Thai Home Textiles Value Chain Analysis

Value Chain Analysis for Thai Home Textiles
Silk Sub-sector
EU-Thailand 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
Table of Contents
Table of Contents
1.
Introduction
1.1
Background & Rationale of the Project
1.2
Project Approach
2.
Basic Sub-sector Features
2.1
Background of the Development of the Silk sector in Thailand
2.2
Government policies for the Silk Sub-sector
10
2.3
General Issues - Silk
12
2.4
Features of Silk
17
2.5
General Issues - Home Textiles
26
2.6
Features of Home Textiles
28
3.
Market Analysis
32
3.1
World Production & Trade
32
3.2
Demand & EU Market
35
3.3
Thailands Export Market
42
3.4
Future Trend
48
4.
Industry Structure
51
4.1
Silkworm Egg Suppliers
52
4.2
Rearers
55
4.3
Reelers
59
4.4
Yarn & Fabric Traders
60
4.5
Dyers
60
4.6
Weavers
61
4.7
Printers
62
4.8
Home Textile Producers
62
4.9
Trading Agencies / Exporters
64
4.10 Traders / Domestic Wholesalers
64
4.11 Local Retail Outlets
65
4.12 Supplying Industry
66
Related Institutions & Efforts
68
5.1
Institutions
68
5.2
Private Organizations
75
5.3
Government Initiatives taken to promote the Silk Sub-sector
78
6.
Value Chain Analysis
80
7.
Competitive Advantages & Sector Strategies
84
7.1
General Review in Thailand
84
7.2
Competitive Analysis
91
7.3
Summary of Competitors
94
7.4
Competitive Strategy
99
8.
Constraints & Opportunities
102
8.1
Rearers
102
8.2
Pre-processors
106
8.3
108
8.4
Trading Agencies / Exporters
109
8.5
Sector-wide Issues
111
9.
Sub-sector Constraints / Opportunity Analysis
117
10.
Intervention Design
120
10.1
Introduction & Background
120
10.2
Provision of & Satisfaction with existing Services
121
10.3
Initial Scope & Ideas for Intervention
127
11.
Annexes
138
11.1
List of Interviews
138
11.2
Key Benchmarks of Thai Home Textile vis--vis Competitors
139
11.3
Thai Silk Exports in 2006 classified by HS. Code
145
11.4
Term Description
150
11.5
Basic Introduction - TLS 8001-2003
151
11.6
Advantages & Disadvantages of Contract Farming
154
11.7
List of Home Textile Testing
155
11.8
Sources
156
Table of Contents
5.
Abbreviations
4
CBI
CDD
Centre for the Promotion of Imports from Developing countries

Community Development Department
CDSC
Craft Design Service Centre
CIF
CMU
CTS
Customs
DEP
DIP
DOA
DOAE
DSS
EC
EFTA
EU
EU-HT
EUR
FAO
FAOSTAT
FBA
FDI
FGM
FLO
FMC
FOB
FTA
GAP
GDP
GMO
Ha
HS
IBEF
IFAT
IP
IPC
Cost, Insurance and Freight

Chul Thai Silk Company Limited
Department of Customs
Department of Export Promotion
Department of Industrial Promotion
Department of Agriculture
Department of Agricultural Extension
Department of Science Service
European Community
European Fair Trade Association
European Union
EU-Thailand Home-Textiles Project
EURO
Food and Agriculture Organisation
FAO Statistical Database
Faculty of Business Administration
Foreign Direct Investment
Fai Gaem Mai
Fair Trade Labelling Organisation
The Netherlands Development Finance Company
Free-on-Board
Free Trade Agreement
Good Agricultural Practices
Gross Domestic Product
Genetically Modified Organism
Hectare
Harmonised Standards
India Brand Equity Foundation
International Federation for Alternative Trade
Intellectual Property
Industrial Promotion Centre
ISO
International Standard Organisation
IST
JICA
KENAN
Kg
KPI
Institute for Science and Technology, Research and Development

Japan International Cooperation Agency
Kenan Institute Asia
Kilogram
Key Performance Indicators
Million
MM
MOAC
Millimetre
Ministry of Agriculture and Co-operatives
MOC
Ministry of Commerce
MOST
Ministry of Science and Technology
MRL
Maximum Residue Level
MTEC
National Metal and Materials Technology Centre
NEED
Northeastern Economic Development
NESDB
National Economic and Social Development Board
NEWS
Network of European World Shops
NGO
Non-Governmental Organisation
NSO
National Statistics Office
NSTDA
National Science and Technology Development Agency
OAE
Office of Agricultural Economics
OBM
Original Brand Manufacturing
ODM
Original Design Manufacturing
OEM
Original Equipment Manufacturing
OIE
Office of Industrial Economics
OTOP
One Tambon One Product
PR
Public Relations
QSIS
The Queen Sirikit Institute of Sericulture
R&D
Research and Development
SGS
Societ General de Surveillance
SME
Small and Medium sized Enterprises
TCDC
Thailand Creative and Design Center
TFIA
Council of Textile and Fashion Industries of Australia Limited
THTI
Thailand Textile Institute
TTC
Textile Testing Centre
UAE
United Arab Emirates
UK
United Kingdom
UNCTAD
United Nations Conference on Trade and Development
US
United States
USDA
United States Department of Agriculture
VC
Value Chain
WB
World Bank
WTO
World Trade Organisation
Abbreviations
MIL
1.
Introduction
1.1 Background & Rationale of the Project
This project was commissioned in order to:
provide an updated overview of the actual situation of the Thai home

textiles* sector and its competitiveness;
develop an insight into Thai home textiles and accessories sub-sectors,

the main players (farmers, processing SMEs and exporters), and a
breakdown of generated value;
identify untapped opportunities and constraints along the supply chain;
collect and analyse valid baseline data;
develop intervention ideas for public and commercial service solutions;

and
mobilize the concerned stakeholders for cooperation with the project and
for the validation of findings.
The study will be the basis for proposing interventions designed to overcome
the identified gaps and implementing those interventions decided upon jointly
with stakeholders.
Introduction
1.2 Project Approach

The study comprised two key steps:
1.
Information gathering and analysis
2.
Validation workshop and report finalisation
This study covers home textiles:

Household textiles include blankets, bedspreads, towels, etc.
Furnishing textiles include curtains, decorative items, etc.
Accessory textiles include scarves, napkins, etc.
Step 1
(15 March 2007 23 April 2007)
The analysis of the silk home textiles value chain was conducted based on a
combination of:
reviewing primary and secondary material;
conducting Bangkok-based meetings, interviews and discussions with
industry stakeholders, representatives of public agencies and institutes,
yarn/fabric producers, home textiles producers, traders/exporters, and other
key informants;
performing site-based interviews in the Northeastern provinces with chain
actors (rearers, reelers, yarn dyers, handloom weavers, home textile
producers, traders/exporters), local authorities and representatives of the
academic sector.
Beside Bangkok, the majority of interviews were conducted in Khon Kaen,

Nakorn Ratchasrima, Chaiyaphum, Roi Et, Buriram and Surin, which are the
main production areas of silk home textiles (see Annex 11.1 for a full list of
interviews).
Step 2
(24 April 2007 15 June 2007)
The main results of the value chain analysis were presented to stakeholders
from Bangkok, Nakorn Ratchasrima, Khon Kaen, Chaiyaphum, Roi Et, Buriram
and Surin to:
validate the main findings of the sector map, the value chain analysis on
national and local trends;
develop a sub-sector strategy together with the stakeholders;
Additional validation was sought from domestic and international stakeholders.

Resulting from these two steps; strategies, draft interventions
recommendations have been developed and are presented in this report.
and
Key term descriptions used in the context of this report; niche markets, organic
and fair trade, are provided in Annex 11.5.
Introduction
assess opportunities and constraints as a basis for the development of

intervention opportunities.
2. Basic Sub-sector Features

2.1 Background of the Development of the Silk Sub-sector in Thailand
Sericulture* or silk production has been practiced in Thailand for several

centuries. In 1861 King Rama V made the first attempt at promoting sericulture
in Thailand by establishing a trial production facility near to the city of Bangkok.
The Royal Thai Government hired a Japanese expert to promote education and
research on all aspects of sericulture. The work of the trial station was
supported by several sericulture schools in the Northeastern region, which has
a strong tradition in sericulture. As a result of these activities, sericulture
became well established as an occupation for many farming households.
Photo 1: Mural in Thai House
Unfortunately by the early decades of the twentieth century, interest in

supporting sericulture had faded. As a result, both production levels and quality
standards declined, even though many sericulture farmers continued to
produce silk for their private use. In 1932, the Royal Thai Government tried to
revive the industry by constructing a reeling factory but it was not successful
because farmers lacked the proper technical knowledge and the good quality
silkworm varieties that would have been necessary to deliver reliable quantities
of good quality cocoons. Another industry recovery attempt was made in 1941
by the Department of Agriculture and Fisheries, but again with little success.
* Sericulture is the rearing of silkworms for the production of raw silk.
Rapid changes began to occur during the 1950s and 1960s, a retired secret
service agent named Jim Thompson, who had permanently settled in Thailand,
began working with local silk producers. He identified key designs, imposed
strict quality control and began marketing Thai silk to the tourist and export
markets. He established large-scale production facilities using fly-shuttle
handlooms and high-quality white
warp yarn in setting his looms.
Since then a number of other
private companies have committed
themselves to promoting and
developing Thailands silk industry,
and several government
departments, provide sericulture
farmers with support in the form of
technical training, improved
varieties of mulberry and
silkworms, and improved
equipment such as reeling
machines (NEED, 2006).
At present about 200,000 village

households produce silk in various
Photo 2: Shuttle on Handloom
forms. Most of these villages are
in the Northeast of Thailand. They
mainly rear native yellow
silkworms, reel yarn by hand, and then weave their yarn on traditional
handlooms. Traditionally women predominantly, but not exclusively, carry out
sericulture. However, men and women share the work fairly equally when
sericulture is practiced on a commercial basis as the main source of income
for the household.
As high-end silk exports grew, the

Department of Agricultural
Extension began a breeding
program to reduce dependence on
imports of exotic white silk. They
succeeded in producing a hybrid
silkworm by crossing the native
yellow silkworm with exotic white
varieties from Japan. The resulting
yellow hybrids roughly doubled
yarn yields per cocoon while at the
same time retaining the knobbly
texture for which Thai silk is
known.
2.2. Government Policies for the Silk Sub-sector
The Ministry of Agriculture and Cooperatives (MOAC) has formulated its fiveyear strategy plan for 2005 - 2009. There are four strategic issues for silk
handcrafted development, which are discussed below.
Strategy 1: Local silk yarn promotion

For local silk production the MOAC will emphasize the following:
Promote sericulture as an occupation for farmers, particularly in the
Northeast where there is a strong tradition of sericulture and where there are
limited alternatives for income generation.
Preserve and protect the Thai silk handcrafted sector as a national asset.
Encourage an increase of production of silk yarn so that domestic demand

can be met with less dependence on imports.
10
Strategy 2: Improving standard of silk yarns and silk products

For product improvement the MOAC will emphasize the following:
Increase productive efficiency by providing good varieties of mulberry,
silkworm and transferring technology to producer groups.
Reduce cost of production by developing proper knowledge and good
management.
Conduct research work by developing high-yield (mulberry, silkworm),
modern technologies for Thai silk product, reeling and weaving equipment
suiting local conditions.
Strengthen farmer groups who have special knowledge for production.
Develop production models for niche market products.
Establish a basic standard system for local Thai silk yarn.
Strategy 3: Diversity of silk products development

