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Logo of Phnom Penh Post newspaper Phnom Penh Post - Silk industry hit by downturn

Silk industry hit by downturn

090326_14.jpg
090326_14.jpg

Export- and tourist-dependent industry sees demand plummet, with

vendors worrying about bankruptcy as tourism decline leads to fewer

sales.

Photo by:
Sovann Philong

A worker weaves silk at a factory in Takeo province. The industry says it has seen a downturn. 

SILK producers and vendors say they face bankruptcy with sales down as much as 80 percent over the past few months in the face of the global economic slowdown.

The luxury product has enjoyed good growth in recent years - particularly due to the boom in the tourist market.

Som Chenda, the public relations officer for the Artisans Angkor outlet in Siem Reap, told the Post on Sunday that business at his store in the country's tourism capital was down one-fifth on last year.

He said the first hit was due to fighting between Cambodian and Thai troops last year, which was followed by the slump in the world economy. He said all silk shops in Siem Reap were reliant on tourists.

"All of us focus almost entirely on orders from outside the country - and if tourists stop coming, we will lose business," Som Chenda said. "Our business depends heavily on the international market and tourists, so I am very concerned that many Khmer people at my firm could lose their jobs."

All of us focus almost entirely on orders from outside the country.

He said that clients from the United States, France, Germany, Korea, Taiwan and Japan had stopped buying, and the Singapore outlet of Artisans Angkor recently went bust.

Men Sinoeun is the executive director of the Artisans Association of Cambodia, a training and trade body with 2,000 members that  last year generated US$2.7 million revenue. His organisation represents 80 percent of the country's silk weavers.

"Silk sales dropped between 20-40 percent in the second half of last year because there were simply no new customers - and the old customers stopped buying because of the global crisis," he said.

Vendor Mam Ros Chamroeun, owner of the Asian Silk Souvenir Shop in Phnom Penh, has felt that even more sharply. He said monthly sales had plunged from $2,000 to $2,500 in mid-2008 to just $400 to $500 last month.

"My businesses can be kept alive by orders that I get from customers living abroad, and especially from tourists," he said. "But if the global economic crisis remains bad ... and tourist arrivals continue to drop, our businesses will go bankrupt."

Another vendor Chin Sophy, who has a stall at the capital's Russian Market, agreed a key problem was fewer tourists.

"If tourism doesn't recover fast my business could go bust," she said, adding that revenues were down 40 percent.

Kong Vantha, 43, is a small manufacturer weaving silk in Koh Dach village, Kandal Province. He is worried that bankruptcy could hit him and his fellow villagers.

"It's really hard to sell silk as the price has gone down. Some silk producers in my village have gone bust, and the rest are trying their best to keep going," Kong Vantha said.

He estimated that the global crisis had cost him 30 to 40 percent of turnover.

The bleak assessment was shared by Chan Sophal, president of the Cambodian Economic Association, who felt the unstable property market had to shoulder some blame. He said the economy still faced problems: "Businesses will close or perhaps delay making products if this bad economic situation continues."

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