages & Sector Strategies Photo 35:SilkCloth market, with unit pricesreachi t France exports apparel. used for been silk 70% ofthe morethan Traditionally, fabrics ofthe highestqualityfordom dominatethehigh-end Italy andFrance High-end Segment packaging. ondesign,materials, high demands segment becauseofthe focus onEur Both thehigh andthelowsegmentare of number the largest,withlargest existineachofthese Opportunities This of Lyon. thecity located around the case in Italy, theindustryin Fr withaconsider France isanothercountry products producedinEur silk productsinEurope. of exporter producer,aswellimporterand thelargest Italy hasbeentraditionally about 1billionEURperyear. ties andshawls).Thisproductionfors silk products,(materialsforclothing, processing inItaly.InComo,theannual located closetoMilan–covering is highlyclustered ina single industria prin silk processing(finishing,dyeingand Italy and France have successfully branded their products. theirproducts. branded havesuccessfully Italy andFrance products, ofthehigh-end key component

ope andiswell knownfor ng 20 EUR per square meter. ng 20EURpersquare ance is geographically concentratedance isgeographically andis upholstery, decoratingfabrics, scarves, gments. Themiddles shops and fastestmovingcollections. shopsand opean brands and products, and very andvery andproducts, brands opean almost 80% of silk production and almost 80%ofsilkproductionand ilk products generates export value of value ilk productsgeneratesexport l district, thecityofComo– around segment ofthema Italy produces 91% of all the silk 91%ofallthe Italy produces estic forexport. consumption and industrialdistrict fabrics in the French market have markethave fabrics intheFrench production totals 3,200 tons of the totals3,200tonsofthe production workmanship, quality control and workmanship, quality controland ting silkfabrics).Processingof able silkprocessing op quality silkfabricstotheUS op quality more difficult to enter: thehigh as itpromotes exclusivity.Both highly developed skills in highly developed isproducingsilk rket. Branding is a a rket. Brandingis egment is by far egment isbyfar industry. Asis Competitive Advantages & Sector Strategies 93 the brand image et indicate that most most that et indicate in this sector. The sector. in this ant as these are the to be able in the low end to compete brand names and designer labels, or demand, facilitate ub-sector has weathered competition e need themselves in the to position um to high end market requirementsum to high end ndia and Vietnam. All of them seem to seem ndia and Vietnam. All of them well known as exporters of silk home must be conducive to innovation and conducive must be ts. So, product design, development and

own brand/private label goods. e essential for survival ice trends in the EU mark the EU in ice trends become even more import Photo 36: Silk Fabric Excellent design application Excellent design Branding – much of the high-end for home textiles in the market mainstream retailers is dependingon Quality of materials Quality of materials Quality of workmanship Reliability of supply acceptance as a supplier of The market for home textiles – Silk s The market for home textiles – Silk from lower cost countries. Countries China, I to EU markets include textiles of Thai home textiles. be the main competitors Thai home textileThai home producersare unlikely therefor Thai exporters of the market. to highmedium endthe of in market order to be to competeable and make exporting worthwhile. Generally, medi include: • • • • •

As mentioned the pr before, As Goodwill and consistency ar Goodwill and consistency competition faced within this sector within this faced competition creativity with regard to silk produc constant improvement parameters that determine the market and generate higher profit margin. 94 Competitive Advantages & Sector Strategies Thailand, and Malaysia. Thailand, and home textileproductsto Chinafrom pressure and isnotnecessarilysustainable.pressure and Therear for domestic entrepreneurships. massiveflowscreativity and offoreign andlic counterfeiting towards copying, fr cultural/ethnic productsareexported classified asalargescaleandhighqua China, anindustrialized country focus textilearticle. anyhome virtually produce haveefficientmanagem considered to investment (FDI)infacilities and highlyprice textile industrytoremain raw mate with accesstoindigenous a huge supplyofinexpensivelabour t countryduring thananyother equipment Summary Competitors of 7.3 removed. Several retailers indicatedt removed. Severalretailers quot forwhich products markedly in thatChina’ssharereveals Trade data countries. andEUhas China created oppor between likebed,table, home textiles, theEUandChina between agreement growth ofChinesetextileexports from Chinaledtoa inwhicha newagreement, limitation wasplacedonthe thefirst certain developmentsduring m the textilesectorwereeliminatedas incr an 2005: 16%in toabout in 2003 fromChinatoEUmark home textiles affecting worldtradeinhome textiles The developmentofChi na’s hometextileexportindustrywillbeakeyissue invested in more spinning and weaving invested inmore weaving spinning and ofhome textiles. Chinahas and exporter China isalsothewo revenues of about 982 toworld exports theEU)withexport market forhome textile the EU sharein leadingmarket held a China China bathroom and kitchen linen.Thisquota bathroom andkitchen toEU until2008(CBI,2006).This ets increased strongly; from about 10% ets increasedstrongly;fromabout10% of 1 January 2005. However, due to due of1 However, January 2005. nd skilled sewing machinists, coupled nd skilledsewingmachinists, rials, has enabled the Chinese home Chinese home rials, hasenabledthe in the coming decade.Totalimports of hat theyhaveshift ease ofabout60 to 70%. All quotasin investments have become a substitute asubstitute investments havebecome technologies. Theindustryalso is technologies. such countriesasIndia, Philippines, ed onspecialistmass competitive and attract foreign direct competitive andattractforeigndirect om China. The prevailing orientation orientation The prevailing om China. ensing weakensthe ent and the technical know-how to technicalknow-how ent andthe a restrictions have already been been already a restrictionshave onth of 2005 regarding EUimports regarding onth of2005 e however signs thatChina isunder e however lity factoryproducer.Minimallocal of theEUmarket has increased covers several product groups of severalproduct covers he last 5 years. Moreover, China’s China’s he last5years.Moreover, tunities for other developing forothertunities developing rld’s largestproducer products(16%of the million EURin 2005. ed sourcing of their development of development production, is production, Competitive Advantages & Sector Strategies 95 tion of raw silk otion of Chinese has not identified has not identified packaged as part pabilities, production pabilities, production cs of Thailand and India, management and product imperial courts in China even its foreign counterparts including its ter of raw for 90% silk, accounting other overseas other overseas regions. But, still international prices. This scenario rthplace of the produc textile institutes to develop textile institutes more ts expected to increase from about 1 any home famous textile brands in was so treasured that it became a treasured that it became so was sector’s exports. Sometimes, China- Sometimes, sector’s exports. ndian home textile handcrafts are in ics for ceremonial use and for gifts to use and for gifts for ceremonial ics home textiles, China home textiles, share worldwide in the home textiles share worldwide in the home w domestic silks and e textiles industry has been undergoing textiles industry e brands and poor prom he lack of fine designers in the home in the designers of fine he lack ofile of China’s silk products. capacity, quality capacity, quality India India produces exports an impressive and range of home textile products and has a wide product ca range of development skills. India held about 10% share in the EU market with export revenues manufacturers are also manufacturers are attempting to set up The stylish silk fabri Vietnam also pose a great threat to China’s silk threat to China’s silk great a Vietnam also pose 4 billion EUR by 2010. ed designers. share of global exports. China was the bi share of global exports. and silk weaving. The fibre produced measure of currency and reward. The silk fabr established factories to weave foreign powers. is being challengedtrade by China’s silk India, Vietnam and Thailand. With the changing productionWith the changing China has pattern over time, as the emerged world's largest (90%) producer and expor

Besides large turnover and exports in large turnover Besides and the low-priced silk of raw trade. The lack of well developed silk silk products has also hampered the silk products has also hampered made from ra made silk products are of Italian brands,sold which are then at has done little to help raise the pr itself with itself with production the or branding of to t This is due global market. the domestic by many aggressive approach field and less textiles textile compared manufacturers especially with market is trying to increase its China segment. The Chinese domestic hom Additionally, great changes. relationships with close co-operative capable and specializ of about 614 million EUR in 2005. I 2005. EUR in of about 614 million demand globally, with home textile expor billion EUR in 2006 to about 96 Competitive Advantages & Sector Strategies handloom products drivesra products handloom fortraditional demand and Muga.Growing allthecommercially knownvariet producing distinctionof India hastheunique exceeds supply, greatly local demand of now thesecondlargestproducer(13%) India hasbecomethelargest in rawsilk India istheworldleader markets. improving theacceptability improving increasingabsorpti skilled manpower, Acombination producers. of regional fa to Indianproducts.In turnthisresulted feat value-added andother programmes, Visibleeffortsinquality and quality. Chinese competitors. Indi areshiftingtohigher-v Indian traders necessarily influenceinvest Poor infrastructurewascitedasa conc firmsasinnovat Indian retailers described the sector’s ability tomanufacture a force, labour low-cost large, relatively thatIndiac suppliers acknowledge alternative sourceofsupplytoChin andcanstrategizecorrespondingl buyers can better extent. Indiancompanies shouldleve in China.Indianproducers craftsmen is Indianindustr higher inthe In manyrespects,the workmanship products such ashandembroidery. capacity toproviderelativelylabou With itslargesupplyofrelativelylo is betterthanIndia’s. markets especially theUK. Neverthel markets, European the countryisathr market.Besidefactor international India oneofthemostthreatening seve thereare with Thailand, Compared an products are more focused towards innovation innovation aremorefocused towards an products ment andsourcingdecisions. of the Indiansilkhomete w silkdemandinIndia. importer ofrawsilk,despite r-intensive embellishment r-intensive wide rangeofhome textile products. EU a forfabrics a and textiles.Retailers imports, holding a 33% market share. imports,holdinga33% improvement, innovations through R&D R&D improvement, innovationsthrough an remaincompetitivebecauseofits a large domestic supply of fabrics,and supply domestic alarge s mentioned above, particularly for for particularly s mentionedabove, ess, Thailand’s inbound transportation ess, Thailand’sinboundtransportation w-cost labour,Indiais known forits eat due to a good relationship with EU with EU goodrelationship eat duetoa being theonlycountry in theworld and levelofeducation of the Indian rage this apparent gap to the greatest to thegreatest thisapparent gap rage in higher profits as compared tootherin higherprofitsascompared recognized the requirements ofthe therequirements recognized ctors such as low cost of production, y in comparison to their counterparts y incomparisontotheircounterparts which limits export growth potential. potential. which limitsexportgrowth alued products in comparison with in comparison with products alued on of world class technology is world classtechnology on of competitors forThailandinthe ures bring a whole new dimension new dimension awhole ures bring ive, particularly in design functions. indesign ive, particularly ern, butnotasafactor thatwill raw silkafterChina(70%). In India ral favourable factorsthatmakeral favourable y. India is regarded asamajor y. Indiaisregarded ies of silk -Mulberry, Tasar,Eri, silk fabrics and exports of xtile productsin theEU the fact thatitis s to hometextile Competitive Advantages & Sector Strategies 97 ant factor in the ant factor in the oducts than India, because of its cost because of its cost entry into the into entry of domestic raw silk in of domestic raw e textile products in EU in EU e textile products approximately the EU 1% share in of home textile pr e to compete in terms of volume and in terms e to compete is expected to continue to steadily continue to is expected to will have to pay serious attention to capture the market raw silk (9%) after China and India.raw silk (9%) after ountries like China, India China, ountries like and to some tages is given on the next page in e been ain the past. problem of about 60 million EUR in 2005. of about 60 million Vietnam Vietnam Several informants this study expressedfor about Vietnam’s concern marketplace. Reliable statistics are difficult to to marketplace. Reliable difficult statistics are find in order verify the to current production availability situation. The an import Vietnam has been developmentis sector: it silk home textile of its nam has emerged as a major player in the world itive supplier of silk hom itive supplier of silk but is considered a compet but is 2005, Vietnam held aboutIn markets. export revenues market with the world’s third-largest producer of Vietnam provides a more limited range A summary of main competitive advanof A summary Table 14.

a competitive position to Vietnam is in advantagetradition. Viet and the last decade and over silk market increase and be a potential threat to c abl be extent to Thailand. Vietnam would price in EU markets. However, Vietnam quality control issues that hav 98 Competitive Advantages & Sector Strategies Vietnam India China Competitor textiles for Thailand and other keycom textiles forThailandand of Initial benchmarksandafullexplanation (Source: Resource people interviews and review of CBI and THTI data by the Survey Team, 2007) 2007) Team, Survey databy the THTI of CBIand review peopleinterviews and (Source: Resource ofThailandversus advantages Competitors keyTable 14:Competitive Key

Better standards Smoother logistics logistics Smoother inbound quota EU-China textile Growing handicrafttradetrend suppliers EU may want to diversify logistics Smoother inbound Thai Advantages

petitors are provided in Annex 11.2. inAnnex11.2. petitors areprovided

thescoring system of silkhome Interested investors cheap labour Availability of Big marketshare Cheaper prices Higher volume More consistent laboursupply More consistent Cheaper prices Higher volume Higher technology Design expertise theUKmarket with Relations cheap labour Availability of Big marketshare Cheaper prices Higher volume Higher technology Competitor Advantages