To ensue diversity of silk product development, the MOAC will prioritize the
following:
Develop diversity of silk products in terms of products, patterns, and
packaging.
Improve production technologies as well as modern, flexible design
methods, so producers can respond quickly to changes in fashion and
consumers needs.
Establish both short term as well as long term product R&D for all supply
chain and marketing of silk handcraft sectors, in response to future market
developments.
Promote and protect local wisdom by establishing property rights in terms of
brands, licenses, provincial and geographic characteristics, etc.
Strategy 4: Promote and strengthen Thai silk handcrafted sector
Join road shows and exhibitions in the country as well as internationally to

introduce and distribute unique Thai silk products to these markets.
Develop recognized brands for unique Thai silk products to reinforce
consumer confidence.
Promote Thai silk products as both natural and environmentally friendly
products.
Improve the efficiency of logistic systems of each respective silk handcraft
sector supply chain.
Collaborate and setup silk cluster networks both inside the country as well
as regionally with neighboring countries.
Given the potential of the sector, these strategies alone will not help to improve
the silk sub-sector. However, the collective contribution of expertise and
financial support will contribute to further growth of this sub-sector and realize
the actual potentials.
To ensure the promotion and strength of the sector the MOAC will emphasize
the following:
11
2.3 General Issues Silk
In Thailand, silk generates total revenues of approximately 22.94 million EUR,

providing a 0.39% share of the countrys textile export in 2006 (THTI, 2007). It
ranks third among yarn and fabric export revenue earners (far behind cotton
and man-made yarns and fabrics). Most of Thailands silk is destined for the
domestic market (approximately 70%). The rest goes to export markets and
consist of intermediate products: silk fabrics and yarns (64% of exports),
garments and accessories (24%) and home textiles (12%). (Customs, 2007).
Thailand relies heavily on imported raw silk to meet demands from the textile
industry due to limited domestic supplies. Most of its raw silk has to be
imported from China and Vietnam, with annual imports amounting to more than
18.6 million EUR (OAE, 2006).
12
Figure 1: Thailands Exports of Silk and Silk products
(Source: OAE, 2007)
The exports of Silk and Silk products from Thailand fluctuate and compared to
2001, export volumes decreased from 813 tons to 698 tons in 2006., the value
of these silk exports, during these same years, reduced from 25.30 million EUR
to 22.94 million EUR.
Due to Thailands climate, silk production is a year-round activity. The main

production areas of silk yarn in Thailand are in the Northeast (97.5%) (QSIS,
2007). This is remarkable, as the Northeastern region of Thailand has been
regarded as a disadvantaged area with poor resources and an underdeveloped industrial sector. The region suffers from relatively harsh climatic
conditions, which often result in floods and droughts.
Considering that much of the silk produced in Thailand is intended for

household and craft activities, it is difficult to evaluate the actual figures given
over the silk production. In addition, variations between statistics from different
sources are even more pronounced. Notwithstanding these variations, the
Queen Sirikit Institute of Sericulture, which is considered the most reliable
source of information, reports statistics of silk in Thailand as follows;
When comparing the Northeast to

other regions in Thailand there is
less opportunity to expand
sericulture in these other regions due
to a number of environmental
constraints and alternative economic
opportunities. In most of the South,
because of the prevailing tropical
climatic and environmental features,
high rainfall and very high humidity
conditions restrict the adoption of
sericulture, and therefore the
potential for year-round sericulture is
low. In the East, the climatic
conditions are characterized also by
high humidity, however there are
more appropriate cultivation models
such as horticultural crop production.
In the West, the developing industrial
zones provide convenient and
substantial employment
opportunities for the surrounding
rural areas, and the prospects for
rural enterprise development such as
sericulture, is less attractive and not
Photo 3: Delicate Patterns in Silk
significant. In the North, there are
also more attractive income
generating activities for small farmers such as wood carving for handicrafts,
using forest products. Other alternatives in the North include horticultural
production of vegetables, because of the favorable climatic conditions.
13
Table 1: Features of Silk Production Areas in Thailand in 2006

(Source: QSIS, 2007)
Production
Area
Mulberry
Planted
Area (ha)
Cocoon
Production
(ton)
Number of
Silk Yarn
Holdings
Production
of Silk
Yarn (ton)
20,752
5,310
1,535
126,984
1,080
North
2,457
1,254
697
985
19
West
1,130
612
402
139
Other
543
240
112
1,360
Total
24,882
7,416
2,746
129,468
1,108
Northeast
14
Number of
Cocoon
Holdings
Figure 2: Features (in %) of Silk Production Areas in Thailand in 2006

(Source: QSIS, 2007)
Figure 2 compares each of the major silk production areas in Thailand

according to five key dimensions. From the table and the figure it can be
concluded that the features are mainly concentrated in the Northeast.
[Northeast share in of the overall Thailand market: Mulberry planted area
(83.4%), number of cocoon holdings (71.6%), cocoon production (55.9%),
number of silk yarn holdings (98.1%) and silk yarn production (97.5%)].
Even though production of silk is recorded in 48 provinces across the country,

sericultural farming is highly concentrated in a few provinces in the
Northeastern region of Thailand. The map in Figure 3 shows the spatial
distribution of silk yarn production. All 19 provinces in the Northeast produce
silk to some extent, but the main provinces producing silk yarn are Sisaket,
Buriram and Mahasarakham.
The number of farm households involved in sericulture is relatively small.
Moreover, the number of sericultural households has declined dramatically
over the past decade. This decline has been considerably more pronounced
than the overall decline of agricultural employment in Thailand. The number of
sericultural farmers in the Thailand was estimated at around 200,000 in 2005,
down from over 300,000 in the early 1990s.
Figure 3: Silk Yarn Production in the Northeastern Region in 2005
15
Figure 4: Comparison of Silk Yarn Production Methods, 2001-2004
(Source: DOAE, 2006)
16
Figure 4 shows the production in tons for each year for each respective
production method. According to the Department of Agricultural Extension
(DOAE), Thailand produces about 1,480 tons of silk yarn per year. In
Thailand, there are two main production methods used to manufacture Silk
yarn; hand reeled (which comprises about 77% of the market) and machine
reeled (about 23%) (DOAE, 2005).
Hand reeled yarn volume is rather stable as it increased only marginally from
1 ,1 0 0 tons in 2 0 0 1 to 1 ,1 5 0 tons in 2 0 0 4 . Machine reeled yarn volume
decreased moderately from 410 tons in 2001 to 330 tons in 2004. Overall,
the production volumes and shares have been quite stable with marginal
increases or decreases year by year.
2.4 Features of Silk

Silk - the most beautiful of all textile fibres, is acclaimed as being the queen
of textiles (World Bank, 2005). It comes from the cocoons of silkworms and
requires a great deal of handling and processing, which makes it one of the
most expensive fibres also. Man has reared silkworms for a very long time.
They were first domesticated in China around 4,000 years ago, and the silk
threads they produce to make their
cocoons formed the basis of a very
profitable trade between East and
West along the Silk Route*. Silk
production is concentrated in Asia,
including South and Southeast Asia.
This macro-region produces more
than 90% of the global silk
production.
Photo 4: Silk Fabric
Silks fall into two main types; the Mulberry and the non-Mulberry silks. This
classification is based on the preferred food material the silkworms are
reared on. Almost all the varieties of Mulberry silk are derived from the
domesticated silkworm Bombyx mori. The non-Mulberry silks, often called
Wild Silks, are derived from silkworms, which initially were not
domesticated. These non-Mulberry silks generally come in natural colours:
cream, beige, brown and gold. They are both user-friendly and healthy owing
to their porous texture and thermal properties.
* The ancient trade route linking China and the Roman Empire.
Chemically speaking, silk is made of

proteins secreted in a fluid state by a
silkworm. These silkworms feed on
selected food plants and spin
cocoons as a protective shell for their
next life cycle stage. The life cycle of
a silkworm spans about 50 days. It
starts with an egg stage of about 10
days followed by a larval (silkworm)
stage of about 25 to 30 days to end
with a pupa stage of about 10 days.
Man intervenes in this life cycle at
the pupa stage in order to obtain the
silk from the protective cocoon
surrounding the pupa.
17

18
Figure 5: The Life Cycle of Mulberry Silkworms (Bombyx mori)
Photo 5: Mulberry Silkmoth (Bombyx mori)
Mulberry Silk
Mulberry silk is the most important type and contributes to as much as 95%
of worlds silk production. All Mulberry silkworm varieties reared at present
belong to the species Bombyx mori and all are reared on Mulberry leaves. All
varieties produce cocoons with a continuous silk filament, which therefore
can be industrially reeled. The varieties are mainly differentiated according to
the number of generations produced annually under natural conditions. Also
hybrid Mulberry silkworms of various kinds have been developed.
Non-Mulberry Silks
Eri Silks
Photo 6 & 7: Eri Silkmoth (Philosamia ricini) & Eri Silk Cushions
Eri silkworms have two varieties. A wild variety, Philosamia cynthia, and a
domesticated variety, Philosamia ricini, which can be reared on variety of
food plants. Eri silkworms prefer Castor leaves and when reared on these
leaves they will yield large size cocoons, rich in silk content. Also Tapioca
leaves can be used to rear Eri silkworms although the produced cocoons will
be somewhat smaller and less rich in silk content. An Eri silkworm spins an
open-mouthed cocoon with discontinuous and not uniform filaments.
Because of this an Eri silk cocoon can only be spun and not reeled. As an Eri
cocoon is open-mouthed there is no need to kill the pupa inside the cocoon
as the moth can be allowed to emerge through the open-mouth without
damaging the cocoon. Because of this, Eri silk can be called a peace or
vegetarian silk. Eri silk is a fine silk which is almost as white in colour as
mulberry silk. It has the look of wool mixed with cotton but the feel and
softness of silk.
19
Tasar Silks
Tasar silkworms have several varieties: some wild and three main
domesticated varieties. The three domesticated varieties are; Antheraea
mylitta, feeding mainly on the leaves of trees of Terminalia species, A.
pernyi, a Chinese Tasar silkworm variety feeding mainly on the leaves of Oak
trees (Querus species) and A. yamamai, a Japanese Tasar silkworm variety
also feeding mainly on the leaves of Oak trees. Processing Tasar silkworm
cocoons is basically done the same way as processing Mulberry cocoons.
Therefore Tasar silk is not a peace or vegetarian silk as it is necessary
that the Tasar silkworm pupae are killed inside their cocoons before they
emerge as adult moth.
20
Photo 8 & 9: Tasar Silkmoth (Antheraea mylitta) & Tasar Silkyarn
Muga Silks
The semi-domesticated variety of Muga silkworm, Antheraea assama, feeds
mainly on the leaves of Machilus bombycine and Litsae polyantha. Muga
silkworms produce a strong, golden yellow silk, which is renowned for its
glossy fine texture, durability and natural golden amber glow. Reputed to be
a costly fabric, Muga silk looks like spun gold. Muga silk is naturally stainresistant and is never bleached or dyed. It is naturally organic and untouched
by chemicals, but it is also not a peace or vegetarian silk because also
Muga silkworm pupae are killed inside their cocoons.
Photo 10 & 11: Muga Silkmoth (Antheraea assama) & Muga Silkyarn
After Mulberry silk cocoons are gathered and sorted they are stifled with the
aim to kill the pupae inside their cocoons without interfering with the structure
of the cocoons. This stifling can be done with hot wet steam or hot dry air.
After stifling, the cocoons are dried for storage. Before reeling, stored
cocoons are boiled in water to dissolve the gummy substance that holds the
filament in place. During reeling a cocoon is immerged in hot water to loosen
the filament in the outer layer first. As one filament is very fine, the filaments
of five to eight cocoons are reeled together to get raw silk yarn. After twisting,
de-gumming and eventually dyeing, this raw silk yarn is woven into fabrics.
Silk is made up of protein fibres, which are triangular and so reflect light like
prisms. These protein fibres are spun in layers to give silk its characteristic
pearly sheen and sensuous feel. The protein in silk is very close in makeup
to human skin, which is why it feels so beautiful to touch - "Natures second
skin". It absorbs and transpires moisture far more than synthetic fibres. In
winter, silk provides thermal protection against the cold and in summer the
transpiration and evaporation of moisture through the silk makes it feel cool
against the skin. Table 2 gives a summary of the properties of silk fabrics.
Apart from the different varieties of domesticated Non-Mulberry silkworms

there are also some wild silk varieties. Aside from differences in colours and
textures, these wild silks all differ in one major aspect from the domesticated
varieties: the cocoons that are gathered in the wild have usually already been
damaged by the emerging moth prior to gathering. Consequentially, the
single filament that made up the cocoon has been torn into many pieces with
much shorter lengths. To avoid this damage, pupae of domesticated
silkworms are killed inside their cocoons before adult moths emerge, thus
allowing the whole cocoon to be unravelled as one continuous filament. This
allows a much stronger cloth to be woven from the silk of domesticated
silkworms. Wild silks also tend to be more difficult to dye than the silk from
domesticated silkworms.
21
Table 2: Properties of Silk Fabric
Property
22
Definition
Benefits & Use
Abrasion
resistance
Ability of fabric to withstand

the rubbing inherent in
everyday use.
Durability, resistance to splitting
Absorbency
The amount of moisture a

dry fibre will absorb from
the air.
Comfort, warmth, water repellence,

wrinkle resistance
Draping
Ability to hang delicately
More appealing to the eye than other

materials
Durability
Ability to withstand wear

and decay
Seemingly delicate but very strong.

Used for suture material
Dyability
The fibres receptivity to

colouration by dyes
Able to attach to and hold colour

better than any other fabric
Elasticity
The ability of the fabric to

stretch over its length
without breaking
Able to stretch up to 20 percent and

mould itself over any shape. Used for
silk stockings.
Flame
resistance
Burns slowly in an open

flame and is selfextinguishing once flame is
removed.
Excellent fabric for wall coverings

and upholstery
Electrical
Insulation
Does not conduct

electricity
Used to insulate electric wires
Lustre
The light reflected from the

surface.
Prism-shaped fibre makes silk very

lustrous.
Mildew/mould
resistance
Mould is a white or grayish

coating formed by fungi.
Resistance to mildew, moulds and

rots that attack other fibres, unless
left in damp conditions for long
periods.
Resilience
Ability to resume an
original shape after being
stretched
Tends to hang out and have good

shape retention.
Size
reduction
Ability to bundle or fold into

a small size
Can carry in a small space. Silk

maps were hidden in clothing during
the war.
Strength
Ability to resist stress
Strong, but slightly weaker when wet.

Tougher than cotton or fine wools.
Weight
Silk is one of the lightest

natural fibers.
Preferred for dresses in Asia (saree,

kimono) and jockey riding jackets.
Warmth
Silk feels warm on the skin.
Used to line snow jackets
Mulberry silk production is both very labour and land intensive. One silkworm
produces very little usable silk. It takes approximately 650 cocoons and 100
labour hours to produce sufficient silk fabric to make one scarf. One mature
mulberry tree will produce enough foliage for 100 silkworms. Silk is
environmentally friendly. The environmental impact of silk processing is
relatively minor in its initial stages when compared to cotton or wool.
Figure 6: Yields in the transforming process of producing Silk Fabrics
Currently the silk production in Thailand is almost 100% mulberry silk. Three
major varieties of mulberry silkworm are used in the Thai silk sub-sector;
polyvoltine (producing multiple generations in a year), poly-bivoltine hybrids,
and bivoltine (producing 2 generations in a year). The main technical
characteristics of the 3 types of Mulberry silkworms are summarized below.
Polyvoltine silkworms are varieties that farmers have traditionally produced,

based on egg stocks that they maintain themselves. Native silkworms
produce small, yellow cocoons. The filament length of these cocoons is
about 250-300 meters, which can only be reeled by hand.
Thai hybrids (poly-bivoltine, yellow cocoon)
Thai hybrid varieties are bred from native polyvoltine (Poly) and foreign
bivoltine (Bi) parents. They produce yellow cocoons of intermediate size that
are usually reeled by the farmers but can also be reeled in factories. Thai
hybrids are mostly Poly x Bi, but can also refer to other breeding variations
(Poly x Poly, Bi x Bi, Bi x Poly or (Poly x Bi) x Bi). Poly-bivoltine varieties
produce cocoons with a filament length of about 600-800 meters, which are
mainly reeled by hand but which can be reeled by machine.
Foreign hybrids (bivoltine, white cocoon)
Foreign hybrid varieties are bred from foreign bivoltine parents. They
produce large cocoons, which are suitable for factory reeling. Bivoltine
cocoons are usually white, with exception of some of the newer breeds.
Bivoltine varieties produce cocoons with a filament length ranging from 600
to 1500 meters, which are reeled mainly by machine.
Native varieties (polyvoltine, yellow cocoon)
23
Silk yarn can be categorized according to its weaving use. For weaving two
major types of yarn can be distinguished; warp yarn and weft yarn. Warp
yarn represents the yarn lying lengthwise in a weaving loom. This type of
yarn needs to be of uniform thickness with some flexibility. Weft is the yarn
used crosswise in the weaving process.
24
Photo 12: Silk Yarns
The Department of Agriculture (2004) defines Thai silk yarn into three grades
as follows:
1. First grade silk yarn (locally known as Mai Noi) is the silk yarn resulting
from reeling the filament from the inner layer of a cocoon after all the
floss and the filament of the outer layer have been removed. It is a fine
yarn, recognized as having the best quality and it is usually used as warp
yarn because of its fine and smooth texture.
2. Second grade silk yarn (Mai Loei) is the silk yarn resulting from a
reeling process, which combines, after removing the floss, the filament
from the outer layer and the filament of the inner layer of a cocoon. The
resulting silk yarn is not as fine as first grade silk yarn. This silk yarn can
be used for weft only.
3. Third grade silk yarn (Mai Leub) is the silk yarn resulting from reeling
the filament of the outer layer of a cocoon after all the floss is taken. The
resulting silk yarn is coarser than second grade silk yarn. Similar to
second grade silk yarn, this silk yarn can also be used for weft only.
Mulberry
Mulberry cultivation is indispensable to

Photo 13: Feeding
Mulberry silkworm rearing. Mulberry trees are
Silkworms
cultivated to provide leaves, which are fed to
the silkworms in special rearing rooms. From
the day a silkworm hatches to the time it stops feeding, a silkworm gains in
weight about 10,000 times. During this time it eats some 22g of leaves and
converts more than 70% of its intake of nitrogenous material into silk.
Harvesting Mulberry leaves is usually done by hand-picking leaves or
chopping branches using hand tools or machines. In Thailand, the leaf
picking starts about 10 weeks after bottom pruning with the next pickings at 7
to 8 week intervals, achieving 6 to 7 harvests in a year. The tree is then
pruned to near ground level again. Picking leaves can be either with or
without the leaf stalk (or petiole). Mulberry is a multiple purpose tree. Apart
from its leaves being a good fodder for silkworms or livestock, it produces a
fine wood, its branches can be used in basketry and its fruits are edible and
can be used to make wine.
Mulberry (Moraceae morus) is a deciduous perennial plant with, in Thailand,

a life cycle of 5-10 years depending on how well the tree is cared for.
Mulberry is globally cultivated in more than 50 countries, mainly in temperate,
subtropical as well as tropical climates around the world. The plant is able to
adapt to varying soil and climatic conditions and can grow in poor soils, in
arid regions, from sea level to as high as
4,000 metres above sea level. Depending on
the cultivation, the tree can be grown as a tall
tree, middling tree or a bush. The plant
provides all needed nutrients for a silkworm.
The quality of the mulberry leaves fed to
silkworms is reflected in the quality of the
produced silk; so it is vitally important to
produce good quality leaves. The quality of
the leaves is a direct result of prudent
agronomic management aspects in the
cultivation of mulberry. A complete agronomic
package of variety selection, planting
techniques, nutrient management, water
application, pest and disease control
measures, and harvesting techniques ensures
high yield and good quality mulberry leaves.
There are at least 24 species and 100
varieties that vary in habitat, yield and nutrient
content; but less than 20 varieties are
commercially significant globally.
25
2.5 General Issues Home Textiles

The textile sector has historically made a significant contribution to
Thailands export revenue earnings. According to the National Economic and
Social Development Board, the manufacturing sector accounted in 2006 for
about 77.8% of total export earnings. Textiles accounted in 2006 for about
6.8% of total export earnings, increasing by 10.7% from 2003 to 2006. Being
a labour intensive sub-sector, it also helped in generating a high
employment rate in Thailands manufacturing sector (NESDB, 2007).
Home textiles generate total export earnings of approximately EUR 220.6

million, contributing 3.6% to Thailands total textile export earnings in 2006
thus providing a 0.31% share in the countrys manufacturing exports (DEP,
2007).
26
Figure 7: Thailands Exports of Home Textiles
(Source: DEP, 2007)
The power loom sector dominates the production of fabric in the country,
accounting for more than 90% of the total fabric production. The massive
growth and utilisation of power looms has replaced handlooms at a rapid
pace.
Northeastern home textiles are made mainly from local handloom woven
fabrics. The major raw material used in this sub-sector is silk. It is estimated
that the sub-sector consists of approximately 300, home textile producing,
SMEs (groups, companies and cooperatives). The entire silk sub-sector
employs about 100,000 people region wide, including a considerable number
of support people (rearers, reelers, bleaching and dyeing specialists, input
suppliers, weavers etc.).
Product-wise, the handloom weavers in the Northeast can be basically
categorized into two groups; those who weave high value-added luxury silk
fabrics with unique traditional designs, and those who weave low valueadded standardized silk fabrics. The high value-added luxury silk fabrics
account roughly for a quarter of all handloom fabrics and have their niche
markets where neither mills nor power looms can compete.
Photo 14: Handloom Weaving
27
2.6 Features of Home Textiles
Textile products can be categorized according to their use; those, which are,
used as raw material for further processing (e.g. yarn and fabrics), those for
final usage by industry as a semi-finished or pre-product or (e.g. technical
textiles), and those which serve as end product to the consumers (apparel*
and home textiles). The markets for these products differ in terms of duration
of product life cycles, expectations regarding chemical product safety and
technical performance.
Few companies in Thailand have a fully integrated end-to-end production

process where all the processes from yarn production to top-finishing of dyed
fabrics happen in one company. Often only a single processing step is
carried out.
Photo 15: Shuttles for Silk Weaving
The home textile sector in the Northeast is comprised of a dispersed and

fragmented group of establishments that produce and/or process textile
related products (cocoon, yarn, fabrics) for further processing into home
textile products. Textile establishments transform cocoons into yarn, dye
yarn, make fabric and finish these materials at various production stages.
The home textiles chain is thus long and complex whilst the sector
encompasses, in its broadest sense, the production of yarn, fabrics and
finished home textile products.
* Formal Clothing
28
The people of Northeastern Thailand, with their diverse cultural backgrounds

and varieties of natural resources, have a rich heritage of craft skills.
Handicraft is therefore considered to be one of the most important and widely
adopted off-farm occupations of most people living in the countryside. As part
of its cultural heritage, Northeastern Thailand has a variety of traditional
fabrics (textures and patterns) and products, produced by handloom
weaving. Handloom textiles are characterized by natural fibres, traditional
skills and eco-friendliness giving products a different appeal from industrially
woven items.
Handloom weaving is an important activity in the rural economy of