Competitive Advantages & Sector Strategies 99 med at maintaining andmaintaining med at on and governance along ination of value chain linkages, ing. Based on the analysisof crease productivity, but rather to productivity, but rather crease agewould efficient and come from the silk sub-sector. It is not just a a not just sub-sector. It is silk the rviews and holding discussions), the the and holding discussions), rviews the Northeastern home textiles were m Thompson, Shinawatra, Anita, Silk along the marketing chain, ze that innovati ze that world handloom silk trade, trade, world handloom silk silk sector in Northeastern Thailand in Northeastern are how: sector silk ements of any strategy ai any ements of rtheastern rtheastern textilehome producers and exporters, increase returns to stakeholders costs, lower improve productivity, and increase value added. to improve its position in the in to improve its position increase the returns to the products being sold. increase the returns to the products being ultimately increasing the profitability of ultimately increasing the profitability in costs and to reduce matter of trying advant Creating a sustainable competitive Part of the challenge is to recogni the value chain are key el comb sustainable production systems, the better supply chain management, accompanied by a focus on niche products,improved design and market secondary information, (conducting inte for following competitive strategies identified. • • • • Avenue do not vision have a clear, shared or strategy for the sector. The major challenges to the • 7.4 Competitive Strategy Strategy 7.4 Competitive before, NoAs mentioned Ji big players, i.e. not including the 100 Competitive Advantages & Sector Strategies (Sources: Stakeholder interviews &Analysis interviews (Sources: Stakeholder by Interventions, Importance ofStrategicTargets Table 15:NortheasternSilkhome • • • • Cost Reduction Medium-term relevant Quality Improvement Relevant Product Innovation /Upgrading Very Relevant market. silk,fair includes non-mulberry Market developmentisalsoimport consistentsupplies.and ensure systemscouldin Improving production asolidreputation. (e.g. design)inordertobuild The sectorwillneedtoupgradeits design, technique andpresent unique products; friendly environmentally it handmade enforcing itsreputationfor its(currentup loyaltyamongst andfutu To increaseits EU market share,No at the same time selling at reasonable prices. at thesametimesellingreasonable

ation; consistentan

• • • • • • • • • • Survey Team, 2007 and Validation workshop, 2007) andValidationworkshop, 2007) Team, 2007 Survey textiles: Industry Strategies& trade, organic and natural dyed niche dyed niche trade, organicandnatural adherence to standards and quality adherencetostandardsand Improve cost-efficiencyoflogistics solutions Appropriate technology Improve productionefficiencies chain standard alongthevalue Define quality Increase productivity Improve weaving technique Improve qualityofraw material innovation Enable design products Incubate new Research trends&opportunities rtheastern home textiles should build textiles rtheastern home should build ant. Possible market development ant. Possiblemarketdevelopment crease yields,r re potential) consumerbasebyre- re potential) ems; social and cultural heritage; ems; social heritage; andcultural

and distinctive characteristics of distinctivecharacteristics and

d premium quality while d premiumqualitywhile educe supplyinput

Competitive Advantages & Sector Strategies 101 Photo 37: Handloom cubation of product upgrades/cubation of product rket shares and challenge the EU rket shares ilk home textiles, natural dyed homedyed natural ilk home textiles, increase its exports to EU markets. its exports to increase e Northeastern textiles home sector oriented pricing strategies.

oping the market

Target cost reduction throughreduction Target cost process improvements. Related interventions are needed to address cost-effective farming, improved production technologies (equipment, tools and device development) and logistics. innovations such as non-mulberryinnovations such s and fair home textiles textiles, organic trade home niche textiles for EU enabling designon markets. Focus innovation and devel Focus on expanding EU markets, upgradingimproving quality and marketing and linkages. Potential opportunities are addressed through improved interventions: following the defining qualityproductivity, standards throughout the chain, improving quality of raw materials, improving weaving and improving eco- techniques, thealong value chainefficiency (energy-saving, and waste avoidance reduction and efficient wastewater treatment models). by timely response to changingby timely response and preferences customer requirements through more direct a proactivemarketing and export development approach. Research, developmentin and the markets if product innovationmarkets if product and quality upgrading merged are successfully in highly competitive value Thailand will only be able to expand ma • • Based on the findings of this study, th study, this the findings of Based on • should focus on the following issues to on the following should focus 102 Constraints & Opportunities • Polyvoltine Varieties produce. faceRearers different constraints dependi 8.1.1 SpecificConstraints 8.1 Rearers Constraints&Opportunities 8. • • Poly-bivoltine Varieties Variability quality in the poly-bivoltine of silkworm eggs Dependency alow yield Polyvoltine varietieshave yield cocoon Low management ofrearers(resultingin this whether is caused bypoorbreeding obt poly-bivoltine eggs quality ofthe During thefieldinterviewsacomm thatdemandthem. the rearers supply shocksif the QS procure silkwormeggsfrom theQSISas on sole eggsupplier.The aredependent need to rearers Besides the contract farmers ofa but willgivelowcocoon about cleanliness.Nativesilkwormva also forgener shelters or being used often ratherdirtyasrearing area cocoons as well as the lengthofsi

and filamentyields. IS cannot provide enough IS cannot provideenough theQSISmeans that

few private companies, poly-bivoltine few poly-bivoltine privatecompanies, s maybelocated nexttolivestock on compliantwasthevariabilityin lk filament. Rearing conditions are lk filament.Rearing conditions rieties can survive theseconditions, ained from the QSIS.It is unclear ained fromthe in termsof sizethe numberand of creased susceptibilityto disease). ng on the varietyofsilkworm ng onthe they al storage without any concern withoutanyconcern al storage protocols within QSIS or bypoor they are vulnerable to they arevulnerable silkworm eggsforall Constraints & Opportunities 103 The shortage shortage of The cts Mulberry inMulberry Thailand. It is cts as the sole buyer of their as the sole buyer contract arrangements in thearrangements contract in main constraints of sericulture. main constraints ed rearers was the difficulty of difficulty ed rearers was the s as the spread of mulberryspread root-rots as the ract farmers. Bivoltine rearersract farmers. Bivoltine are e too many silkworms compared to e too many . The main reasons for this shortage . The main reasons for this mulberry. The disease spreads very availability, the land tenure system as availability, the land tenure system ant mulberry variety been developed. eed their silkworms. ility of mulberry leaves. Silkworms are are ility of mulberry leaves. Silkworms e DOA, DOAE and QSIS are trying toe DOA, DOAE and QSIS are trying ll rearers face also several common several ll rearers face also is the most common disease that affe

Dependency Dependency Almost all bivoltine rearersAlmost all bivoltine cont are dependent company on the contracting products. The company dominating Northeast is Chul Thai Silk Co., Ltd. Chul Thai Northeast is one of the major problemsfaced by rearer Mulberry disease Mulberry Root-rot is gradually wiping out large stands of soil. Th easily and contaminates the overcome this problem through a special mulberry-breeding program but so far there has root-rot resist no certified There appear to be howeversome level of resistance; an two varieties with improved variety called Buriram 60 and a local variety call Khun Pai.

constrains. shortage Mulberry amongst interview complaint A common obtaining enough mulberry leaves to f mulberry leaves represents one of the 8.1.2 Common Constraints Constraints 8.1.2 Common a constrains Apart from specific the availab by Rearing size is limited rais often under fed because the rearers the quantity of available mulberry leaves of mulberry leaves is die to limited land well as the climate. Bivoltine Varieties Bivoltine • 104 Constraints & Opportunities infecting the silkworms. oldclothes or loosematerialtokeepbamboo trays covered in flies from soils. Most farmers raisesilkwormsin bythesefarmers,whic usually grown a substantialchangeinthei interestedinimpr arenottoo and therefore Mostofthesefarmersconsi own looms. own their areas whoproduce arenormally variety rearers Polyvoltine hygienePoor management andlow control technique to a decrease in quantity and quality of of and quality to adecreaseinquantity production technologies. production lack Thereisanapparent and quality. practices such asdisease control havelimitedOften rearers understandi Limited knowledge unfair prices;reelersma may receive agreements because bothpar absence offormalizedgroups duetothe partly areinformal, andreelers Agreements betweenrearers rearersandreelers Informal agreementsbetween vis-à-visreelers. lownegotiationpower have rearers anditseemsdi ofrearers formalized group orin of expansion t technologies entrepreneurial capabilit Since lack the cash generally flow problems. rearers and have a smallscale on scattered,operate geographically Most ofthe are rearers Limited scaleofproductionandtheref diseasessuch mulberry as root-rot. and pebrine as itwillleadtoanincreaseinsilkwo will sufferfromthesepoormanagemen pr price ofcocoons.Boththemulberry Thisabsenceofanapprop ies, they arenoteagertoinvestmorein production r activity schedule. Native mulberry varieties are are varieties r activityschedule.Nativemulberry silkworm eggs and reel their own yarn for their yarnfortheir silkworm eggsandreeltheirown ties only have verbal commitments. Rearers commitments. Rearers ties onlyhaveverbal . There arerisks . There related tosuchinformal and rearing techniques for cocoon yield techniquesforcocoonyield and rearing heir productioncapacity.Thereisno y receive inconsistent y receiveinconsistent supplies. h are low yielding and grown oninfertile andgrown h arelowyielding orundertheirdwellingplaces,using t techniques and low hygiene controls t techniquesandlowhygienecontrols ng of the importance of good rearing goodrearing ng oftheimportance oduction as well as silkworm rearing aswell oduction silkworm rearing cocoons aswell rm diseases suchasgrasseryand rm diseases of information anddisseminationof der sericulture as a sideline activity der sericultureasasidelineactivity ore limitedcostcompetitiveness small farmerswithlimitedmulberry oving their productivity if it means ifit productivity means oving their fficult to form groups. Asaresult, fficult to formgroups. riate rearing house leads house leads riate rearing a decreaseinthe Constraints & Opportunities 105

hygiene control.

Photo 38: Cocoonage in Construction

ogies/techniques and

the rearing process. clustering and networking.

Apply improved methods in Introduce the concept of Provide training on rearing technol Consolidate material purchasing and thereby reduce costs. Apply written contracts to ensure and fair prices. supplies consistent Develop affordable and acceptable organic fertilizers made from local inputs and develop extension services for proper application and on soil use of these fertilizers based requirements for mulberry cultivation. Upgrade rearing facilities to industry Upgrade rearing facilities to industry standards in order safeguard against disease and quality degradation. Promote new silkworm varieties. Improve soil health and nutrient nutrient and health soil Improve mulberry for management plantations. Improve farming practices to improve yields. Increase mulberry production, usingIncrease mulberry improvedappropriate varieties and weeding and pruning practices. Establish effective networks (co- networks effective Establish operatives, or associations) clubs and develop new business to models overcome issues of small actors with low negotiation power vis-à-vis reelers. • • • • • • • • • • • Opportunities in this segment are as follows: in this segment Opportunities • 106 Constraints & Opportunities capacity toeffectively planandm there atypical year supplies. Throughout coincide withthetime ofrice growing/ fabrics. Lack ofplanningaswell as by modern weaving factoriesforthe weaving by modern in thickness,uniformityandquality.This levels ofcompetency willresultinhand- practices at the villagelevel.Theva andis thereforcan onlybehand-reeled different constraints.prod The yarn silkworm cocoonshavediffe frompolyvoltine,poly-bi Yarn produced Inconsistency ofquality affecting mark yields willbeverylow Iftheresuch asweather andrainfall. leafquality Silkworms andmulberry Inconsistency ofsupply 8.2.1 Reelers 8.2 Pre-processors .. Dyers 8.2.2 fastness), whicharenotnormally accept istheapplicat problem remaining level ofdisciplinedyers toco solved technicallyin terms offastnes locations can leadtodifferent dyeresult the material.Alsonaturaldyesfrom quality ofthecolorantwillvarythroug andcollectionofnatural production dyestuffs, For naturalthecontinuity Inconsistency ofnaturaldyestuff rent characteristics, di rent characteristics, inconsistent laboursupp anage suppliesin anage this sector. uced from polyvoltine silkworm cocoons uced frompolyvoltinesilkwormcocoons st number of hand-reelers with different withdifferent hand-reelers st numberof ion of mordants (to enhance colour colour (toenhance ion ofmordants species grown in different geographic geographic indifferent speciesgrown mply with international standards. A mply withinternational of supply needs to be addressed. The tobeaddressed.The of supplyneeds h theseasonaswell s andconsistency,but harvesting canalsocauseinconsistent depends largely on natural conditions conditions on natural largely depends dyestuff isusually seasonalandthe et supplyandalsoim production ofconsis is naturaldisastersuchasaflood, ed intextilecertif reeled yarns,which resultsin yarnthatcannotbeused s. The problem with natural dyesis s. Theproblemwithnatural voltine and bivoltine varietiesofvoltine andbivoltine e restricted to e restricted traditionalreeling are limitations at all levels in the limitationsatalllevelsinthe are fferent uses and therefore fferent usesandtherefore lies during periodsthat lies during ication schemes. as withtheageof it needs ahigh have variations tent qualitysilk pacting reelers. Constraints & Opportunities 107 stations could

r the productivity, ure consistent

of weaving techniques and improvements in silk processing improvements in methods to ens methods to

s or to recycle their wastewater inwastewater their recycle s or to increase supply consistency; increase supply medium-sized dyeing managed; products with mis-matched t well structured or organized and or organized structured t well me-based dyers cannot afford these oduce too much product with too much oduce too much product with too he neighbourhoods units, of processing yles and patterns appeal to international port market and will lowe annot be sold, leading to large product er treatment technologies. for weather interruptions. here is a high diversity here is a high nd product supplies.

supplies. and production. Develop cooperative ventures with rotational production to ensure consistent labour a establish contingency plans establish contingency Adopt new technologies and continuous Develop and transfer wastewat Develop design of buyers. competence with the help Formalize agreements and planning to Provide training on production planning • • • • • • Opportunities at this segment are as follows:Opportunities at this segment are fabric patterns. But not all Thai st not fabric patterns. But to pr There is a tendency customers. variation in fabric patterns that c is not properly product mix stocks. The designs are difficult to sell in the ex particularly with input/output ratios. 8.2.3 Weavers Absence of development & design previously, t mentioned As

No wastewaterNo treatment scheme The existing dyeing process is no wastewater flows freely through t flows freely wastewater polluting water and soil. Only a few the production process. Small or ho the production process. investments. afford to have wastewater treatment plant treatment afford to have wastewater 108 Constraints & Opportunities • Opportunities atthissegmentareasfollows: predict orcontrolt areoverloadedwi Although manyproducers consistent su to produce supplies and This issuethat affectsproducers themost Inconsistency &supply ofquality of power the bargaining margins and of competiti increases thelevel of competitors. Thelimitednumber protec intellectualproperty weak very Designshave tocopy. easy aresimpleand handicraft designs In general, ordesigns Imitation duplicationof HomeTextileProducers 8.3 • • • ***OBM isabusinessmodel, which focuseson branding ratherthan ondesign or ** ODMisabusinessmodel, which focuseson design ratherthanonbranding or * OEMisabusinessmodel, focusesonthemanufacturing which processrather thanon manufacturing. manufacturing. design orbranding. Improve product divers Improve product (OBM***) Manufacturers business model. Brand (ODM**)orOriginal Design Manufacturers model intotheOriginal Equipment the Original Move from skillsandknowledge Develop design Develop amoresystematic

heir production capacity. heir production ification andmanagement. productionplanningapproach. on between producers and reduce the the reduce and producers on between producerstowardscustomers. tion, leading to extensive copying by by copying tion, leadingtoextensive updated or new product designs product ornew updated about colours,styletrends,etc. about fficient qualitiesto meet demand. Manufacturers(OEM*)business as that they often face difficulties asthattheyoftenfacedifficulties

th orders,mostof them cannot

Constraints & Opportunities 109 ite picture is ite picture market shrink and/or faster, at the right price, Consequently, they have y onmarket alone is risky this ties to participate in international ers are not respected often partly s claimed that the imported silk be successful in the current global ion channels; resulting in exportersion channels; in resulting may receive inconsistent supplies. may receive inconsistent oducers may receive unfair prices or lk products, the oppos buyers. In the past, there was little was the past, there buyers. In products exports from Northeastern products exports latory controls. There are risks related are risks related latory controls. There and other thirdExporters are parties. epreneurs often lack are SMEs and ue to almost all the customers buyingue to almost all the ned about colour fading after washing. Notably Thai home textile products do unication skills and bargainingunication skills and power of products have high quality colours and products have high quality colours and their channels, own due to poor economies onal trade knowledge. base. The smaller exporters have less export onsequences this should y bring products to the market to the y bring products

having little or no access to foreign developexporters to interest from limited market knowledge. of scale and Lack of direct contacts foreign buyers/Lack to of distribution channels distribut established There are only a few products had lower quality colours and less colourfastness. products had lower quality colours and less markets few on Dependency home textile 80% of An estimated Thailand went to in 2006 Japan. Dependenc and could have negative c prefer sourcing from other countries. not have a large consumer potential becausethey have fewer opportuni generally found; a number of informant due to the absence of penalties or regu due to the absence pr kinds of agreements because to such cannot sell their products whilst exporters Limited knowledge information, comm Access to market exporters most entr are low because language skills and internati to rely on brokers, trading companies expected to continuingl and in synchronise with market demand to trade fairs and other buyer-seller meetings. High Colour & Colourfastness Colour and is major iss colourfastness often complai silk products. Silk buyers that Thai silk Most informants told colourfastness levels. For imported si 8.4 Trading Agencies/Exporters Agencies/Exporters 8.4 Trading agreements betweenInformal and exporterstextile producers home Agreements between producers and export marketplace. 110 Constraints & Opportunities sales volume. inlower resulting buyers toforeign producers local information regarding Absence ofskilledsale skilled salespeople Absence of • • • • • • • • Opportunities atthissegmentareasfollows: business. international seriously affectedbycurrencyfluct fluctuating exchange raterisks.The to themarketorquality difficultiesin experienced Thai exporters Currency fluctuation Thai pricecompetitiveness. of theCIFcostperkg.This willincr 3.5 EURoftheCIFcost per kg.Seafr obstacles isthehighcostoftransportati toexpand arelooking Thai exporters High freightcoststoEUcountries Develop and transfer appropriate dyeing technologies. transferappropriatedyeing Develop and thepotential Capitalize on withtrans and collaborate Co-ordinate show contacts. trade followupof and mechanismforre-ordering Create astreamlined fluctuations. tofacethe toolstobebetterable and merchandizing riskof demand advanceplanning, Develop sophisticated Establish direct linkages with fo markets. Diversify mark Explore additional relationships withthosebuyers.

of productsbut alsobecaus speople leads toinadequ speople leads ets andmarketsegments. of growingEUmarkets.

reign buyers and develop stabletrading anddevelop reign buyers

ease thepriceforim uations. Thisisacommonriskwith to EUmarketsbutoneofthebiggest eight costs ranges from 0.3-1.2 EUR eight costsranges0.3-1.2 EUR from on. Airfreightcostsrangesfrom2.8- obtaining export orders not only due notonly due orders export obtaining profit margin ofexporterscanbe portation and logisticsenterprises. portation and forecasting, pricing,promotions e ofthetransaction and

ate dissemination of ate dissemination of porters anddecrease

Constraints & Opportunities 111 design capacity and design capacity the limited domestic he case of the more up- educed the competitiveness work principally with colours,work principally with t. This is particularly vital for the is particularly vital for the t. This hem to be price takers. hem to be price takers. mulberry leaves, there are supply mulberry leaves, there are supply on imported raw silk yarn to meetyarn to silk on imported raw yarn counts, fabric design, finishingyarn counts, fabric design, ign centres leads to production and ign centres leads to production porters appreciate the importance of unprocessed yarn silk from Vietnam ons, feelings, moods, and trends.ons, feelings, market in which re conventionally designed silk home oduct development strategies. This has This has oduct development strategies. cularly polyvoltine silk yarn. Weavers in inadequate due to poor quality. Because d” product lines for the bedroom and s cannot commit to additional markets. s cannot commit to additional markets. responses from EU buyers/markets. ents and planning betweenents and planning rearers and abundant sources. Due to abundant sources. rket information has r portance, especially in t cannot meet demands from foreign buyers suffer demands from cannot meet and bargaining power of producers forcing t Very few home textile producers and ex supply of silk yarn is sometimes that agreem lack of formal of the producers along with the inadequacy of Lack of market-oriented product development Notably home textiles is yet another expertise are of great im market items such as “co-ordinate bathroom. Absence of ma product Designers design and development. promotion of the unattractive or mo in fewer textile products, resulting The need for paramoun daily yarn supply is skilled designers/design centres Limited to access skilled designers/des Inability to access shortages. Exporters that from low creditability. Also exporter proporti shadows, illusions, shapes, Exporters need to understand how buyers in foreign marketsa look at they can adopt suitable pr so product an effect on the blend ofthe fibres, to and composition of collections. 8.5 Sector Wide Issues Yarn supply shortage silk yarn parti shortage of There is a Northeastern buy are forced to Thailand and China, which still have is highly dependentsupplies, Thailand growing domestic and export home textile demands. 112 Constraints & Opportunities system in placeforallactorsinthe text inthehome systems amongplayers is seriously compromised bylackof market. The competitiv quality andhence because ofthelevels textileExporting home productsto the control infact and management proper competition itis important to maintain Dueto thehighlevelof sometimes beaseriousproblem withforeignbuyers. festival.Exportersalso Songkran water not workduringanylocalceremonyor leadtimes).Sectorstakehol meet export membersforthe other thanfamily Thereproducts. isoften home textile fromplanting,picking,rearing, by hand in Home textileproductionisverylabour controlsystemLack ofproperquality and assurance volume high-value items, volume high-value which circumstance, theywillonlyeverbe artists withoutbusinessarea are acumen. Mostofthe inthe people supported. and nurtured tobe the sectorandneed partwithin important very a craftdesignersplay and Traditional producers judgment. and intuition, experience, especially decisions, production-planning fulfilment lead-times andishindering with poorsupplychainint Lack ofan effective businessmodel Inabilityhandle aggressivescale-up to ofqualitexample, absence proc delivery and the manufacturing silk products in theglobalmarket. and finishingetc.) of silk productsre leads toproductionofinferi compliance required forthe compliance required egration ismakingitdifficult to meet production or quality (in terms of denier in yarn, fabric (in termsof colour or qualitydenierinyarn, y control system atall does notallowforjobcreation. chain. Rough handling chain. Roughhandling demanding production schedule (i.e. to schedule(i.e. production demanding proper quality assurance and control assuranceandcontrol quality proper sulting in decreasing demand for Thai sulting indecreasingdemand for producers and exporters coupled andexporters forproducers no reliable and consistent labour force consistentlabourforce and no reliable affectsthe chain. entire value consistencyofs reeling, dyeing, weaving andmaking reeling,dyeing,weaving in the“business”ofproducinglow- ess can alsoresult damage. For important holiday times such as the EU isa particularly risky business eness of Thai hometextileproducts tensive. Almost everythingisdone Bychoice,andsometimes force of note thatthisglitchinsupplycan iles sector. There is no monitoring isnomonitoring iles sector.There ders note that Thai producers will producers thatThai note ders scheduling, is resolved through scheduling,isresolvedthrough orders. Traditionally, of export level of silk production products products to enterthe upply. Thus, lack of of products alongof products Constraints & Opportunities 113 hat their products ever, widely known by all the e for individual countries. While e for individual countries. While growers, reelers, dyers, rearers, research the nature for studying ctant to break from their traditions. ctant to oduct (in terms of colourfastness, oduct (in terms of competitive analyses and review opportunities for the home textiles opportunities for the home capacity and knowledge required for autions to ensure t the whole home textiles sector, the gned to meet the requiredmarket there is a lack of additional skilled there is ssions and trade fairs but this should ssions and trade fairs dentify opportunities. Thai exporters to communicate with end-customers to communicate with end-customers ce harvest) and in general (younger clients’ demand for authentic and clients’ demand for authentic fully exploited and should be further has prevented producers and market ailand is generally poor and the home Most companies in the industryMost companies do not c.) and inadequate quantities of supply, smatch between the demandsmatch between and supply. nd skills tends to disappear. nd skills are up to the EU standard required. Absence of additional skilled labour labour Absence of additional skilled sectors, other local productionin As players in the value chain,players the and this in suppliers from taking all necessary prec during ri labour, both, seasonal (e.g. labourers prefer working in urban environments in industrial sectors) subsequently local knowledge a Domestic production should better ali resistance to change is a problem in resistance to change is a problem home textile producers are particularly relu not,standards. These standards are how colour contrast, pattern, design, et resulting in increasingly growing mi Lack of market intelligence in Th to market information Access not antextiles sector is exception. market the resources to conduct possess and cultureEU markets, undertake of regulatory requirements, as well as i mi have so far focused mainly on trade intelligenc be expanded to include market to theirpartly This is due unfamiliarity and an unrealistic of perception environmentally friendly products. The export market are not the sector in expanded and capitalized. However the entering the EU markets is limited. No formalised coordination among stakeholders stakeholders among coordination No formalised coordination amongLack of the mulberry weavers, home textile producers traders, and exporters leads to unplanned production and supply of inappropriate pr 114 Constraints & Opportunities being used in Thailand. being usedin toxic, manyhighly markets havebanned chemical banned other AZO dyeand/or processes.No anddyeing manufacturing hometextile products Traditionally, Chemical residue is sold atrelatively lowpriceat advised that significant volumeof si affectsthevolumeoflocaladversely at thesame price as domestic silk yarn buyersc kg. whilethe perkg.Asaresult,the importedyarnisonly14-16EUR sellat21-22EURper haveto tomakeaprofit,producers kg. andinorder yarn forweft(150-200denier)att was around6 EUR per kg. lower thanthe difficult todistinguishfromThaiyarn it because Weavers usetheimportedyarn informal importsaresizableeven The existingbordercontrolsareweak resultedin silkyarnhas and Chinese Smuggling silkyarnnotonl Smuggling yarn (Workshop onEriSilk) Photo 39:Dyed EriSilk Cocoons usingNaturalDye Stuff that of smuggled yarn. an reduce the buying price of the local yarntobuy price an reducethebuying y causessizablelossesin the moment.The smuggling ofVietnamese he villagelevelisaround18-19EURper lk Thailandand yarns aresmuggledinto . The price of informal imports in 2007 informalimportsin2007 Thepriceof . though clear estimates arelacking. yarn trade. Several surveyinformants a reduction in local yarn production. a reductioninlocalyarnproduction. and itisbelieved byinformantsthat canbe harmful.Although,EU highresiduedyes, they arestill usedin the toxicchemicals tably, home textile products with tably, hometextileproducts domestic price.T is cheaper and itisrelatively is and cheaper sellingprices,butalso he costofsilk Constraints & Opportunities 115 is both a strengthboth (allows for is ucts have to comply with high ucts have to comply eakness (hampers stability and hat are mandated by EU both terms of emissions to air, soil and emissions terms of mething to change but to work with. Photo 40: Dyeing Eri Silk using Natural Photo 40: Dyeing Silk) on Eri Stuff (Workshop Dye that were discarded In the wastewater. with that were consumer demand. consumer demand. Given the inherent nature of work much of the the sector, contract or freelance, is piece based; most to enterprises contract is up 100% of capacity when needed; while this Freelance and contract work predominates flexibility and opportunism) w and a development), so it is not necessarily The relationship between standards environmental is and competitiveness analysts complicated. Some consider compliance with environmental requirements as an additional burden, which increase production costs and harms the andcompetitiveness of firms sectors, particularly those engaged in international consider Others trade. environmental standards a mechanism for improving production efficiency and reducing adverse impacts on the environment where the environmental of costs degradation are paid by whole. society as a The home textiles sector used to be used textilesThe home regarded sector as sector mainly a polluting dyes the use of of because future, more stringent requirements in Finished prod water will be imposed. Stringent environmental requirement environmental Stringent environmental and health standards t legislation and 116 Constraints & Opportunities • • • • • • • • • • • • • • • Opportunities atthissegmentareasfollows: Provide training on production planning toensuresufficientsupplies planning onproduction Provide training Apply writtenagreements to fa Provide a central pointformarketin Provide acentral stakeholders Formalize linkagestoincrease of yarn.This will requireconcer ofsilk Ensure effectiveprevention onThaihometextiles PR inEUto create awareness techniques marketinformation Make available markets Availability ofmarketassessment conditions Faster flowofmarketinformation products forhandc Meet customerdemand Link existingdesignresour internati Integration of EUmarketportion high-end toincreasemarketshare(i.e order factorsarecritical Examine what markets Develop niche orlabou Explore labour-saving