Northeastern Thailand. One source of Thai home textiles is handloom
production of fabrics and sometimes even of finished home accessories. The
production is labour-intensive and is done by local artisans, whose expertise
and skills have been handed down from one generation to the next, creating
a distinctive local identity and product authenticity.
Photo 16: Woman Weaving Silk
29
Home textile producers fall basically into two groups;

1.
Professional producers who earn their living from product sales,
2.
Part time producers who produce handmade items alongside another

occupation (farming, cattle-breeding, housekeeping).
Producers in the first group are open to new developments, education and
training and have a high level of interest in seeing and learning modern
techniques and design improvements.
Producers in the second group are mainly women. Home textile production
is a source of additional income for them. Securing jobs in the home textile
sector for the people in remote areas has an important economic impact as
well as important social and cultural significance. A majority of producers
work from their own home, thereby controlling their time and output and, in
many cases, allowing them considerable input into on-going family life.
30
Photo 17, 18 & 19: Silk Thai Home Textiles
Demand for Northeastern home textiles (mainly curtains, bedspreads,

serviettes and pillowcases) now comes from a niche market consisting of the
upper middle class. Customers are willing to pay relatively high prices for
hand-woven items. The craftsmanship and prowess of Northeastern home
textiles has strengthened the image of the sector and made it possible to
carve a niche, not only in the Thai market but in foreign markets as well. The
Northeastern home textiles sector is quite versatile as most units are small
and have the flexibility to respond quickly to dynamic market situations.
In summary, basic characteristics of the Northeastern home textiles sector

are as follows:
1. It is quite diversified in nature, both in terms of products as well as

production methods. The region is known for specific products that are
unique in design and style. There are independent weavers, organized
weavers in co-operatives or informal groups and weavers working under
master weavers.
3. It is largely home-based, with labour inputs from family members. Being

home-based makes it decentralized. In each stage of the production
process, whether it is pre-loom processing, weaving or finishing every
member of the household has a clear role to play. In many ways, it is
similar to an agricultural household that engages in the self-exploitation of
labour in order to remain at a subsistence level.
Basic materials vary in the different market segments. Certain types feature
more predominantly in the mid to high-ends of the market (e.g. silk and
cotton) others feature more in the low end (e.g. chemical fibre). In
Northeastern Thailand, silk is the most popular material overall.
At this moment, it is difficult to trace the various inputs into the Thai home
textile chain. Most producers and exporters do not have any means to find
out where inputs (e.g. silk yarn) for their products came from and under what
ecological or social conditions products were produced.
2. There is a great flexibility in processes, products and geographical shifts.

Making changes in production processes and innovation in products are
fairly easily achieved. Unlike land resources that tie individuals to a given
place, weavers are limited only by their skill thus being able to shift from
one production base to another.
31
3. Market Analysis
3.1 World Production & Trade
Silk represents a tiny percentage of the global textile fiber market. Globally,
cotton accounts for 40% of the world fiber consumption, wool accounts for a
mere 2.5%, and silk accounts for a tiny 0.2% (WTO, 2006). Yet, the actual
trading value of silk and silk products is much more significant than this
volume would suggest. Silk is a premium priced agricultural commodity; the
unit price of raw silk is roughly twenty times that of raw cotton (FAOSTAT,
2007).
Market Analysis
World production of raw silk stood at 135 thousand tons in 2004, a 20%
increase relative to 1995, when production stood at 113 thousand tons. The
global production of raw silk from 1995 to 2004 is shown in Figure 8.
32
Figure 8: Global Production of Raw Silk in tons
(Source: FAOSTAT, 2007)
China is by far the worlds biggest raw silk producer, with a 70% share of the
world production in 2004, followed by India, Vietnam, Turkmenistan, Brazil
and Thailand respectively (FAOSTAT, 2007). In terms of exports, China also
tops the list (90%). India and Vietnam currently export only a small
percentage of their overall production.
Figure 9: World Raw Silk Production in 2004
World Raw Silk Imports
(Source FAOSTAT, 2007)
World Raw Silk Exports
(Source FAOSTAT, 2007)
Market Analysis
Figure 10: World Raw Silk Imports and Exports in 2005 in million EUR
33
Four major textile producers India, Italy, Japan and Korea import raw silk
for their textile industries (FAO, 2007). India is the largest importer,
accounting for 32% of world raw silk imports, followed by Italy (22%), Japan
(14%) and Korea (9%) respectively.
Thailand is the sixth largest raw silk producer with about 1% of the world
production and is ranked seventh in term of raw silk imports (about 3% of the
world imports). Thailand, being one of the worlds leading textile producers, is
dependent on imported raw silk to meet the demands from the textile industry
due to limited domestic supplies. Compared to other global players in the raw
silk sub-sector, Thailand exports only a small quantity of raw silk, which is
declining over recent years due to its high price and a lack of lustre.
Market Analysis
It appears difficult to predict global consumption trends of silk. This is

because silk products tend to share the characteristics of luxury products,
which are not very sensitive to price changes. In the long run, demand is
affected by factors such as fashion trends, promotion, and changing attitudes
of the public toward natural fibres and textile products. Promotion of silk and
natural fibre can have a major effect on demand and attitudes of consumers.
In the late 1980s, some silk promotion activities in Europe were conducted by
the European Commission, but at present, virtually no global silk promotion
activities are in place (NEED, 2006).
34
Current estimates for all types of home textiles suggest that the worlds global
home textiles sector can be valued at approximately 95 billion EUR with the
US and EU together accounting for more than 60 billion EUR. With projected
increases in the US market of 5% and the EU market of 9 to 10%, they
together stand for about 70% of the worlds total home textiles imports.
According to a survey by TFIA, the value of the global trade in home textiles
is projected to increase from about EUR 18 billion in 2005 to more than EUR
25 billion in 2010. Annual demands for home textiles have been increasing
over the last 10 years at an average growth rate of 6%. It is not possible to
separate out handloom and/or handcraft products trade trends from the
overall trade trends because of the way in which the trade data is captured.
The trends therefore only give an indication of the overall dynamics within the
world home textiles market as a whole.
There are, for the Northeastern home textiles sector, only a few published
sources of baseline data across the value chain. Acquiring data is further
complicated by the fact that a large part of Northeastern home textiles trade
occurs informally and the fact that the sector is not disaggregated into official
sector statistics for employment and revenue or customs and export
statistics, which are aligned with the Harmonised Standards (HS) coding
system. This system does not record handcrafted/handloom items separately
from other manufactured items.
3.2 Demand & EU Market

Consumer expenditures in the EU for household and furnishing textiles
decreased from 0.52% in 2001 to 0.46% in 2005 whereas in the same period
the expenditure grew in sectors like health, housing/energy, transport/
communication and leisure/education activities. (CBI, 2006) There is a
tendency that household expenditures increase in times of growth in income
and household consumption, but decrease in periods when growth in income
and household consumption is low or negative.
Developments in the import of household and furnishing textiles vary strongly
between EU countries. These differences depend on several factors like size
and structure of domestic production of household and furnishing textiles and
the possibilities and volume of re-exports. EU countries can, according to a
CBI Market Survey, be classified, by developments in value of imports during
2003-2005 as shown in Figure 11:
Market Analysis
Figure 11: Developments in Imports of Household & Furnishing Textiles

in EU Countries, 2003-2005 (Source: CBI, 2006)
35
Product types position in household and furnishing textiles supplied to the

EU by developing countries in 2005 is illustrated in Figure 12:
Figure 12: Import Volume & Value of Selected Product Types
Market Analysis
(Source: CBI, 2006)
36
A price analysis reveals that table linen, curtains and other furnishing textiles
fetched higher prices than bedspreads and bath/kitchen linen. Consequently,
these products had stable prices in the period 2001-2005. Both premium
prices and the higher and stable demands of these products suggest that
emphasis should be given to produce and export table linen, curtains and
other furnishing textiles products.
In terms of suppliers, the role of developing countries increased strongly,
from a share of 50% in 2001 to share of 58% in 2005. At the same time the
imports from developing countries rose by 20% and intra-EU trade by 24%,
whereas imports from countries outside the EU (excluding developing
countries) fell dramatically by 62%. (CBI, 2006).
Figure 13: Household & Furnishing Textiles Suppliers to the EU in 2005,

share in % of value in million EUR
(Source: CBI, 2006)
(Source: CBI, 2006)
The competition in the EU market is now increasing fiercely as many

suppliers are supplying more or less similar products and shipping these in
large volumes. China is the biggest supplier from developing countries, with
a 27.6% share of the total import value from developing countries to the EU
market. Turkey, India and Pakistan are next biggest with 25.9, 17.2 and
15.5% respectively, followed by Bangladesh, Egypt, Tunisia, Brazil, and
Indonesia with much smaller shares. (CBI, 2006).
Market Analysis
Figure 14: Leading Household & Furnishing Textiles Suppliers from

Developing Countries in 2005, share in % of value in million EUR
37
In the highly competitive retail market, EU retailers push their suppliers to

provide their products at consistently lower cost. Many of the large value or
discount retailers make their profit from selling large volumes rather than high
mark-ups on individual items. On the other side the very high end of the
market (which is a much smaller but more lucrative) is more concerned about
quality and branding than price. In between these two extremes is a range of
variations, which Thai producers/exporters will need to explore to find the
best potential opportunities.
Market Analysis
Table 3: Features of EU retail market segments
38
(Source: CBI, 2006)
Product
Criteria
Store Choices
Brand
Names
Fashion
Criteria
Price
Criteria
High Price
Luxury
Segment
Market
Share
5-10%
Exclusive
luxury high
quality
material
(designer-)
brand name
goods with
image effect
Exclusive retail
stores, designer
stores, special
departments in
department
stores, special
mail order
companies
Donna
Karen,
Nicole
Farhi,
Georgio
Armani,
Joop!
Fashionable
colors,
changes
every
season,
special
designs and
exclusive
artworks
Price less
important
Upper
middle
Price
Segment
Market
Share 1520%
Brand name
goods, high
quality
materials,
fashionable
collections,
broad rage in
design
Good quality,
trend
following or
classical
assortment,
brand name
goods
Independent
shops, shop in
shops,
manufacturers
direct stores,
Department
stores
Zucchi,
Bassetti,
Van Dijck,
Vossen,
Freyte
Acceptance
of price for
fashionable
collections
and
consumer
brands
Independent
shops,
Department
stores, mailorder interior
department
stores
Cinderella
Irisette,
Habitat
Many colors
available,
exclusive
designs but
with fewer
colors than
luxury
segment
Standard
colors and
each
season
fashionable
colors,
common
designs
Low to
middle
Price
Segment
Market
Share 4540%
Basic quality,
limited range
of colors and
designs,
fashionable
Interior
department
stores, variety
stores, value
retailers
Price
labels like
Ikea,
Marks &
Spencer,
Hema
Price
important
Low or very
low price
segment
15-20%
Basic/low
quality,
special sales/
offers,
inexpensive
products
Variety stores,
discounters,
super- and
hypermarkets,
streetmarkets
No brands
Standard
collections
with less
variations
per season,
limited
number of
designs
Standard
products
without
special
fashion
requirement
Middle to
high Price
Segment
Market
Share 2025%
Price
threshold
must be
observed
Special
(low) prices,
price is
decisive
High-risk, low-volume, service-intensive products require different margins