onal designersanddesigntrends onal

ces including people and events ces includingpeopleand

cilitate consistentsupplies r-efficiency enhancing techniques r-efficiency enhancing negotiation and coordination among among andcoordination negotiation ted action at international level. ted actionatinternational and abilitytorespondquicklymarket rafted, unique and Asian-inspired rafted, uniqueand tools for identifying newer and niche tools foridentifyingnewerand and advisory servicesinmarketing advisory and yarn transport to tackle the smuggling yarn transporttotacklethesmuggling to them EU marketsandaddress in formation (requirements, trends,etc.) formation (requirements, . product development); capture the . development);capturethe product

Sub-sector Constraints / Opportunity Analysis 117

ity/quality requirements, and higher to categorize on the the constraints as best matching with the study’s as best matching actions with EU trade intermediariesactions en to increased number of Thai SMEs,

of export quality. Increased number and volume of transactions with Increased number and volume of transactions EU trade with intermediaries can cope with SMEs, which Increased number of Thai minimum EU quantity/quality requirements quality Higher percentage of product is of export • • • the home textiles sub-sectorthe home textiles an in the Northeast and likely show impact the constraint has been 6 months after within out. worked factorsfollowing that are considered to be most important indicators to targeted to EU based niche entry markets. Figure 27: Matrix to Categorize the Constraints Figure 27: Matrix to Categorize following matrix team used the The study the variable factors. basis of 9. Sub-sector Analysis Constraints/Opportunities Variable 2: Variable The weighted averages of the impact/consequences on the Variable 1: Variable Constraints are selected by the survey team that significantly affect percentage of products Increased number andof trans volume was given the highest priority (50%) objective. Equal weight (25%) was giv which can cope with minimum EU quant 118 Sub-sector Constraints / Opportunity Analysis Table 16:ConstraintsPrioritising Matrix 9 8 7 6 5 4 3 2 1 23 22 21 20 19 18 17 16 15 14 13 12 11 10 service providers. service providers. probability fortheprogrammetoaddre survey bythestudyteam ex and and theimpression information basisof the the outcomewith done on of theirimpac thedegree according to tablebelow, Inthe above. mentioned The identifiedconstraintswereasse been used. The matrix has nine quadrants ninequadrants matrixhas been used.The constraints inthematrix, theserial their ratingagainstthe set.To variable thestudyteam. Theconstr by developed Based ontheoutputof the exercises,

Dependency on few markets onfew Dependency Imitation orduplicationofdesigns wastewater scheme No treatment Inconsistencyquality of &supply work predominates Freelance &contract technique&low control hygiene Poor management Mulberry disease shortage Mulberry Variability silkwormof poly-bivoltine inquality eggs Constraints Stringent environmental requirement Stringent environmental Smuggling yarn Chemical residue Absence ofadditionalskilledlabour Lack ofmarketintelligence stakeholders No formalizedcoordinationamong aggressivescale-upInability tohandle &controlsystemquality assurance Lack ofproper Limited accessto skilled development product Lack ofmarketoriented Yarn supply shortage High freightcoststoEUcountries Absence ofskilled salespersons High colorandcolorfastness

designers/design centers

. Thelastcolumnofthetable,illustrates

number of each of number ofeach ssed onthebasisof all thefactors

t on the given factors. The rating was was given factors.Therating t onthe key informants, available secondary keyinformants,available thefollowingselection matrix was simplify the process of plottingthe

each of the constraintswasrated each of perience gathered during the field thefield during gathered perience ss constraintsdirectlyorthrough

aints wereplottedonthe basisof

to classify theconstraints.

% 50 A 7 6 6 6 9 9 6 9 9 10 7 6 7 7 5 5 6 8 6 6 6 6 6

% 25 B 7 6 6 6 9 8 6 9 9 9 7 6 6 7 5 5 7 7 6 7 6 6 6

% 25 C 7 6 8 6 9 9 6 9 9 9 7 6 6 7 6 6 6 7 6 7 6 6 7

the constraintshas Total 7.00 6.00 6.50 6.00 9.00 8.75 6.00 9.00 9.00 9.50 7.00 6.00 6.50 7.00 5.25 5.25 6.25 4.50 6.00 6.50 6.00 6.00 6.25

Possibilities Intervention Program Partly Partly Partly Partly Yes Yes Partly Yes Yes Yes Partly Partly Partly Partly Partly Partly Yes Partly Partly Yes Partly Partly Partly

Sub-sector Constraints / Opportunity Analysis 119 ereotyped in turnproducts. This s has resulted in absence of ontrol system leads to an inabilityontrol system leads to eholders leads to a decrease in leads to an inability to access new leads to an inability to access new also resulting in decline in demandalso resulting

targeted entry to EU based niche tern, design, etc.) resulting in antern, design, etc.)

for Northeastern home textiles are ppropriate product (in terms of properdevelopment and know-how demand of products both in domestic the programme’s and may objective between demand and supply. apability) of pre-processors and home textile ented product developmentto access and limited contemporary designing c producers has lead to production of st gradual decline in the results in a and global market. Lack of proper quality assurance and c to produce the required silk products home textiles. for Thai silk Absence of market-ori Absence of skilled designers/design centres (Thi productivity and supply of ina pat colourfastness, colour contrast, mismatch increasingly growing Insufficient knowledge on market required for expanding the EU market business expansion and resulting growth for in a huge loss in markets income potential. The possibilities and should be expanded.then limited Lack of coordination amongcoordination Lack of the stak • markets. • • also create a moderate impact on the • The following constraints match with Figure 28: Constraints Selection Matrix Figure 28: Constraints Selection 120 Intervention Design environment where where there are environment effect on stakeholders hasadampening storage transporta packaging, and handling, inlossesandfinancia attendant increase thesilkproduct from middlemen handling levels ofthe chainperpetuatesasi linkages betweenstakeholders.Alack system isultimatelyunsustainable Itisclearthat indemands. for changes as welltemporally)the (matchi both salesofexistingproduct consumers and (andallstakehol producers processed, marketedandthenul the chainitisdifficult and newlinkagesdeveloped.If strengthened The existinglinkagesbet StakeholdersStrengthening Linkagesbetween • • • • The crucialthemestofocusintheNo Introduction&Background 10.1 Design Intervention 10. standing and increaseits standing and market ofThaipr and promotion silkhome textiles and non-mulberry natur prof more tocapture potential opportunity ofinnovative development the exploring The limitedexistingservicesforEU accessmorewould liketo marketsbutla islimiting and expansion vulnerable onafewmainmarkets The reliance Developing Markets Quality controlthrough differentiation and Product upgrading marketdevelopment Continuous linkages Strengthening

for finesilkproductsto ween stakeholders along the ween stakeholdersalong oducts and correct branding willimprovethesector oducts and correct branding out thevaluechain out between stakeholders between stakeholders no enforceable contracts. no enforceable shareintheEUmarket. unless there unless is a strengthening ofthe rtheastern home textilesarertheastern home asfollows: ng supplies with demands bothspatiallyng supplieswithdemands of the sector. Producers and exporters of thesector. Producersandexporters markets need to be expanded whilst whilst markets needtobeexpanded development of new products to cater ofnewproducts development timately sold.Feedbackbetween tuation where there are multiple aremultiple tuation there where ck the skills/knowledge in this area. inthisarea. ck theskills/knowledge new models. Inaddition,thereis anew models. its with niche target groups suchas groups its withnichetarget any intervention in the marketing inthemarketing anyintervention of linkages between non-adjacent of linkages non-adjacent between al dyed home textiles. Marketing hometextiles.Marketing al dyed farm gateto consumers, with the leaves the home textile sector leaves thehometextilesector tion. Also,alackof trust between ders alongthechain)isvital ders for transactions, particularlyan transactions, in thereisno coordination along l inefficienciesfrom multiple be transformedor produced, value chainneedtobe Intervention Design 121 tion, but cannot body sizes, life styles, activities body sizes, life styles, activities place for all actors in the chain, place for all actors in the chain, pages contains a summary of the of the pages contains a summary p differentiate products, establish ement of value addi among players in the home textiles consistency. Some exporters are notconsistency. Some exporters are peting supplies in the market. Good the market. Good peting supplies in te Thai products can help protect can te Thai products cases, allow products to command a to command cases, allow products existing services were explored with compared products to the handloom training on proper procedures. This be expanded and innovative products successful marketing campaign. Lack marketing campaign. successful ns and at the validation workshop onns and at the ducts with poor orducts with poor inadequate designs standably, want to see improvement. mplete design appreciation. Upgrading, the quality and hence competitiveness of high selling priceshigh selling to high production due is seriously compromised by lack of proper compromised by lack seriously is ge of quality assurance is low. There are no sectorge of quality assurance is low. There April 2007. The tables on the next th originate in a vacuum. Exporting pro can seriously jeopardize an otherwise of sufficient understanding of physiognomy, conditions result in inco and climatic designing and branding to differentia need to situation. Services against this explored according to identified and target markets. trends findings. stakeholders in interviews, discussio 24 10.2 with Satisfaction & Services of Provision Existing The provision of and satisfaction with noting that their knowled nostandards for quality control and and quality in supply situation results in and, under situation satisfied with this As detailed in the previous section, Improving Quality Control throughout the value chain Control throughout Quality Improving consumer loyalty and trustconsumer loyalty many and, in premium price. el Design is the biggest Northeastern home textiles quality assurance and control system in sector. There is no monitoring system Poorly differentiated product,Poorly differentiated especially result in countries, that from other be replacedcosts are likely to by com design and product innovation can hel Product Upgrading & Differentiating Differentiating Upgrading & Product 122 Intervention Design cation Certifi- Inspection, Testing, Irrigation eggs Silkworm Supply of Advice System Farming Inputs & Pre-processors (Rearers,Reeler &Dyers) Service 2007) andAnalysis interviews (Sources: Stakeholder Stakeholders andSatisfactionof Awareness Table 17:ExistingServices-Access,

DSS Centre, Testing Textile i.e. SGS, agencies consulting foreign Internal, providers private numerous Internal, companies few a QSIS, Internal, companies few a QSIS, DOA, DOAE, Provider(s)

Access ness / Aware- 100% 100% 20% 50% coverage) thorough 50% (not effectiveness) efficiency and improve 80% (could higher yield) quality and improve reliable, could 60% (more techniques) labour-saving know-how, request more 50% (farmers Satisfaction by the Survey Team, 2007 and Validation workshop, 2007andValidation Team, Surveyby the service training / extension subsidized some Commercial, Coverage Cost Commercial Commercial service training / extension subsidized some Commercial, regulation MRL complywith EU chemical used must important tonotethat keeping isvital. Itis place. Record product mustbein track theregistered traceability to system A documented Improvement Initial Ideasfor importance. on increasing management takes good quality reason, theneedfor market. Forthis processing totheend chain, fromfarmingto throughout thetextile very important health andsafety are markets. Consumer for high-end/niche assurance systems integrity quality of transparency, and credibility, key tooltoprovide Certification isthe and effectiveness. improve efficiency systems could Suitable irrigation important. guarantee is origin and/or Document toshow Intervention Design 123

Certification is the key key is the Certification tool to provide credibility, and transparency, of quality integrity for assurance systems high-end/niche markets. and health Consumer are very safety important throughout from the textile chain, farming to processing to the end market. good quality Hence on management takes importance. increasing Initial Ideas for Improvement labour Appropriate practice is a very important determinant and of consistency supply, high quality is essential for which customers. maintaining Commercial Commercial Cost Coverage Commercial

by the by Survey Team, Validation 2007 and workshop,

70% (need more consistent and reliable labour force) 40% (cost could be and lower more thorough coverage) Satisfaction 20% 100% Aware- ness / Access (Continuation) Provider(s) Provider(s) Internal, foreign consulting agencies SGS, i.e. Textile Testing Centre, DSS Internal

(Sources: Stakeholder interviews Analysis and 2007) Table 17: Existing Services - Access, Existing Services Table 17: Awarenessof Satisfaction and Stakeholders Testing, Inspection, Certifi- cation Handloom Weavers Weavers Handloom Provision of labour Service Service 124 Intervention Design cation Certifi- Inspection, Testing, Packaging ProducersHome Textile Service 2007) andAnalysis interviews (Sources: Stakeholder Stakeholders andSatisfactionof Awareness Table 17:ExistingServices-Access,

DSS Centre, Testing Textile i.e. SGS, agencies consulting foreign Internal, companies several Internal, Provider(s) (Continuation) Access ness / Aware- 100% 20% coverage) thorough and more could be lower 40% (cost effectiveness) efficiency & improve order; could 70% (madeto Satisfaction by the Survey Team, 2007 and Validation workshop, 2007andValidation Team, Surveyby the Commercial Coverage Cost Commercial handling. temperature andrough changes of against theelements, must beprotected countries. Products toEU to export products ifoneintends the packagingof Care mustbegivento Improvement Initial Ideasfor increasing importance. management takes on good quality reason, theneedfor market. Forthis processing totheend chain, fromfarmingto throughout thetextile very important health andsafety are markets. Consumer high-end/niche assurance systems for integrity quality of transparency, and credibility, tool toprovide Certification isthe key Intervention Design 125 See above See above Europe is a continent and not one market, of but a patchwork different markets with characteristics. For that reason a selection of target countries has to be made for marketing purposes. approach The general is to choose a limited number of countries: them as and classify and secondary primary targets. of Besides the basics transport and handling exporters durability, to follow are advised specific requirements and guidelines packaging, concerning like information the order concerning and numbers printed on the boxes. Initial Ideas for Improvement should Exporters as position themselves who suppliers reliable can commit to delivery The logistic times. having concepts aim at the right goods at the right time, in the right at the right volumes all that at a place and Due minimum of costs. to its great importance, are not delays tolerated.

Commercial Commercial Commercial, some subsidized Commercial Cost Coverage Commercial

by the by Survey Team, Validation 2007 and workshop, 80% (could improve & efficiency effectiveness) 80% (cost could be lower) 40% (supporting function; rely basically on their own competitive- ness) 70% (cost could be lower) Satisfaction

100% 100% 100% 100% Aware- ness / Access

(Continuation) (Continuation) Provider(s) Provider(s) Internal, several companies Several Several companies Internal, DEP Several companies

(Sources: Stakeholder interviews Analysis and Table 17: Existing Services - Access, Existing Services Table 17: Awarenessof Satisfaction and Stakeholders 2007) Packaging Packaging Marketing to Importers Sea Freight Exporters Exporters Air Freight Service Service 126 Intervention Design suppliers and greaterinnova suppliers and currentpac of nature made-to-order The satisfaction rate forpackagingis Home TextileProducers desire forlowercostsof testing services. cove reflect the needformorethorough exporters willpurchasefinishedproducts. Testing forchemicalresiduesisso of labourisrankedat70%. for provision and consistent labourforceotherthan fa fo respond toincreasinglabourdemands that thereisst weaversnote Handloom Handloom Weavers in testingservices. coverage more thorough the needfor Satisfacti byexporters. ensure purchase For thetimebeing,testing management. i ofproper knowledge and improved systems c inefficiency ofirrigation The satisfactionratefor irrigation in Thai conditionsandsuperior to limitedavailability.Thedevelopment alternative silkwormeggsources.The sa wouldlikeRearers higherqualitysilkwo 50%. laboursavingtec environment, asakeypr leaveslabour production mayinfact margins and Asa result, pre-pr have increased. cost)mulberry and (mainlylabour same timeproductioncosts while atthe notethat Pre-processors The primaryandmajordissatisfaction of Dyers) Reelers& (Rearers, Pre-processor the selling prices haveremainedthesameforyears suffer losses. Thelabour-i for chemical residues is not required in order to for chemicalresiduesisnotrequiredinorderto tion and/or buying schemes. buying tion and/or outputisalsodesired. hniques canbe critical. Sa ould be improved with better technology technology withbetter ould beimproved is rankedat 80%. Thehighcostsand metimes required in order to ensure toensure order metimes requiredin kaging could be improved with more withmore beimproved kaging could ranked at 70%. The high costs and rankedat70%.Thehigh costsand ocessors have extremely low profit lowprofit ocessors haveextremely ill alimitedsupplyofskilledlabourto of varieties that are well adapted to of varietiesthatarewelladaptedto mily members. The satisfaction rateThe satisfaction mily members. pre-processors is low selling prices. pre-processors islow selling prices. rrigation installationrrigation andsystems ice driver. Inapricecompetitive ice driver. tisfaction rate isranked at60%due on isratedat50percentto reflect Satisfaction isrankedat40%to r production. There is no reliable There isnoreliable r production. rage in testing services rage andthe rm eggs as well as reliable, rm eggs aswellreliable, ntensive nature of silk ntensive natureofsilk

tisfaction isratedat Intervention Design 127 . one but specific value from importers and importers and value from and markets and could useand and markets demand led sector demand

a ent and effective, particularly particularly effective, in ent and ire value chain and the following ling and in selecting optimal sizes ling selecting and in oducts that are safer for end users that are safer for end users oducts ay a supporting role. Satisfaction is role. Satisfaction supporting ay a intervention in the sector particularly intervention in the is ranked at 40% to reflect the need tation containers. The use of more the Northeastern region and the Northeastern its rvices and desire for lower the costs is sometimes required in order to is ccess factors for the development ccess factors of intervention to enhance domestic Again, more attractive and effective Again, more attractive and effective cost from 5-10% of the CIF cost; of the CIF cost; cost from 5-10% ranked at 80%. In general, packaging general, packaging ranked at 80%. In gh cost of transportation, particularly on competitiveness al e future potential clearly exists. to enhance export opportunities EU to entage decreased. Current of satisfaction percentage of the value added. omotions to link with sellers are scarce. The link with sellers are scarce. The omotions to ters would like to exp ters would like to help capture more of the more of the help capture is 70% and 80% respectively.

marketing campaigns or pr doesDepartment pl Promotion of Export rated at 40% because expor The satisfaction rate for packaging is The satisfaction rate for packaging could be more efficient and effective. packaging could capture a larger Packaging

Marketing to importers relies heavily Marketing to importers relies heavily airfreight cost. Airfreight alone canairfreight cost. Airfreight exporters this perc would like to see airfreight and sea freight A complaint from exportersA complaint from the hi is Exporters retailers. Testing for chemical residues for chemical retailers. Testing pr will purchase finished ensure exporters or meet MRL requirements. Satisfaction for more thorough coverage in testing se of testing services. In general, could be more packaging effici regardto improved protection during hand efficientto ensure loading into transpor packaging could attractive assistance in marketing skills. 10.3 Scope & Ideas for Intervention Initial areas have been identified as critical su in sector a sustainable home textiles transformation from a supply driven focus into Intervention is needed to strengthen the ent

The study indicates the limited scope for the limited scope The study indicates in terms of immediate intervention markets. However, the opportunity of operations to increas with an intention

128 Intervention Design textiles sector textiles sector Figure 29:CriticalSuccessFactors EU MarketDemand

• • Input • • • as: Implementation ofproduct Design materials, newtechnol Co-ordinated researchanddevelopmen access efficient and Enable widespread

which valuable designinspirationcanbegleaned which valuable ofherit Protection anddocumentation development product Access to trend informationand skillsdevelopment andinnovation Local design EU Market Demand Design Input

ogies and new applications andnew ogies Services andDistribution Enabling Environment design andqualitydevelopm market intelligenceondesignand for developingasustainablehome Production age and cultural resources from culturalresources age and to cost effective rawmaterials t – leading to availability of new t –leadingtoavailability

ent strategiessuch EU Market

Intervention Design 129

“Made in Northeastern

t programmes across the value t programmes across the

efficient production process rts individual enterprise identity.

ogies to enhance production capacity

a single recognisable production facilities opportunities - Exploit EU market opportunities - Exploit EU - Inform market needs - Identify market - Position Thai products appropriately - Position Thai

- Access to appropriate technology appropriate to - Access - Training in production-line and - Business development - Business development sustainability - Business - Self-sufficiency

Market research processes in order to: Market research processes in order order to: Strategy in the sector, in Access to high standard Access Enterprise development support programmes to encourage: Capacity building and skills developmen chain Mobilize the emergence of Mobilize the and improve particular efficiency in Production finance support Thailand” brand, which strongly suppo Development of tools and technol Development of Marketing & promotional Marketing & effort to: • • Co-ordination and collaboration between: • EU Market • • • • • Co-ordination and collaboration of: Production Production 130 Intervention Design • • • of: andalignment Co-ordination Enabling Environment • • • • between: andcollaboration Co-ordination Distribution Services & Northeastern hometextiles Northeastern gathering– information Research and mechanisms Market intelligencecollectionwhich less exploitativebusinesspractices. throughtheintr should beeliminated infrastructure andtoensuresector establishaquality to andunderstanding, to buildawareness fair Organic and trade practices(pr branding Accreditation systems– to ensur right time” the“rightpr Support services to enable Market information&access – services andsupport Operational Photo 41: Raw Silk &NaturalPhoto 41:Raw Dye Stuff

to create and service demand for to createandservicedemand for e quality products and recognized e quality –to improveefficiencies is efficient and has timelyfeedback oduction, retailing and distribution) – oduction, retailinganddistribution)– agreement, exploitative practises exploitative agreement, oduction of alternate methods andoduction ofalternatemethods to informstrategicdecisionmaking to oduct tothe right market at the

Intervention Design 131 In selecting feasible feasible selecting In be implemented with is of opportunities and group, meetings with intervention designs and hailand Home-Textiles project and export opportunities.However, this project surveys further details on project surveys details on further r implementation, it is recommended om the constraints in the sub-sector sub-sector the om the constraints in entified that can activities of potential partners. lebe and not constrained by continuous or, ideas are still generic. hain actors to develop the based on the actual analys es, etc. and organises core es, etc. and Table 18: Intervention Ideas Intervention Ideas Table 18: representatives of value c interventions and shaping these ideas fo Textiles EU-Thailand Home that the servic specific markets, discuss in detail the contributions and primarily fr Ideas for interventions came next page: as depicted in the map as follows on the In consequence, 4 draft ideas were id inthe scope and guidelinesand EU-T the inthe scope of in EU which aim to make a clear impact range of draft ideas is a orderIn to remainconstraints. flexib changes within the sub-sect 132 Intervention Design Figure 30:ConstraintsintheSub-sector Intervention Design 133

Photo 43: Workshop on Processing of Eri Silk, here De-gumming Photo 42: Workshop on Processing of Eri Silk