than low-risk, high-volume standard products. It is impossible to draw up a
schedule of actual margins for each and every product/market combination.
Even within the same type of combination, different importers employ
different margins, due to variations in economic conditions. A typical
commission rate paid to an agent is 10% of sales, though this can be as low
as 8% for volume business and much higher for exclusive deals.
It is generally more attractive for an exporter to operate in the medium and
high market segments. Margins vary greatly with types of products as well as
with retail channels. The average textiles retailer marks up goods by 80 to
110% of the buying price. Selected goods are retailed even with prices up to
140% higher than the buying prices. In grocery stores, small textile articles
have a gross margin of 20-30% of the retail selling price. This margin figure is
highly attractive compared with typical profit margins on food and other
grocery items.
Reliable statistics are difficult to find in order to verifying the current market
situation of handloom products. Due to the limitations of the EU harmonized
code which put both hand woven and power woven products under the same
category, categorizing these products into handloom and power loom textile
products is difficult, if not impossible. The analysis of the EU market by IBEF
revealed that for the year 2005, the estimated volume of handloom home
textile imported into the EU is 108 thousand tons valued at approximately
EUR 982 million. This is based on the findings that the share of the handloom
products out of the total household and furnishing textiles imported into EU in
year 2005 was approximately 16%.
(Source: IBEF, 2007)
Market Analysis
Figure 15: Value share of Home Textiles imports to the EU in 2005
39
The EU market for handloom home textiles is quite fragmented. There is

hardly any shop selling just handloom home textiles, but many outlets that
sell both home textiles and home decorations in general, of which handloom
home textiles form a part. Neither have a dominant market share in
handloom home textiles. There are thousands of small importers,
wholesalers and retailers.
Elements of fashion are: colour, design, exclusivity and life style. The present
consumer in the EU wants to be seen as an individual with his/her own life
style. Household and furnishing textiles have also an individualising function,
especially in the fashion and design segments (higher price ranges). In these
segments consumer demands have become more specific. Character, ideas
and attitude to life will be emphasised by the ambience that consumers give
to their home interiors. Just like other fashion items such as clothing, a home
interior serves as a means to express personality. Personalisation should
become a vitally important characteristic of new offerings, as this will be the
strongest stimulus for new purchases. The home textiles sector is
decreasingly dependent on the need to replace, being far more focused on
pure choice.
Market Analysis
The trend towards looking for higher quality and more expensive products
has increased in recent years, but an even more important trend is the priceconscious consumer who is looking for fashionable trends as well as good
quality materials. Value for money is still the most important purchasing
criterion for most consumers.
40
Demand for ethnic, handcrafted products is particularly strong in the growing

home textiles sector. According to retailers in the EU, European consumers
appreciate one-of-a-kind items, which can personalize the decoration of their
homes. Handmade home textiles, which combine quality construction with a
handmade, rustic appearance, fit well into the more modest, back-to-basics
style for the home, which is now popular in Europe. Ethnic designs which are
incorporated in traditional Thai textiles and handicrafts also have a market in
the EU. These authentic products often display geometric patterns and
simple designs, which complement abstract and modern decors. At the same
time, they appeal to consumers who value traditional cultures, ethnic art and
natural materials, such as natural dyes.
According to latest information,

the EU is very cautious in
Photo 20: Silk Dyeing
formulating regulations to restrict
the use of AZO dyes. The EC
first restricted the use of AZO dyes in 1994 as part of its action on public
health, and to combat cancer. AZO dyed textiles that may come into close
contact with the body will be banned. The group of products with potential
dangers for skin/AZO dye contact includes clothes, footwear, handbags,
bedding, etc.
Market Analysis
Health considerations continue to play a large role in the choice of home

textile products. Instead of considering a home textile product to be a mere
consumer good, EU buyers are now regarding products to be a sensible
investment for maintenance of their health. Producers who can provide highquality information and products for every type of buyer have good sales
potential for their products. Hypoallergenic, hygienic, bacteria-preventing
materials also rate as important
factors when purchasing home
textile products, as are care
instructions and wash-ability.
Consumers are becoming more
conscious with respect to green
activities, non-toxic and
environmentally friendly
consumer goods with an
increasing knowledge of
materials, care and the
environmental impact and social
requirements. Silk's natural
hypoallergenic qualities have
come to be increasingly
appreciated across the modern
world. Silk bedding is a great
blessing to all allergy sufferers,
who may be prone to asthma,
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
will not accommodate these
mites.
41
3.3 Thailand Exports Market

The textile industry has for a long time been an important industry in Thailand
in terms of its value added, employment, and export contribution.
Domestically, its importance to the economy comes both from forward as
well as backward linkages to related industries including garments, weaving,
and reeling industries. Furthermore, Thailand has internationally been one of
the leading exporters of textile products in the world.
Market Analysis
Although policy makers highlighted the importance of textiles and entitled the
textile sector as one of the five priority sector for national growth, local textile
production, in fact, is stagnating at relatively high levels. Market shares and
competitiveness are gradually eroding since the end of nineties, mainly due
to lower cost supplies from China, India, etc. Overall, most Thai home textile
exports are commodity products subject to intense foreign competition and
low prices.
42
Figure 16: Product Types Shares of Home Textiles Exports from

(Source: DEP, 2007)
Thailand in 2006 in value in million EUR
In 2006, there were 4 home textiles product types; carpets (35%),

bedspreads and bed linen (31%, bath and kitchen linen (23%) and blankets
(10%) holding the majority share of the export market.
The main export markets for Thai home textiles are the US, Japan, the EU,
Australia, the UAE and China.
Table 4: Thai Home Textile Exports, 2003-2006
(Source: DEP, 2007)
2004
2005
2006
Total Thai Home Textile

Exports
Value (Mil EUR)
143.47
179.78
190.78
220.60
Export to the United States

Value (Mil EUR)
% share of total value
67.20
46.8%
83.03
46.2%
84.32
44.2%
95.01
43.1%
Export to Japan
Value (Mil EUR)
26.42
18.4%
38.21
21.3%
29.11
15.3%
36.43
16.5%
Export to the EU
Value (Mil EUR)
7.40
5.2%
9.05
5.0%
9.93
5.2%
11.07
5.0%
Export to Australia
Value (Mil EUR)
2.30
1.6%
4.33
2.4%
5.88
3.1%
7.89
3.6%
Export to the United Arab

Emirates
Value (Mil EUR)
3.22
2.2%
4.70
2.6%
5.21
2.7%
6.92
3.1%
Export to China
Value (Mil EUR)
0.96
0.7%
1.93
1.1%
3.88
2.0%
6.80
3.1%
Export to Other Countries

Value (Mil EUR)
35.98
25.1%
38.52
21.4%
52.46
27.5%
56.48
25.6%
The US accounts for the largest percentage (43.1% in 2006) of the total
value, followed by Japan (16.5%) with the EU accounting for the third largest
percentage (5%). With the total value of the US market for home textiles
increasing yearly by 5 to 7%, the US continues to rely on a significant import
volume to meet local demand. This means that there is still huge potential to
penetrate the US market. Also the EU (mainly the UK, Germany and
Sweden) is fairly important market for Thai home textiles as it accounts for
about 5% of the total value of home textile exported from Thailand with the
value increasing yearly by 10 to 15%.
Market Analysis
2003
43
Figure 17: Thai Home Textile Revenues based on Export Markets

(Source: DEP, 2007)
In 2005, silk waste, silk yarn and silk fabric exported from Thailand
represented 350.83 and 9,784.18 and 14,030.27 thousand EUR,
respectively. Over the same period, cocoon, silk waste, silk yarn and silk
fabric imported to Thailand represented 186.43, 1,753.00 and 11,533.20 and
5,149.77 thousand EUR, respectively. For silk yarn in particular, the
simultaneous import and export of yarn is partly due to the difference in yarn
quality. Thailand is producing and exporting yarn mainly for weft use and
importing warp-suitable yarn. While silk yarn has the largest share in import
and export value, it is silk fabric that has more than two times the value per
ton compared with silk yarn.
Market Analysis
Table 5: Import and Export of Silk in Thailand
44
(Source: THTI, 2006)
Rearing
Reeling
Cocoon
Silk Waste
Export Values (EUR thousand)
359.83
9,784.18
14,030.27
Export Volumes (tons)
98.40
413.00
220.00
Value per ton (EUR thousand)
3.57
23.69
63.77
Import Values (EUR thousand)
186.43
1,753.00
11,533.20
5,149.77
34.00
576.00
579.00
97.00
5.48
3.04
19.92
53.09
Year 2005
Import Volumes (tons)

Value per ton (EUR thousand)
Weaving
Silk Yarn
Silk Fabric
Main export markets for Thai silk are the EU, Korea, the US, and Japan.
Table 6: Thai Silk Exports
2003
2004
2005
2006
18.24
21.91
24.16
22.94
5.25
5.10
5.75
5.84
28.8%
23.3%
23.8%
25.4%
Value (Mil EUR)
1.33
3.66
6.82
4.59
7.3%
16.7%
28.2%
20.0%
4.87
5.18
5.23
4.58
26.7%
23.6%
21.7%
20.0%
3.87
4.85
3.00
3.55
21.2%
22.1%
12.4%
15.5%
2.92
3.12
3.36
4.38
16.0%
14.3%
13.9%
19.1%
Total Thai Silk Exports

Value (Mil EUR)
Export to the EU
Value (Mil EUR)
Export to Korea
Export to the United States

Value (Mil EUR)
Export to Japan
Value (Mil EUR)
Value (Mil EUR)

The EU (mainly Germany and the UK) accounted for the largest percentage
(25.4% in 2006) of the total value of silk exported from Thailand. Korea and
the US accounted both for 20% of the value, followed by Japan with 15.5%.
Thailands silk export to the EU was 5.84 million EUR in 2006, an increase of
11% compared to 2003.
Market Analysis
Export to Other Countries
45
Figure 18: Thai Silk Export Revenues based on Export Markets
Market Analysis
46
Figure 19: Product Types Shares of Silk Exports from Thailand in 2006
in value in million EUR
(Source: Customs, 2007)
In 2 0 0 6 , there were three product types of silk sharing the export market;
intermediate products (e.g. silk yarns, silk fabrics) (6 3 .7 %), garment and
accessories (2 3 .8 %), and home textiles (1 2 .5 %). More Detailed information
according to HS Code is given in Annex 11.3. Customs reported in 2007 that
for the year 2006, silk home textiles had an approximate 1.3% share in the total
exports of Thai home textiles.
Figure 20: Percent Share of Silk Home Textile Exports in 2006 in million
EUR
(Source: Customs, 2007)
As mentioned before, it is difficult to find reliable statistics to verify the

percentage of Northeastern home textiles that are exported to the EU.
Several informants of this study estimate that only a very small percentage of
Northeastern home textiles are sold to EU markets as Northeastern home
textiles havent been marketed broadly in EU countries.
Market Analysis
Photo 21: Selling Silk on Cotton & Silk Exhibition
47
3.4 Future Trend