Facilitate market entry to EU niche markets markets to EU niche market entry Facilitate for home textile supplies quality Improve processing SMEs Develop and reeling implement improved technology schemes and certifications Develop traceability

Intervention 3 Intervention 4 Intervention 1 Intervention 2 Intervention Detailed descriptions intervention each of will be given on the following pages. IV 4 IV 3 IV 2 IV 1 134 Intervention Design Clients intervention Funding of Partners Coordinator Service solution Expected impact IV 1:Facilitate marketentry toEUnichemarkets Exit strategy engagement Duration of Measures FGM Role ofEU-HT

• • 8 months • • • • • • • • SMEs,exporters Home textileproducing exporters EU-HT, FGM,contributions • • • EU-HT feedback specialized trade follow-upwithpostfair fairsand produc Facilitate exportersand • • Facilitate negotiations at sales point Facilitate participationina fortradefair Prepare ofproducingSMEs and exporters Raise awareness project period benefitsfrombe abletogain nichemarkets inpost Builds capacityofproducingSMEsand to exporters Initiates pilot activity Home textileexporters Home textilepoducingSMEs FGM Pre-processors &Home Home textileproducers exhibition promotion policy policy exhibition promotion on DEP integrateinformation exhibitions innichemarketsandrelated up engagement Producing SMEsandexporte findings and conclude impact andinterim measurements outbaseline Carry Facilitate post fair feedback - Increased revenue and value added valueadded and - Increasedrevenue - Increasedproductionvolumes - Access to proper markets market information - Improved

byproducingSMEsand

textileproducingSMEs nd exhibition attradefair nd exhibition ing SMEs to exhibitat rs intensifyandscale- niche marketintotheir

Intervention Design 135

SMEs and define specific SMEs and ue added (dyestuff, yarn, yarn, ue added (dyestuff, supplies (volume, quality)supplies (volume, rs, home textile producing uctuations in price uctuations by suppliers and producing ss, change of practice and lity sourcing of dyestuff, supplies intermediate products) intermediate products) - Improved productivity of producing SMEs need (max. 3 set-ups) service & developCheck feasibility of the business model Control and monitoring of deliverables Assess clients’ awarene Piloting service with FGM provides service in post- periodproject Alternative providers scaling-up are assessed for - Reduction of material shortages- Reduction of material and off grade volumes- Increased production yarn, (dyestuff, val and - Increased revenue activity Initiates pilot operatesand Implements projectin post pilot/service period Select interested producing Select interested pre-processors/suppliers and define deliverables (max. 3 groups) Match-making and agreements between pre- processors/suppliers and producingSMEs impact - Reduction of cost and fl - Reduction of - Improved consistency suppliers & input Pre-processors FGM TTC/THTI Home textile producing SMEs producing Home textile • • • 6 months • • natural fibres and intermediate products Pre-processors, input supplie SMEs • • • • • • Information service on qua EU-HT • • FGM, EU-HT, contributions SMEs •

Exit strategy Duration of engagement Measures FGM Clients Role of EU-HT Funding of intervention Coordinator Partners Service solution Expected impact Expected IV 2: Improve quality supplies SMEs textile producing for home quality IV 2: Improve 136 Intervention Design Clients intervention Funding of Partners Coordinator Service solution Expected impact IV 3:Developandimplement improvedreelingtechnology Exit strategy engagement Duration of Measures FGM Role ofEU-HT

• • • 12 months • • • • • • • homete Pre-processors, SMEs producing FGM, EU-HT,contributions • • • • EU-HT research stakeholders throughcontract with together development Reeling technology • • Check feasibility pre-processors technology to Develop, test,anddisseminateappropriate projects to newR&D theproject from Transfer lessonlearned scheme development Stimulates and manages Initiates pilot activity SMEs Home textileproducing Pre-processors Research units FGM Pre-processors Home textileproducing SMEs selected service providers by Tools, equipmentandtraining aredelivered development Partners contributeincash orkindtothe development technology informationforreeling FGM provide partners /chainactors Assures among that solution isof shared benefit providers withtechnology Stimulate demandandlink-up - Improved quality andcons - Improvedquality - Increased productivity and business performance businessperformance - Increasedproductivityand - Increasedproductioncapacity - Improvedreelinge - Reductionofcostandfl (volume, quality) (volume, quality) fficiency andreliability xtile producing SMEs xtile producing by pre-processors and bypre-processors uctuations inprice the reeling technology the reelingtechnology istency of silk yarn

Intervention Design 137

of pre-processors and ification of products ification of products vest in certification and certification and vest in producing/exporting SMEs and product certification and product certification supplies (volume, quality)supplies (volume, tion and certification bodies traceability schemes and y schemes and product schemes and y yarn, intermediate products) intermediate yarn, intermediate products) traceability schemes and cert traceability schemes - Improved consistency of - Improved consistency - Improved productivity of producing SMEs Develop capacity of related pre-processors and manufacturing SMEs buyersFGM has screened appropriate orders with in place and develops b2b relationships and decentralized bodies back-up THTI, Abs, CBs application of traceabilit Increased number of SMEs in traceability Initiates pilot activity activity Initiates pilot Cooperates with accredita Assures capacity development producing SMEs services Links the testing Survey select appropriate and certification and traceability schemes Stimulate demand driven certification Pre-processors & input suppliers & input Pre-processors volumes- Increased production quality (dyestuff, and - Increased revenue & value added (dyestuff, yarn, FGM IVN THTI product certifications Home textile producing SMEs producing Home textile through with customers communication - Improved shortage- Reduction of material & off grade supplies - Increased revenue & value added (finished products) • 18 months • • • FGM, EU-HT, contribution by Home textile producing SMEs • • • • • • • Manage quality satisfaction supplies and customer through traceability schemes EU-HT • • • •

Exit strategy Duration of engagement Measures FGM Clients Role of EU-HT Funding of intervention Coordinator Partners Service solution Expected impact Expected IV 4: Develop traceability schemes and product certifications traceability IV 4: Develop

138 Annexes 1 Annexes 11. 11.1 List of Interviews Listof Interviews 11.1

13 12 11 10 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14

9 8 7 6 5 4 3 2 1

K. Poonsub Tulapun K. Poonsub K. Ratta K. Lakkana K. SurachotTamcharoen K. PareuhatTamcharoen K. Pongpeera K. Amnuay Khusiricharoenphanit K. Sangwarn Teemui Wongprom K. Jaranya K. PrakongPasatiti Aomthaisong K. Sangduen Tiyajamorn K. Tidarat Weerapong K. Peerapan Khowadhana Dr. Siribenja K. SurachaiJinarakpong Sinsuwannakul K. Kanyanuch Palapleevalya K. Peeraporn K. Virat Thandaechanurat K. Nataya Boonvanno K. SumatePhunkaew K. SakchiraWiengkao K. ApisithPromyannont K. JirapornTulyanond Taagamnerd K. Chanpen K. PilanDhammongkol K. Akkarin K. KamolluckPanthasane Silppothakul K. Ladawan Saesangseerueng K. Nuengruthai K. Kwanruthai Puengthamsakda Tabpinthong K. Siladda K. StephenSalmon K. Suwadee Salmon K. NuntanaTangwinit K. UmapornChansirichoke Nilbanjong K. Phongsuda Respondents

Asia Dyestuff Industries Ltd. Asia Dyestuff Industries Co., Ltd. Fair Trade ThaiCraft Association ThaiCraft The Asia Institute Kenan 1 Centre Industry Promotion Promotion ofIndustrial Department Organisations/Companies HomeNet Ltd. Co., Dystar Thai Co.,Ltd. Thai Bayer Centre &Weavers Colour Dyed Natural Ban Na-Tang, Surin Centre, Sericulture Queen Sirikit UBICNew Entrepreneur Silk, Amnuay Foundation Khai Ban Reng Group Praepan Centre Hand-Craft Folk Na-Pho BanNaPho Pha Toomthong, SilkNet InstituteofSericulture Queen Sirikit Ltd. Co., Silk Avenue Co.,Ltd. Magic &MarsLogistics Centre Testing Textile Institute Textile Thailand Project Development Doi Tung Co.,Ltd. Classic Model Co.,Ltd. Baisri Creation Ltd. Co., Intertrade Promcharoen Centre Promotion Export group Sankangpla R.O.P. Thanapaisal Double StarIndustry Co.,Ltd. R.O.P. Thanapaisal Service ofScience Department

Annexes 139

3

(Good)

2 (Fair)

Scores

1

(Poor)

of Thai and Chineseof Thai and Silk Home

d out sub-sector stakeholders with and resource

ha per year)(vary widely by by widely ha per year)(vary

General Features Sub-sector

Thailand China Thailand

Competitive regional category CBI by a) Airfreight b) Seafreight Market Features EU Market Share (%) a) Air (hours) (days) Ship b) Transportation costs per kg to EU countries (EUR) Length of cocoon filament (meter per cocoon compensationHourly (inlc. rate & fringe wages benefits) labour for skilled / Logistics Supplies Distance to EU Retailers’ shelf Mulberry (tons per yield variety) Mulberry planted area (ha) Renditta of reeling (Productivity cocoons to rawsilk yarns) (kg of reeling cocoons/ kg of rawsilk) Benchmarks Production Rawsilk production (% or production)world

Benchmarks: Benchmarks: 11.2 Benchmarks Key Home Textiles Vis-à-vis of Thai Competitors Textiles persons in March- May persons in March- May 2007 Source: Own analysis based on interviews carrieSource: Own analysis 3.2 3.1 3. 2.2

2.1 1.6 2. 1.4 1.5 1.3 1.1 1.2 1.

140 Annexes 2.1 2. 1.6 1.5 1.4 1.3 1.2 1.1 1. 3.2 3.1 3. 2.2 etls Textiles persons in March- May 2007 Maypersons inMarch- Source: Ownanalysis carrie basedoninterviews Benchmarks:

Distance toEURetailers’shelf Supplies /Logistics forskilledlabour benefits) wages &fringe rate(inlc. Hourly compensation (meterpercocoon filament ofcocoon Length kg ofrawsilk) cocoons/ (kgofreeling yarns) rawsilk to cocoons (Productivity ofreeling Renditta (ha) area planted Mulberry variety) yield (tonsper Mulberry world production) (%or production Rawsilk Production Benchmarks by CBI category regional Competitive EU MarketShare(%) Features Market b) Seafreight a) Airfreight (EUR) costs perkgtoEUcountries Transportation b) Ship (days) a) Air(hours) Thailand India

General Sub-sectorFeatures General

ha peryear)(varywidely by

d out with sub-sector stakeholders and resource with sub-sectorstakeholders out d

of Thai and Indian SilkHome of ThaiandIndian

(Poor)

1

Scores

(Fair) 2

(Good)

3

Annexes 141

3

(Good)

2 (Fair)

Scores

1

(Poor)

of Thai and Vietnamese of Thai and Silk

d out sub-sector stakeholders with and resource

ha per year)(vary widely by by widely ha per year)(vary

General Sub-sector Features

Thailand Vietnam Thailand

EU Market Share (%) Competitive regional category CBI by a) Airfreight b) Seafreight Market Features Distance to EU Retailers’ shelf a) Air (hours) (days) Ship b) Transportation costs per kg to EU countries (EUR) variety) Length of cocoon filament (meter per cocoon compensationHourly (inlc. rate & fringe wages benefits) labour for skilled / Logistics Supplies Mulberry (tons per yield Mulberry planted area (ha) Renditta of reeling (Productivity cocoons to rawsilk yarns) (kg of reeling cocoons/ kg of rawsilk) Benchmarks Production Rawsilk production (% or production)world

Source: Own analysis based on interviews carrieSource: Own analysis persons in March- May persons in March- May 2007 3.1 3.2 3. 2.1 2.2 1.5 1.6 2. 1.2 1.3 1.4 1. 1.1 Benchmarks: Home Textiles Home Textiles 142 Annexes 1. Production by CBI regionalcategories 3.2 Competitive share(%) 3.1 EUmarket 3. MarketFeatures b)Seafreight a)Airfreight EU countries(EUR) kg.to 2.2 Transportationcostsper b)Ship(days) a)Air(hours) shelf EURetailer’s 2.1 Distanceto 2. Supplies/Logistics for skilledlabour wages andfringebenefits) (includes rate 1.6 Hourlycompensation (length inmeterpercocoon) 1.5 Lengthofcocoonfilament silk) kg.ofraw reeling cocoons/ of yarns)(kg. cocoons toraw silk reeling of 1.4 Renditta(productivity 1.3 Mulberryplantedarea(ha) year) (varywidely byvariety) 1.2 Mulberryyield(tonesperha production) world (%of production 1.1 Raw silk Key forScores

Benchmarks

More than25 More than60 Less than15 Less than10 Less than10 More than9 More than3 More than2 More than Less than Less than Low cost 1 (Poor) 100,000 hours days 500 0.3

Medium cost 40-60 hours 15-25 days 100,000- 500-800 500,000 2 (Fair) 0.2-0.3 15-30 10-20 10-15 7-9 2-3 1-2