Germany, the UK, France, Italy and Spain will continue to be primary import
markets, accounting for 75% of the household and furnishing textiles
consumption in the EU (CBI, 2006). However, the Netherlands, Belgium,
Sweden and Austria may emerge as more important players as future import
markets.
Forecasts regarding the consumption of home textiles predict an annual
growth of 2% for the period 2005-2009. Consumer expenditure in EU
countries is also expected to grow slowly further in 2007 and beyond, caused
by:
Changes in demographic factors in most EU countries including an
increasing average age, growing number of one and two personhouseholds and the movement to becoming more multi-ethnic societies.
A continuing interest in more fashionable home textiles, especially of
younger age groups and encouraged by foreign multinationals in several
EU countries.
As domestic housing increases in line with population growth, there will be
an increased demand for home textiles.
Consumers in several new EU member states will become more aspiring
in purchasing behaviour as prosperity increases and foreign investment in
the country grows.
There is a stable and high demand for natural fibres.
Market Analysis
Increased attention of consumers for fashionable products, encouraged

by home magazines and television programmes for interiors.
48
The arrival of foreign companies, like Ikea, Zara Home, Ka International

etc., with modern retailing styles dedicated to home furnishings incl. home
textiles, has had a huge impact on several underdeveloped markets in the
EU.
All these factors will lead to new demands and new consumer behaviour.
The outlook is distinctly brighter in Eastern Europe, where needs justify
substantial investments in all areas including home textiles. Other factors are
recovery of and/or further growth in the economic situation, despite
limitations such as rising unemployment and low consumer confidence, as
well as fashion developments. Negative developments are based on
intensive price competition on trade level and economic developments such
as unemployment.
EU home textile retailers are increasing their level of vertical integration in

this sector and often have their own designers to give their collections a more
unique outlook. This not only includes retail products that can be purchased
from suppliers, but also now involves greater interaction with suppliers by
helping them to design products to better match consumer demand. Although
the retailer will not manage the production, there is a greater level of
involvement in design development.
The decline of domestic manufacturing in EU countries has led to a more
internationally oriented trade in home textiles. The keen competition on the
home textiles market will steadily increase and this leads to further
possibilities for exporters in low-cost countries. However, exporting home
textiles to EU countries requires in-depth understanding of many aspects of
the markets. In EU marketing, a product to market matching process is
being readily adopted and, at the entry level, this is of critical importance. For
example when a producer wants to enter the EU market with a product there
must be a good understanding on how to match the new product to meet the
needs of the market.
Market Analysis
A successful Thai home textile exporter, Pasaya, notes that there is a

plethora of trade shows available to the exporter who wants to attend one.
These range from very large shows, encompassing a wide variety of
products from countries around the world, to small shows focusing on a
narrow line of products from a limited set of locations. There are pros and
cons to different kinds of shows. Exporters should carefully analyse these
pros and cons relative to the specific product and situation involved. For
example, at a big show, exporters can get high exposure, but might get lost
or loose visibility among the host of other products. At a more specialized
show, exporters might be more noticeable, but there will not be as many
people to notice their products. If exporters have a well-defined target market
and can only supply small quantities, then a small, focused show may be
best. The quality of display, the activities of those tending the exhibit, and the
location, lighting, and so on, are all important to the success of participation
in a trade show. Producers can ask the retailers with whom they are already
in contact to suggest which are the most appropriate trade and fashion
shows that can provide high exposure and improve the contact with new
potential clients and other retailers.
49
Surveys reveal that the European public is becoming increasingly discerning

about their choice of goods and are becoming more willing to pay a higher
price for a product reflecting the criteria they believe to be important.
Examples include; fair trade products, product stories and production
environment (compare an industrial sweater with one produced from Alpaca
fibres of Alpacas raised in the Andes) and products with adapted ethnic
knitting patterns. Overall the consumers in most categorises have however
become very price sensitive. Handloom producers therefore need to be more
creative and focus on serving niche markets.
Market Analysis
The segment of organically grown and ecologically sound products

represents an especially interesting niche in the home textile sector. This
segment offers good growth rates (over 5% in 2005). It should be noted
however, that fashion plays an increasingly important role in this segment.
High value-added raw materials that draw from strengths in engineering and
design skills can give the industry tremendous opportunities to compete
worldwide including in EU markets.
50
Photo 22: Handcrafted Silk Table Set
The dominance of mass-produced goods within the marketplace has created

significant opportunity for handcrafted merchandise in many categories,
including home textiles, as consumers look for interesting new products to
consume. However, this opportunity is one filled with challenges for the
handcrafters.
4. Industry Structure
The Northeastern home textiles sector is not at all well integrated and the silk
sector is relatively complex. Some farmers raise silkworms and sell cocoons
for processing in factories; some raise silkworms, reel the cocoons and sell
silk yarn, either to other villagers or to weaving factories; some villagers buy
yarn and concentrate on dyeing and weaving; and some complete the whole
process from planting and maintaining their mulberry plots for silkworm
rearing up to selling dyed woven fabrics and products.
(Sources: QSIS, DEP, 2007 and Stakeholder interviews and Analysis by the Survey Team, 2007)
Industry Structure
Figure 21: Sector Map of the Northeastern Home Textiles: Silk subsector
51
4.1 Silkworm Egg Suppliers

The silkworm variety is the primary determinant of the characteristics of the
entire silk value chain. Currently the silk production in Thailand is almost
100% mulberry silk from three major Mulberry silkworm varieties; polyvoltine,
poly-bivoltine, and bivoltine. Detailed information is given below.
4.1.1 Native Mulberry silkworm varieties (polyvoltine, yellow cocoons)

The polyvoltine Mulberry silkworms varieties are varieties that farmers
traditionally produce, based on egg stocks that they maintain themselves.
These native silkworms produce small, yellow cocoons. The silk filament
length of a cocoon is about 250-300 metres. Most small producers reel
cocoons by hand and get a maximum of only 200 grams of silk yarn per day.
Industry Structure
Small rearers usually breed their own silkworm eggs from their own selected
silk moths. Most rearers do not have access to formal breeding stocks from
extension services but there is some informal trade in breeding cocoons
between rearers. As a consequence, disease transmission is relatively high
because of the use of non-certified stock. Silkworm eggs are often infected
with diseases such as Pebrine and Flacherie. Most native polyvoltine
silkworm varieties are, however, more tolerant to diseases and produce
more silk than poly-bivoltine and bivoltine varieties under comparable high
disease exposure levels.
52
4.1.2 Thai Mulberry silkworm hybrids (poly-bivoltine, yellow cocoons)

Thai Mulberry silkworm hybrid varieties are bred from native polyvoltine
(poly) and foreign bivoltine (Bi) parents. They produce yellow cocoons of
intermediate size that are usually hand reeled by the rearers although they
can also be reeled in factories. These varieties are mostly Poly x Bi, but it
can also means Poly x Poly, Bi x Bi, Bi x Poly, (Poly x Bi) x Bi. Poly-bivoltine
varieties produce about 600-800 metres of silk filament per cocoon.
Poly-bivoltine Mulberry silkworm varieties were developed for commercial
release in the early 1980s and extended to rearers in Thailand. The Dok Bua
variety was produced by the Department of Agriculture and proved popular
with some rearers; producing 50% more cocoons than polyvoltine varieties
when an additional investment in equipment is made. These new varieties
have some of the qualities of polyvoltine silkworms; being easy to rear, more
resistant to diseases and giving a better yield than the polyvoltine varieties.
Currently, QSIS and a few private companies such as Jim Thompson and JT
Silk are the main suppliers of improved (poly-bivoltine) silkworm varieties.
Photo 23: Yellow Silkworm Cocoons
4.1.3 Foreign Mulberry silkworm hybrids (bivoltine, white cocoons)

Foreign Mulberry silkworm hybrid varieties are bred from foreign bivoltine
parents. They produce large cocoons, which are suitable for factory reeling.
Bivoltine cocoons are usually white, with the exception of some of the newer
breeds. Bivoltine varieties produce cocoons with a silk filament length
ranging from 600 to 1500 meters.
Industry Structure
The major risk of bivoltine production is disease, and rearers must be

intensively trained on rearing technologies and hygiene requirements. The
silk filament is strong enough to be reeled by powered reeling machines and
can produce a high quality silk yarn for both weft and warp. At present, there
is only one company which dominates the supply of bivoltine silk namely;
Chul Thai Silk Co., Ltd.
Photo 24: White Silkworm Cocoons
53
Table 7: Advantages & Disadvantages of the different Silk Varieties in

Thailand
(Sources: QSIS, NEED, 2006 and Stakeholder interviews & Analysis by the Survey Team, 2007)
Silk Variety
1. Native
varieties
(Polyvoltine)
Advantages
Farmers can breed silkworm

eggs by themselves.
Very low cost
Disadvantages
Lower yield
Cause of disease
infestation
Tolerant to diseases
2. Thai Hybrids
(Poly-bivoltine)
Silkworm eggs
Susceptible to diseases
QSIS free of charge
Not suitable for rearers with
(occasionally)
QSIS sell at low price but

having limited supply
Extension services
QSIS occasionally provide

free input to farmers (rearing
houses, chemicals, silkworm
eggs, mulberry seedlings,
etc.)
unhygienic conditions
Unreliable quality
Inconsistent supplies
Free input from QSIS
(silkworm eggs, chemicals,
etc.) might discourage
rearers to develop
themselves.
Industry Structure
QSIS provide advice on
54
certified and recommended

parent breeds
3. Foreign
Hybrids
(Bivoltine)
High yield
Susceptible to diseases
Disease free eggs
High prices
Can be hatched at any time
High investment
Quick return/high income
High input costs

Rearers must be intensively
trained prior to handling
silkworm eggs
4.2 Rearers
Rearers are engaged in hatching silkworm eggs and rearing silkworms until
they spin their cocoons. They are responsible for retaining the quality of
cocoons by giving proper nutrition and care in the early silkworm stages.
Most rearers also have their own small mulberry plantations to grow fodder
for their silkworms. Rearers link to silkworm egg suppliers for obtaining
silkworm eggs and they also link to reelers by supplying them with cocoons
for further reeling processes.
Silkworm rearing can be divided into two main types; rearing for home
handicraft use and rearing for industrial use. The two types use different
varieties of silkworms. At the farm level, there is however a certain degree of
substitutability between silkworm types. This means that the value chains for
native varieties, Thai-hybrids and Foreign hybrids are not completely
separated. Farmers who rear silkworms for home-use usually undertake this
as a secondary activity, while their main occupation could be growing rice or
field crops, rearing livestock, or working as hired labour. Cocoons are
generally reeled by hand when polyvoltine varieties are reared. When polybivoltine varieties are reared the cocoons can either be reeled by hand or by
machine or even can be sold to a reeling factory. Farmers who rear bivoltine
varieties are usually contracted directly by reeling factories and are therefore
often not engaged in producing yarn. A list of advantages and disadvantages
of contract farming is given in Annex 11.6.
Local mulberry varieties have been almost completely replaced by improved

mulberry varieties in the major sericultural provinces of the Northeast.
Improved mulberry varieties are more productive, as they can yield 18-22
tons of leaves per hectare. The majority of the small farming sector relies on
natural rainfall to support the cultivation of mulberry, as irrigation and water
availability remains a major constraint for the Northeastern region.
Improvements in cultivation techniques have occurred over time as farmers
gain experience and also benefit from improved extension services provided
both by government extension services as well as technical assistance
projects from various international organisations such as the EU, JICA,
Kenan, etc.
Industry Structure
One of the primary inputs in silk production is the mulberry leaf, used to feed
silkworms. The mulberry planted area in Thailand is estimated at over 24,000
hectares, of which 20,000 hectares (83%) are in the Northeast. Mulberry
production in the Northeast is mainly concentrated in the provinces of
Mahasarakham (22.4%), Khon Kaen (14.7%), Surin (11.4%), Chaiyaphum
(9.1%) and Buriram (9.0%) respectively.
55
Jim Thompson has set up a network of contract farmers to which they will
supply poly-bivoltine silkworm eggs, rearing room fumigation services and
finally they will purchase back the cocoons. Drying facilities have been
constructed in Khon Kaen and Nakorn Ratchasrima provinces. Contracts are
made with farmers in a limited number of villages surrounding the drying
centres. In order to participate in the network, a farmer has to have a rearing
room separate from his house and a minimum of 0.3 hectare of mulberry.
Industry Structure
Photo 25: Silkmoth on Cocoon with Eggs
56
To become a contract farmer of Chul Thai Silk Co., Ltd. (CTS), a farmer has
to commit himself plus two other family members to work in the silk
production on a full time basis and he must plant at lease 2 hectares of
mulberry. In order to guarantee a reasonable return for the family labour and
to repay the production loans, a rearer must achieve an average yield of 25
kg. of cocoons per eggsheet which has about 20,000 silkworm eggs. CTS is
closely involved in the selection of farmers, who are screened for
creditworthiness by commercial banks. Technicians from CTS will survey the
proposed land area of every farmer who wants to join the scheme. These
technicians concentrate on confirming the suitability of available land, soil
physical structure and drainage. Farmers are also sent for training at the
CTS Training Centre. During the first two years of production, CTS
technicians supervise fumigation on the farm. This process is essential to
ensure success. The farmers are provided with second instar worms, which
are transported in air-conditioned vehicles. All outputs of cocoons must be
sold to the company. If they are discovered selling cocoons to any other
company they are immediately excluded from future participation in the
scheme. When the farmers deliver their cocoon they meet with officials of
the company to discuss problems. On delivery of cocoons, a farmer receives
10% of the value in cash. The remainder is paid through a bank account
from which the loan repayment is subtracted.
Reeling factories usually set cocoon prices based on quality (percentage of

defective cocoons, shell ratio and yield per box). Generally the price is
around 2.2 EUR per kg. but this varies depending on the cocoon quality. Jim
Thompson, for example, has set the price for Grade A cocoons at 3 EUR
per kg. in 2007.
Many (approximately 93,000) households in the Northeast are polyvoltine
farmers, who generally apply traditional practices and use their own breeding
moths or exchange moths with other farmers in the village. Substantially
fewer but more commercial oriented farmers in the Northeast and the rest of
Thailand produce poly-bivoltine varieties of silkworms (about 20,000
households). This is due to the limited supplies of breeding stock, the
improved technology needed for rearing and the reduced disease resistance.
There are approximately 7,000 farmers involved in production of bivoltine
silkworms and almost 100% of them are contract farmers. Cocoons are sold
to the company for further machine reeling at a guaranteed price based on
quality.
Conservative estimates value the yearly net income of traditional practice
rearers at 1,600 Baht per farm (about 36 EUR), Poly-bivoltine and bivoltine
farmers report a yearly net income of 30,000 Baht (about 682 EUR) and
115,200 Baht (about 2.618 EUR) per farm respectively. In rural areas,
sericulture is income generating for poor farmers who do not have much land
and little capital for investments. It also provides jobs for women and older
people in the villages, whilst at the same time it reduces migration of rural
people to big cities.
Industry Structure
Photo 26: Mulberry Field
57
Table 8: Characteristics of traditional and commercial rearers

(Sources: QSIS, NEED, 2006 and Stakeholder interviews and Analysis by the Survey Team, 2007)
Commercial Rearers
Items/Type of Rearers
Traditional
Rearers
Small Scale
Commercial
Scale
Polyvoltine
Poly-bivoltine
Bivoltine
(Native variety)
(Thai hybrid)
(Foreign hybrid)
1. Silkworm variety
2. Farm size
Small farmer
Small farmer
0.48 ha/farm
1.6 ha/farm
6 x 8 m2
8 x 16 m2
- No. of silkworm egg (box/

crop)
0.5
- Cocoon yield (kg./box)
12
18
30
33.9
960 (cocoon)
1.82
2.16
2.73
6. Price of raw silk (EUR/kg.)
18.18
20.45
7. Total income (EUR)
36.36
681.82
2,618.18
8. Income per unit area

(EUR/ha/year)
454.55
1,420.45
1,636.36
- Size of mulberry plot
- Size of rearing house
0.08 Ha/farm
Medium farmer
Empty space
under the
house
3. Cocoon production
Industry Structure
- Rearing (crop/year)
58
4. Raw silk production (kg./

year)
5. Price of cocoons (EUR/
kg.)
4.3 Reelers
Reelers buy cocoons from rearers and reel raw silk from these cocoons. The
quantity and the quality of raw silk largely depend on the amount and the
quality of cocoons and the used reeling technology. There are two types of
yarn produced in Thailand; hand reeled and machine reeled. These two
technologies correspond with the variety of cocoons to be reeled. Polyvoltine
varieties can only be hand reeled as the filament is not strong enough to be
reeled by powered reeling
machines. When hand
reeling, a reeler will put a
handful (about 20) cocoons
at a time into a pot of
boiling water. The filaments
of these cocoons are
gathered together and by
pulling the gathered
filaments the filaments will
unwind from their cocoons
and form a single multistrand thread. Most hand
reelers still pull the thread
by hand, but simple handpowered and motor-driven
reeling machines are
increasingly used as a way
to speed up the process
and produce a more even
yarn.
Photo 27: Hand Reeling
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 on size of the reeling
machine. The silk yarn produced by hand reelers is typically uneven. As
polyvoltine cocoons can only be reeled by hand it is difficult to standardize
the production as reelers have different capabilities and levels of skill for the
reeling process.
Industry Structure
In the Northeast, there are

more than 100,000 hand
reelers and approximately
10 reeling factories, with
one large reeling factory
from CTS located in
Petchaboon province.
59
Factory reeling with large motor powered machines is almost exclusively

done with bivoltine cocoons purchased from contract farmers. This reeling
takes place on a commercial scale, producing both weft as well as warp yarn.
Most of the yarn produced in Thailand is weft yarn as it is hand reeled yarn
with variable thickness. As a consequence, warp yarn needs to be imported,
mainly from China and Vietnam, and is often smuggled.
4.4 Yarn & Fabric Traders

There are more than 200 traders in the Northeast getting silk yarn supplies
from polyvoltine and poly-bivoltine reelers and bivoltine reeling factories.
Yarn traders at the village level sell mainly polyvoltine yarn. They sell to
individual households and dyers inside their village or in nearby villages as
well as that they trade with community, district and provincial level weaving
factories. District and provincial level traders normally sell yarn under
contract (both formal and semi-formal) to weaving factories within their
province or from different provinces. More than 200 traders in the Northeast
obtain silk fabrics from weavers. These silk fabrics are further supplied to
home textile producers.
Industry Structure
Besides yarns and fabrics, other raw materials or inputs such as dyes and
accessories related to dyeing, weaving and home textile production are also
provided by the yarn and fabric traders. Powerful traders usually establish
long-term relationships with their suppliers. They also provide delivery
services to far-away customers and offer credit for long-term customers.
60
4.5 Dyers
There are more than 200 dyers in the Northeast who are responsible for
dyeing the yarn. Silk colouring involves operations such as de-gumming,
bleaching and dyeing. Non-processed yarns are derived from three sources:
hand reelers, reeling factories (machine reelers) and yarn traders. Natural
dyes generally come from fruits, leaves, roots, etc. which are available
locally. Chemical dyes are also applied in the dyeing process due to the
scarcity of natural dyes and their drawbacks in terms of colour fading, limited
colour palette, etc. Chemical dyes can be obtained from yarn traders or local
input suppliers. After the process of yarn dyeing is completed, dyed yarns will
be distributed to weavers to be used in the weaving process.
4.6 Weavers
Silk weaving is done on handlooms as well as power looms. There are 5
different types of weavers involved in the weaving process in the Northeast;
handloom weavers, power loom weavers, handloom weavers with yarn
dyeing facilities, handloom weavers with yarn dyeing and printing facilities
and power loom weavers with yarn dyeing and printing facilities. The first two
types obtain dyed yarns from dyers while the last three types receive nonprocessed yarns from traders or directly from reeling factories (mainly CTS).
Generally most yarn producers tend to specialize in one of the three different
varieties of silkworms. As a result, only a small number of producers produce
both weft and warp yarns. Consequently weavers often have to purchase
warp yarn from reeling factories or yarn traders. As a result, most of the
fabrics produced by the traditional sector are a mix of yarn from local
(polyvoltine or poly-bivoltine) and foreign (bivoltine) silkworm varieties. The
few that are producing 100% Thai silk fabrics (without bivoltine yarn) are
primarily small-scale weavers.
Hand weaving is a labour intensive operation with a fabric length of 28 meters

requiring up to 20 days to weave. The differentiation of designs, patterns and
colour schemes is highly dependent on indigenous knowledge and skills that
have been transferred from generation to generation in each region. Silk
fabrics will be supplied to home textile producers as intermediate products to
produce home textiles or decoration items or supplied to printers in case the
weavers have no printing facilities.
Industry Structure
Photo 28: Silk woven on Handloom and Shuttles
61
4.7 Printers
Printing is a method of colouring fabrics. Small-scale weavers generally do
not have a printing capability because of the high investment costs. If fabrics
need to be printed they will be sent to printing factories. There are more than
30 fabric-printing factories in the Northeast. They charge for printing
according to pattern and number of yards. Printed silk fabrics will then be
distributed to home textile producers for sewing and finishing.
Industry Structure
4.8 Home Textile Producers
62
There are more than 300 home textile producers in the northeast who
undertake sewing and finishing in two different ways. One type of home
textile producer controls most of the supply processes starting with silkworm
raising, yarn making, yarn dyeing, hand weaving, until the final production of
home textile products such as
scarves, placemats, bed covers,
pillow cases, etc. The specific
designs and colours, as well as
weaving techniques reflect the
cultures of different rural
communities. The second type
of producer is producing home
textiles from materials acquired
in the market. These materials
include fabrics from handloom
weavers, fabrics from weaving
factories and fabrics from fabric
traders. As stated previously,
home textile producers require
proper professional design input
to cope with changing fashion
trends. In order able to adapt
quickly to changing demand, a
continuous development of
designs is required. Additionally,
a strong link with markets is
needed to understand customer
demands and preferences.
Photo 29: Silk Cushions
Figure 22: The process steps from silkworm rearing to home textile
products
Industry Structure
Although producers may have direct links with consumers in the chain, there
are many layers of middlemen/traders that clutter the supply chain. Forward
and backward linkages are weak and information is not freely shared among
the participants in the chain. Most producers do not get market information
and are thus unaware of the requirements of exporters regarding size and
quality. This is because most of their products are traded through informal
contract buyers, wholesalers, and wholesaler-retailers. The producers
situation is further aggravated by a lack of implementation of product grades
and standards that leave the producers with minimal control over the price of
their products.
63
4.9 Trading Agencies/Exporters

Trading agencies/ exporters source home textile products directly from local
home textile producers and supply these products to foreign buyers in
different countries such as the US, Japan, the EU, etc. There are more than
200 trading agencies/exporters in Thailand but only one large exporter (Jim
Thompson, officially known as The Thai Silk Co., Ltd.) is dominating the
market with a market share of over 50%. Jim Thompson is a successful case
of vertical integration in silk production. The company is supplying silkworm
eggs, producing its own yarn, purchasing yarn from smallholders for
processing, weaving, designing and printing its fabrics, tailoring these fabrics
in its factories and is marketing its products through retail shops named Jim
Thompson in many countries around the world.
Due to the differences between countries, all chain actors need to
understand each specific market and associated customer requirements.
Trading agencies/exporters usually have a well-diversified textile product
portfolio and their exports are also not limited to silk products and home
textiles.
Industry Structure
4.10 Traders / Domestic Wholesalers
64
There are more than 300 traders/domestic wholesalers who service local
retail outlets as well as traders/domestic wholesalers in other regions. These
markets receive fair to good quality products from home textile producers
with prices that are similar to those offered to trading agencies/exporters.
Traders/domestic wholesalers link producers to local retail outlets, provide
market access for producers, supply finished products to domestic chain
retail outlets and act as an information broker between the two. The
relationship between producer, trader and retailer is normally long-term and
informal, often with no written contracts. Business dealings are done based
on trust. Traders/domestic wholesalers buy home textile products from their
producers and pack these products according to orders from local retailers.
4.11 Local Retail Outlets