More than30 More than20 More than15 Less than15 Less than40 Less than7 Less than2 Less than1 More than More than Less than High cost 3 (Good) 500,000 hours days 800 0.2

Annexes 143

2 1 1 2 1 2 1 400 10/1 1.14

35,000 (Native) 37.5-67.5 Thailand

3 1 1 2 1 2 1 9.15 700-

7.5/1

1,000 34-63 (Hybrid) 250,000 Vietnam

3 2 1 2 1 2 1

800-

1,000 11.33 35-65 8.77/1 (Multi- voltine) India 280,000

3 3 1 1 1 1 1

700-

1,300 71.13 15-22 (Hybrid) 626,000 5.55-6/1 China

Benchmarks

3.2 Competitive regional categories by CBI 3. Market Features 3.1 EU market share (%) b) Sea freight 2.2 Transportation costs per kg. to EU countries (EUR) a) Air freight b) Ship (days) 2.1 Distance to EU Retailer’s shelf a) Air (hours) 2. Supplies/Logistics 1.6 Hourly compensation rate (includes and fringe benefits) wages for skilled labour 1.5 Length of cocoon filament (length in meter per cocoon) 1.4 Renditta (productivity of reeling silkcocoons to raw yarns) (kg. of reeling cocoons/ kg. of raw silk) 1.3 Mulberry planted area (ha) 1.3 Mulberry planted 1.2 Mulberry yield (tones per ha per 1.2 Mulberry yield by variety)year) (vary widely 1. Production silk 1.1 Raw production (% of world production) 144 Annexes Source: Costums 2007 Source: Costums 13 ThaiSilkExports in2006Classifiedby HS.Code 11.3 5007: Woven fabrics of silk or ofsilk ofsilkor 5007: Wovenfabrics /yarnspunfromsilk 5006: Silkyarn waste, fromsilk 5005: Yarnspun notspunfrom 5004: Silkyarn, incl.silkyarn waste, 5003: Silk 5002: Raw silk cocoonssuitablefor 5001: Silkworm HS. Code waste for retailsale waste, putup not putupfromretailsale waste waste, etc. reeling

million) (EUR Value Export 12.53 0.60 0.03 0.22 9.14 0.03 0.39

Japan (90.93%),China(9.07%) UK (100%) Main Export Markets Spain (5.08%) UK(20.12%), USA (40.40%), (6.36%) (24.92%), Singapore Guinea PapuaNew Lao (53.04%), Switzerland (9.77%) Korea (65.65%),Japan(20.81%), Japan (6.94%) India(29.14%), Spain (54.45%), China (5.84%) Japan (67.53%),Italy(26.54%),

Annexes 145

rentiated products. hase of a product, to hase of a product, to s. Niche products haves. Niche these consumers. These ed by purchasers as high is of price. Consumers of interest is of price. Consumers of interest astic, it is still an important rkets for a particular product or for a particular product rkets he market wants. Critical to this is unity for home textile exporters to fferentiated mass of consumers. fferentiated mass of consumers. rely on economies of scale and cost ility for a relatively small number of ems whose primary value lies in ems whose primary value lies specialized, diffe specialized, the context of this report are given understand what the market wants, or ary demandor is for differentiation able opportunitiessmall producers. for nts. Producers need to identify and a limited numbers of purchasers. Mass a limited numbers of purchasers. meet customers’ needs at a competitive price. between production and purc portant consideration to ontrasted with mass market nd are priced accordingly. che products are perceiv Producers need to understand what they can produce exporting decision. ensure that can products Although niche markets are price inel consideration in any the use of information. as well as customer wa that the understandsteps all of the The key to success in this context is to is context in this to success The key may want, and ensuring to produce what t a special differentiated appeal to products have a broad appeal to the undi exploit a particular economy. service. Niche markets, where primservice. Niche markets, uniqueness, are understood as an opport c Niche markets are often Niche products can be defined as it Niche markets are specialized export ma Niche markets are Niche Markets differentiation and their particular suitab purchasers. Typically ni value and differentiated, a

Descriptions of key termsDescriptions of key used in as 11.4 Term Description Term 11.4 below. niche markets provide potentially profit Price is not the most im Price is not the most in niche markets are those who want in niche markets are those Mass products for mass markets usually Mass products for mass competeand largely onefficiencies, the bas 146 Annexes • • • • • • im labelling, exportation, production, the cover These standards Figure 11.4: Comparison of Mass and Niche Markets Figure 11.4:ComparisonofMassandNicheMarkets processes used thefinalend toproduce product. materi base Organic” from “Certified products, choosing organic restore, maintain practices that Itisbasedonmini biological activity. system that promotes an The USDAdefinesorganicas“A Organic residue testing Dual system of quality assurance products certified andnon-organic Maintain physical separation oforganic sites inproducing policyrequired Environmental effective inspection ofthe activities stepsmu All productionandhandling All inputshave tomeetbasicrequi Land isfreeofchemicals for

portation, and distribution. portation, and d enhancesbiodiversity, it isimportanttoknow a specificnumberofyears and enhance ecological harmony.” When When ecological harmony.” enhance and als and any potentially harmful finishing harmful potentially andany als n ecological production management management n ecologicalproduction consisting ofon- mal use of inputs and on management management on and mal useofinputs rement on toxicityandbiodegradable rement

st bewelldocumentedtoallowan processing, producing, packaging, processing,producing, The keycriteriaare: if the product wasmade iftheproduct biological cyclesandsoil

side inspectionand

Annexes 147 The fair trade is a The

the products, which trade also plays a crucial role crucial trade also plays a organisations from all over the sation (FLO), the Network of sation (FLO), the ovision of information on markets llholders at the bottom of supply llholders at consumers about global injustice consumers about global injustice ice, which covers the costs of ice, which covers private and public actors. international to It contributes trade. ool to build a social consumer ool to build a social consumer at changing the unfair commercial , the European Fair Trade Association hemselves democratically to protect hemselves democratically to protect mmercialisation of mmercialisation important the Internationalorganisations such as

he developed anddeveloping countries. This

movement pushing for change in global trading. in raising awareness among European It uses the FAIRTRADE Mark as a t Mark as a the FAIRTRADE It uses Fair trade is being widely recognizeda key tool for sustainable as development and poverty eradication. Fair chains. sustainable production and a Fair trade premium for investment in social development projects. It helps producer groups organise t their rights. It empowers producer groups through pr and supply chains. of and about the social responsibility There is a focus on disadvantaged sma Producers receive pr a fair and stable come from the Third World. It aims transactions between t bymovement is promoted Fair Trade Labelling Organi (EFTA), the European World Shops (NEWS), etc. Federation for Alternative Trade (IFAT) movement promoted by non-governmental world, which are engaged in the co • • • • • • Key - and unique - aspects of Fair trade are: Key - and unique - aspects of Fair

sustainable developmentoffering by trading better to, and conditions producers and of, marginalized securing the rights workers. Fair trade is a trading partnership based on dialogue, transparency and that seeks greaterrespect equity in Fair Trade Fair Trade 148 Annexes and theirfamilies;nodi and industrystandards besufficient Compensation: Compensation: specified inLabour ProtectionLaw. overtimepaidatapremiu voluntary perweek than 48hours with atleast one Working Hours: abuse orsexualharassment. Discipline: orientation, un disability, gender,sexual Discrimination: me facilitateparallel freedoms, these andbargai right toform/jointradeunions andRi Freedom ofAssociation detect threatstohealthand safety;ac regularsteps health to preventinjuries; Health andSafety: ofdepositsoridentitypapers no lodging Forced Labour: outside ofthe workplacethatar und and over15 workers(age young expose Child Labour: : Brief overview Occupationalsafety,healthandenvironment. relations and Kingdom,t Constitution ofRoyalThai theabovest TLS 8001isdraftedunder practice inthe ethicalmanufacture forcompaniesto a majoropportunity goods, madein companies ofanysize, any verifica framework fortheindependent rights ofworkersandisthefirstaudit 8000 isacommonstandardforcompanies andtheUNConvention of HumanRights instruments humanrights international Based onconventions oftheInternat protectionofworkers’rights. set of auditable standards andani set ofauditable standards of SocialAccountability8000 development The CouncilonEconomicPriorities BasicIntroduction–TLS8001-2003 11.5 No corporal punishment, mental or physical coercion, verbal punishment, mentalor No corporal physical coercion,verbal Noworkersundertheageof15; the company shallnot No discrimination based on race, caste, origin,religion, onrace, Nodiscriminationbased No forced labour, including prison or debt bondage labour; labour; ordebtbondage includingprison Noforcedlabour, Comply with the applicable law but, in any event, no more lawbut,inanyevent,no more Complywiththeapplicable Wages paid for a standard work Wages work paid for a standard Provide a safe and healthy work environment; take environment;take work a safeand healthy Provide sciplinary deductions. e hazardous, unsafe, or unhealthy. unsafe,orunhealthy. e hazardous, ght toCollective Bargaining: ndependent auditing processforthe auditing ndependent and supply of the goods theysell. supplyofthegoods and m rate and not to exceed the hours as m rateandnottoexceedthehoursas ans of association and bargaining. ofassociationans andbargaining. able social standard. SA8000 provides a SA8000provides able socialstandard. he Labour Law, Labour welfare, Labour welfare,Labour Labour Law, he Labour cess to bathrooms and potable water. cess tobathroomsandpotable ional Labour Organization and related and related Organization ional Labour demonstrate theircommitment to best Accreditation Agencyhasdriventhe and safety worker training; system to systemto andsafety worker training; ion or political affiliation, orage. ion orpolitical - including theUniversalDeclaration tion ofthe ethicalproductionofall by employersoroutsiderecruiters. to meet the basicneedofworkers day off for every seven-day period; period; seven-day offforevery day andards andtheprovisionsof n collectively; where law prohibits lawprohibits n collectively;where (SA8000) asystemthatdefines a on the Rights of the Child -- SA on theRightsof Child--SA where intheworld. It willprovide seeking to guarantee the basic thebasic seekingtoguarantee er 18 years)tosituationsinor er 18 week must meet the legal week must meet thelegal Respectthe Annexes 149

eting problems can mean that are often supplied by the sponsor contract (extra-contractual

Contracted farmers may faceContracted farmers may land constraints due to a lack of security of tenure, thus jeopardizing sustainable long-term operations Social and cultural constraints affect farmers’ ability to may produce to managers’ specifications Poor management and lack of consultation lead farmers may with to farmer discontent sell outside the Farmers may marketing) thereby reducing processing factory throughput divert inputs suppliedFarmers may on credit to other purposes, thereby reducing yields Contract farming small farmers is more politically acceptedwith than, for example, production on estates Working small farmers overcomes landwith constraints Production is more reliable open-marketwhen purchases and the sponsoring company faces less not being responsible risk by for production More consistent quality can be obtained than if purchases were made on the open market Farmers’ price risk is often reducedas many contracts specify prices in advance Contract farming can open up markets new which otherwisewould be unavailable to small farmers Particularly growing crops, farmer new when the risk of both face market failure and production problems Inefficient management or mark quotas are manipulated so that all contracted production is purchased Sponsoring companies may be unreliable or exploit a monopoly position The organisations staff of sponsoring be may corrupt, particularly in the allocation of quotas Inputs and production services This is usually done on credit through advances from the sponsor Contract farming often introduces technology new and also enables farmers to learn new skills

• • • • • • • • • • • • • • • • • •

11.6 Advantages & Disadvantages of Contract Farming Disadvantages Enterprises (Sponsor) Advantages Disadvantages Advantages Farmers 150 Annexes Tel: (66-2) 7135492, Fax: (66 2) 712 1592-3 www 2) 7121592-3 (66 Fax: (66-2)7135492, Tel: Thailand 10110 Bangkok Klong-toey, Rama Phrakanong, 4Road, Soi Trimit, h apesz o etn sne Thesamplesizefortesting isneed4m is5-7workdays Leadtimeoftestingprocess Textile TestingCosts

Item 17 ListofHomeTextileTesting 11.7 4 3 2 1

eak: h rc sicuigPletryr yarn Remarks:ThePriceisincludingPolyester

Dimensional Stability to washing (1 wash) Heavy Metal Formaldehyde Content PH Value Azo Dyestuffs Threads perUnitLength Fiber Composition(2Components) Care LabelRecommendation toWashing Color Fastness toperspiration Color Fastness toHotPressing Color Fastness toDryCleaning Color Fastness Test) Bleach (Spot toChlorine Color Fastness with laundering (whenitem 5) Appearance after perform

Co Cr(VI) Cr Cd Pb Polyester Blend Fiber Natural/Synthetic Testing List

.thaitextile.org email: [email protected] email:[email protected] .thaitextile.org Grand Total Price Vat 7% Total 1,350.00 400.00 5,000.00 3,000.00 956.20 13,660.00 310.00 600.00 350.00 320.00 390.00 370.00 400.00 300.00 220.00 450.00 600.00 800.00 600.00 600.00 600.00 UnitPrice 14,616.20

Annexes 151 cators of Textile of Textile cators ia-Pacific Human Institute of Development Institute Studies, l Product Declaration”,l Product Institute of 4: Environmental Indi in Thailand”, Website, Ban Reng Khai Reng KhaiBan Website, 2007 (http:// icals (REACH)”, Lowell Centre for icals (REACH)”, and Furnishing Textiles Market in the lated Skin Conditions”, Safety and Skin”, Disabled Living Foundation, 2006 and Clothing”, As for Prevention Washington State for iland” Ban Reng Khai Website, 2007 egy”, Newfoundland and Labrador, 2002 e University 2003 of Technology, USA & UK Markets”, Prepared & UK Markets”, Prepared for CCDI USA by Kaiser Associates, 2003 by Kaiser Associates, ndustry”, Larry D. Qiu, 2005 .com/pages/village.html) /pages/lea_silk.html) on Database, August 2006 CBI, cess Guild for the Western Cape Crafters: Guild Home cess Products for ISO (Type III) EnvironmentaISO Products for Tamper Fibre Materials Science, “CBI Market Survey: The Household Informati EU”, CBI Market in Europe Set New Worldwide“Chemicals Policies Standard Registration, Evaluation and Authorization of Chem Sustainable Production, 2003 “China’s Textile and Clothing I “Clothing Dermatitis and Clothing-Re Research and Health Assessment Department of Labor and Industries, 2001 “Clothing for People with Sensitive “Countdown to REACH”, Deloitte, 2007 “Craft Industry Development Strat Development, 2006 “AUTEX Research Journal, Vol. 3, No. 11.8 Sources “A Handbook Chain Research”, for Value Sussex, 2001 University of Market Ac “A Practical in the Textile & Soft Furnishings (Cape & Design Institute) Craft Silk Weaving Project“A Unique Village 2007 (http://www.banrengkhai in Thailand” “A Unique Silk Production www.banrengkhai.com/pages/silk.html) Tha Product in “A Unique Léa Silk (http://www.banrengkhai.com “Adjusting to a New Era for Textile 152 Annexes Consulting International, 2005 Consulting International,2005 forthe NorthEastTha “Final Report FibresofHand-spi “Favourite “Fact Sheet: Home Textile”,T Database, 2007(http://www.cb in “EU Legislation:FlameRetardants 2003 AnIntroduction toEc “Export Quality: 2007 Entrepreneur, “Export ProspectsofSilk and Silk Craft&DesignInstitute, Cape Report)”, 2003 Analysis: Opportunity “Export Market &Design Cape Craft Institute, 2003 Symposium CancunMexico, “ExportDevelopmentPilotProgra 2005 Bureau(EEB), Environmental toREACH”,European PolicyReformCountdown Chemicals “European the PromotionofImports fr Outerwearin “EU Market 2005: Survey Promotion ofImports from GiftsandDeco “EU Market 2005: Survey studyteam, October 2004 and MTIjoint ExportMa Product “Ethiopian Handloom Commission, 2006 European FactSheet:Reach-a “Environment “Economic andIndustrySi “Eco TextilesSummary”,GrolinkAB, 1999 “Eco-Textiles”, IntertekLabtest, 2004 with Eco-label,2002 “Doing Business the EU”,European Associates, 2005 “Craft SecondPaper:PolicyRecommendati Developing Countries,2005 Developing tuation”, Research Department, IFCT,tuation”, ResearchDepartment, 2004 om Developing Countries, 2005 Countries, om Developing nners”, Siobhan nic Dhuinnshleibhe, 2005 nners”, SiobhannicDhuinnshleibhe, hai TextileInstitute,2007 i.nl/marketinfo/cbi) BasedProducts”,ScienceTech mme”, Report on FairTradeand mme”, Reporton iland Silk Value Chain Study”, Agrifood iland Silk Value Chain Study”, new chemicals new policy fortheEU”, Textiles”, CBIMarket Information o-labelling”, International Trade Centre, o-labelling”, InternationalTrade Western Cape CraftIndustry(Interim Western Cape cluding Leather Garments”, Centrefor Garments”, cluding Leather rket Study”, AddisAbaba, Femseda rative Articles”,Centreforthe ons and Interventions”, Kaiser Interventions”, ons and Annexes 153 outh Africa Department, outh Africa in Textiles”, CBI Market Information Information CBI Market Textiles”, in Textiles”, CBI Market Information CBI Market Textiles”, Development Manual”, International ammoniated FAO (http:// rice straw”, rol (IPPC): Reference Document on rol (IPPC): ropean Colour Industries”, Sophied, silk”, Sam Hober Website,silk”, Sam Hober 2007 (http:// na Internet Information Centre, 2002 na Internet Information Centre, 2002 mmercial Service Germany, July 2005 Germany, mmercial Service and RequirementsCountries on in EU of Textile and Jute, Bangladesh, 2005 of Textile and Jute, Bangladesh, FAO Agricultural Services, 1999 FAO Agricultural Services, 1999 search Centre for Environment and Textiles Industry”, European Commission, ternational Trends in Production and sity (gis.agr.ku.ac.th/.../html/ sity he Rural Industries Research and he Rural Industries Research i.nl/marketinfo/cbi) i.nl/marketinfo/cbi) i.nl/marketinfo/cbi) i.nl/marketinfo/cbi) tegy”, Trade and Industry S Database, 2007 (http://www.cb “Handicraft and Business Sector Design Labour Organization, 2006 “Home Textile”, Andrea Stahl, U.S. Co Sangdao“How to make our Thai Shot www.samhober.com/silkmaking/howtomakesilk.htm) Environmental Standards “Impacts of Policy Re China’s Textile Industry”, Economy, 1999 “Integrate Pollution Prevention and Cont AvailableBest Techniques for the 2003 “Local Textiles”, Kasetsart Univer Lesson03/3.html) “Mulberry leaf supplement for sheep fed www.fao.org/DOCREP/005/X9) “National Silk Policy - 2005”, Ministry “Novel Sustainable Bioprocesses for Eu 2004 “Sector Development Stra “France Legislation:“France Retardants Flame in 2007 (http://www.cb Database, Retardants“Germany Legislation: Flame 2006 Unravelling”, Chi Prospect “Silk Export “Silk Production in Australia”, T Development Corporation, 2005 “Silk Reeling and Testing Manual”, “Silk Review 2001: A Survey of In Trade”, International Trade Centre, UNCTAD/WTO, 2002 Update”, 2006 IDBI Capital, “Silk Sector 154 Annexes Lotharukpong, International International Lotharukpong, of Thailand’sTextile “The Future Uzbek SilkAssociation,2005 “The InvestmentPotentialofSilkIndus Institute, 2004 Methakunnavut, Nuntaporn Jitsuchon and Income Countries:The Case of of PublicInvestm “The Importance Studi ofSistemaModaItalia,2004 Area Centro Industry Textile “The Home/Furnishing www.banrengkhai.com/p 2007http:// KhaiWebsite, BanReng “The Foundation” TheFlower,2006 Eco-Label”, “The European Dani Health”, “The EUEco-labeland Commission 1996 Union”, of theEuropeanCommunities, in theEuropean of “The Competitiveness Subcontracting (NCTO),2004 Textile Organizations Councilof Trade”,National apparel Textileand ThreattoWorld “The China “Thai TextileIndications”, T “Thai Silk”,Department of “Thailand’s FashionIndustry”,T “Thailand’s Office,2006 EconomicMonitor”,WorldBankThailand “Thailand Technologists of Macedonia, SsCy “Textile StructuresforTechnical Te O Clothing Industry”, “Textile and Investment, 2002 Clothing”,EU-IndiaJoin “Textiles and 2004 Economic andSocialDevelopmentBoard, ThailandCompetitiveness “Summary of ages/foundation.html ages/foundation.html Agriculture Extension,2002 hailand Textile Institute, hailand Textile 2005 Chamber ofCommerce,2003 Chamber hailand boardofInvestment,2004 hailand and Garment Industry”, Chalumpon Chalumpon andGarmentIndustry”, Somchai Thailand”, Fan,Shenggen, ffice ofIndustrial Economic, 2004 ent for Reducing PovertyinMiddle- ent forReducing xtiles”, Bulletin of theChemistsand ril and Methodius University,2004 ril and Methodius sh Ministry of the Environment, 2006 sh Ministryof the Environment, t Initiative for Enhancing Trade and t Initiativeforand Enhancing Trade try of the Republic ofUzbekistan”, try oftheRepublic in 2003-2004”, PittiImmagineGasa, in 2003-2004”, Matrix”, Officeof the National in theTextileandClothingIndustry International Food and Research International Foodand Annexes 155 (www.thaicraft.org/ r the Improvement of Living and Bright Future”, Thailand’s Board of Thailand’s Bright Future”, Development Board and the World Development Board and the World lberry and itsfor Animal Potential rtment of Industrial Promotion, 2002 rtment of Industrial ment of the Silk Sector in Sector in Silk ment of the s Industrial Development Organization s Industrial ts on the Market”, AEA Technology Technology AEA on the Market”, ts Production Officer Animal Production pment Report”, Report of Joint h Asia”, Saman Kelegama and Bilesha at Prospects for Upgrading at Prospects by he EU”, Werner Stengg, Enterprise ft Association, 2007 ft Association, 2007 Textiles” CBI Market Information Market Information Textiles” CBI (www.fao.org/docrep/005/X9895E/ “The Global “The Global Apparel Value Chain: Wh Developing Countries?”, Nation United 2003(UNIDO), The ThaiCra “The Story of ThaiCraft”, new/about-us.html) Baseline to Derive Environmental of Eco-label Criteria “The Suitability Produc Applicable to all Requirements Plc., 2003 Clothing“The Textile and Industry in t Directorate-General, European Commission, 2001 Depa Thailand”, Industry in Textile “The “ThaiCraft Fair Trade”,2007 The ThaiCraft Association, (www.thaicraft.org/new/tc-fair-trade.html) Designing Fashion Industry a “Thailand’s Investment, 2006 Develo “ThailandNortheast Economic and Social National Economic Thailand’s Bank, 2005 “Trade in Textiles and Apparel in Sout Weeraratne, 2005 “Trends and Drivers of Change in the and Leather EU Textiles Sector: Mapping Report”, European Foundation fo Working Conditions, 2004 “UK Legislation: Flame Retardants in Database, 2007 (www.cbi.nl/marketinfo/cbi) “Value-Chain cum BDS Market Assess Bangladesh”, 2005 GTZ-Progress, “World Distribution and Utilization of Mu Feeding”, Manuel D. Sánchez, Animal Rome and Health Division FAO, x9895e02.htm) 156 Annexes www.salamaithai.com www.wto.org www.usda.gov www.thaitextile.org www.qsilk.net www.industry.go.th www.ibef.org AgricultureStat www.fao.org www.doa.go.th www.doae.go.th www.dip.go.th www.depthai.go.th www.customs.go.th www.cbi.nl Websites: www.jimthompson.com www.jimthompson.com www.qthaisilk.com www.thaitextile.org/TSA/

istical Database(FAOSTAT) Acknowledgements 157 Research andResearch Development (IST)

Print Blue Print Design Layout Ms. Petra Erbe Proofreading Mr. Chris Catto-Smith Funding Union by the European was co-financed The project Asst. Prof. Dr. Chirawan Chaisuwan Prof. Dr. Asst. Photography namely: Chiang Mai University, and from FBA, Ms. Kotchakorn Moonta Mr. Worn Donchai Mr. Nakorn Sarawana namely: Mai University, Chiang from IST, Kasemset Assoc. Dr. Chesada Dr. Astrid Faust Mrs. Nittaya Mahachaiwong Bloemen Mr. Wim Mr. Surachai Leewattananukul Ms. Siripun Charleanchaimonkon Wattanakool Ms. Usakorn Mrs. Duangtar Novacek Kongngam Ms. Nipasak Mr. Amnuay Wattanakornsiri Ms. Piyachat Kriwanit Mr. Rattapon Panjaruang Ms. Nanthana Kongkamin Ms. Juthamas Suparatwarakul Ms. Phakwilai Sahunaru Ms. Ketsuda Karakan was contributors produced by The study Publisher TechnologyScience and for Institute Chiang Mai University Acknowledgements Ms. Traci Morachnick 158 Address [email protected] [email protected] E-mail: 942476 +6653892224, Fax.: +66 Tel.: 53942476 THAILAND ChiangMai50200, P.O. Box 111,ChiangMaiUniversity, or THAILAND Mai50200, AmphoeMuang,Chiang TambonSuthep, Road, 239 Huay-kaew Chiang MaiUniversity Institute for Science andTechnology Address

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Research and Development (IST) Development Research and Research and Development (IST) Development Research and e oftheInstitut the official opinion of the European theEuropean of the officialopinion nancial assistance of the European e for Science and e forScienceand