There are several local retail outlets such as street vendors and formal retail
traders who receive home textile products directly from home textile
producers or from traders/domestic wholesalers. Tourists and local people
are the main customers for street vendors. For the formal retail traders, there
are several fairs and exhibitions, organized by the government, both at
provincial as well as national level. National trade fairs which are very well
known include the OTOP and the Made in Thailand Trade Fair. The
Department of Export Promotion and the Community Development
Department are organizing the OTOP fairs 2 to 3 times per year. Provincial
trade fairs include annual fairs organized at each province.
Weak penetration, along with limited distribution channels characterize the

domestic market sector. In particular the high levels of counterfeit and
imitation silk being sold at all levels erodes consumer confidence in the
authenticity and value of Thai Silk. There is a potential opportunity to capture
more profits from niche target groups within the domestic market such as
high-end hotels, resorts and housing projects.
Industry Structure
Photo 30: Silk Scarves on Chiang Mai Night Bazaar
65
4.12 Supplying Industry
Industry Structure
Pre-production Stage
66
Cocoon production is labour intensive. Rearers reported that labour needs

are the most costly input, ranging from 52% of the total costs for rearing
polyvoltine varieties to 31% for bivoltine varieties. Apart from labour cost,
other variable costs are small for rearing polyvoltine varieties but these
variable costs become more significant when rearing poly-bivoltine and
bivoltine varieties. The total cost of mulberry production, for all silkworm
varieties, accounts for approximately 30% of total production costs.
For poly-bivoltine and bivoltine silkworms, rearers need to get new

silkworm eggs every time they start a new rearing process. Apart from the
contract farmers of a few companies, the poly-bivoltine silkworm is almost
exclusively supplied by QSIS. Poly-bivoltine farmers have a greater risk
than the polyvoltine farmers in terms of susceptibility to diseases and
dependency on the QSIS for the supply of silkworm eggs. They may be in
trouble if the QSIS cannot provide enough silkworm eggs for all farmers
that demand them. Currently, there is only one company (CTS) that
dominates the supply of bivoltine silkworm.
The rearing of silkworms requires specific environmental conditions,

particularly proper temperature, humidity and hygiene control. Currently
polyvoltine variety rearers are experiencing low cocoon outputs due to poor
management techniques and low hygiene standards and control.
According to sub-sector sources it takes about 20 grams of synthetic

dyestuffs to dye 1 kg. textile fabrics to a medium shade colour. To obtain
the same with natural dyes about 1 kg of dried leaves are needed, i.e.
equivalent to 5-10 kg. of freshly picked leaves. This means that natural
dyes are not a viable commercial alternative and they should primarily be
used for niche products only.
Acid dyes are the most commonly used chemical dyes for dyeing silk. Acid
dyes are used both commercially as well as by studio dyers to dye protein/
animal fibres such as silk, wool, mohair, angora, alpaca but also some
nylons and other synthetics. Acid dyes require the use of an acid such as
vinegar, acetic acid or sulphuric acid to set the colour. There is only one
European company (Dystar Thai Co., Ltd.) that supplies chemical dyes for
silk in Thailand. Other supplies in the market are mainly imported from
China and Japan. Chemical dyes can be obtained from yarn/fabric traders
or local input suppliers.
Production Stage
Washing is normally applied to natural dyed fabrics to remove excess colour
and to soften the texture. This washing will help to remove excess colour
but it is not an effective way to stop colour bleeding.
EU legislation restricts the use of arylamines (from AZO dyes) in textile
products marketed in the EU as arylamines pose a potential cancer risk.
This legislation is applicable to all textile products that may come into direct
and prolonged contact with human skin. Testing for AZO dyes is, at the
moment, often not required for Thai home textile products exported to the
EU but might be needed in the future.
Post-production & Exporting Stage

At this moment, there is no specific certification required for the export of
home textiles besides an AZO dye safe declaration although flame retardant
certification (often required in public exposure areas of hospitality venues)
and colour fastness testing are sometimes required by EU importers.
Certification schemes (e.g. for organic textiles) have not significantly
impacted Northeastern home textiles but there is a great potential to
implement such certification schemes successfully. Certifications that
comply internationally will in the future increasingly be required, accepted
and applied, particular by industrial buyers. (See Annex 11.7 for a full list of
available home textile tests from THTI)
Retailers and customers in the silk trade are often connected through postal
services and air transportation links, including international airfreight
forwarders like DHL, TNT and UPS. Depending on the export destination,
volume and time required and the relationship with an airfreight carrier,
outbound transportation costs ranges from 5-10% of the total costs.
There is no official quality standard (e.g. colour fastness, shrinkage by
washing, water absorption, etc.) for home textiles in the EU. Despite EU
harmonisation, which enables free trade between the EU member states,
individual markets have different requirements regarding quality, type of
fabric, standards, sizes, colours, etc. Accurate information is best obtained
from national importers. Most importers work with certain minimum
requirements. In this respect, they have often formulated and stipulated
minimum quality requirements for materials and make.
Industry Structure
There are two kinds of requirements regarding labelling in the EU:

mandatory and voluntary. The mandatory requirement for all EU countries is
the fibre content and composition of the textiles used. Optional labelling
consists of care labelling, washing instructions, origin marking and other
labelling such as size, brand or product name and other consumer
information.
67
5. Related Institutions & Efforts

Silk production in Thailand has a prosperous history. Considering its rich glory
in the past, many institutions and private companies are present or engaged in
the Northeastern Region, and might play a role as potential partners.
5.1 Institutions
The table on the following pages lists the names and the major functions of the
prominent institutions that are presently involved in the Thai silk sub-sector.
5.1.1
68
Queen Sirikit Institute of Sericulture
(www.qthaisilk.com)
The Institute, under the Ministry of Agriculture and Cooperatives, aims to be

the core organisation to respond to the overall processes of Thai sericulture
sector. The Institute has been established since October, 2005 by combining
Sericulture Institute, Department of Agriculture and Sericulture Sub-division,
Department of Agricultural Extension. The main function of the Institute is to
provide technical support to farmers in raw silk production, processing and
marketing of silk handcrafted products. The Institutes strategies are to
increase the production of domestic yarn to support silk handcrafted sector and
to promote high quality silk yarn at community level.
The Institute comprises 5 regional offices and 21 provincial centres. These

collectively provide core functions to support and promote silk production in the
country particularly at the farmers level. The major responsibilities in term of
sericultural promotion are described as follows:
Produce Native and Thai-hybrid varieties silkworm eggs and mulberry

cuttings/saplings to serve farmers in the neighbouring areas.
Transfer sericultural technologies to field officers and farmers.
Conduct research and development in order to promote sericulture

development in Thailand.
Table 9: Institutions involved in the Thai silk sub-sector
Name
1 Queen Sirikit
Institute of
Sericulture
including 5 regional
offices and 21
provincial Queen
Sirikit Sericultural
Centres
Type
Government
Major Functions
promote and support silk production,

processing and marketing of silk
handcrafted products
produce and distribute silkworm eggs

provide mulberry cuttings/saplings
transfer sericultural technologies to
officers and farmers
conduct research and development in

order to promote sericulture
development
2 Department of
Cooperatives
Promotion
Government
3 Department of
Industrial
Promotion
Government
4 Department of
Export Promotion
Government
promote and support farmers to form

cooperatives groups
knowledge on 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
markets for silk, import-export statistics
5 Community
Development
Department
Government
6 Thailand Textile
Institute
Government
promote and support villagers to operate

community business by developing
knowledge from local wisdom
cooperate with other organisations to

provide required technical support and
suitable standard certifications to textile
factories.
provide industry news and information

exchange among members and the
institutes foreign counterparts.
promote SMEs in terms of providing
69
Table 9: Institutions involved in the Thai silk sub-sector (Continuation)
Name
Major Functions
7 Textile Testing
Centre, Thailand
Textile Institute
Government
act as a one-stop centre that offers textile

material tests, quality assurance,
research for product innovations &
developments, consultation, special
training workshops, etc.
8 Thai Silk
Association
Association
promote the production and trade of silk

through cooperation with relevant
government agencies
Enhance competitive status by

strengthening member organisations
competencies
Promote, support, perform as well as

coordinate research development and
engineering including technology transfer
develop technological infrastructure and

human resource capabilities in related
fields
coordinate and facilitate strategic

collaboration and linkages between
research units, educational institutions,
industrial sectors and related
international institutions.
9 National Metal
and Materials
Technology
Centre
70
Type
Government
Figure 23: Administrative Organisation of the Queen Sirikit Institute of

Sericulture
71
5.1.2
Department of Cooperatives Promotion
(www.cpd.go.th)
The main function of the Department of Cooperatives Promotion is to promote

and support farmers to form cooperative groups to develop their businesses.
The department also helps strengthen the cooperative system, improve the
Cooperatives learning process in order to increase business management,
capacity, efficiency of the operation, and encourage upgrading the business
linkages to international levels.
5.1.3
(www.dip.go.th)
The Department of Industrial Promotion has promoted SMEs in terms of

providing knowledge on SME operation, commercial silk processing
techniques, financial linkage, consultancy service for new SMEs, etc.
72
5.1.4
Department of Export Promotion
(www.depthai.go.th)
The Department of Export Promotion is responsible to promote and provide

advice on export procedures, international market information on silk and
import-export statistics.
5.1.5
Community Development Department
(www.cdd.go.th)
The Community Development Department is the main department in Ministry

of Interior and is responsible for silk handcrafted products. Its main duties are
to promote and support villagers to operate community businesses by
developing knowledge from local wisdom to increase their incomes.
5.1.6 Thailand Textile Institute
(www.thaitextile.org)
The Thailand Textile Institute was established by virtue of a cabinet resolution

of 15th October 1996, at the initiative of all textile associations in Thailand,
endorsed by the Ministry of Industry. All parties involved shared the goal of
forming an autonomous organisation to focus on the development of the
potential of the Thai Textile Industry for Thailands sustained competitiveness
in the global textile market. The three missions of Thailand Textile Institute are:
to brainstorm ideas among the public and private sectors to formulate a

five-year national textile industry development master plan and amend this
plan to suit evolving circumstances,
to coordinate within the private sector and between the public and private
sectors to align Thailands textile industry development with the master
plan, and
to follow the assigned directives under the master plan for an operational
continuity and efficiency.
5.1.7
(www.thaitextile.org/ttc-lab)
The Textile Testing Centre (TTC) is a division of Thailand Textile Institute. It is

an independent textile-testing laboratory determined to serving the
manufacturers and exporters of textiles and garments in Thailand. Established
in 1999 with the government support from the Textile Industry Division under
the supervision of Ministry of Industry, The TTC is equipped with the testing
facilities and equipment. The laboratory is a one-stop centre that offers a full
cycle of services, ranging from textile material tests, quality assurance,
research for product innovation and developments, consultation, special
training workshops, etc.
The objectives of the institute are to upgrade the entire textile industry to
enable Thailand to become a quality textile manufacturing country in line with
the market rather than a low-cost one, and to equip the Thai textile industry
with the readiness to enter a value-adding age under the same free-trade
system as in developed countries
73
5.1.8
Thai Silk Association
(www.thaitextile.org/TSA)
The Thai Silk Association has been established by a group of leading silk
producers since October 2005 when Thai silk began to be recognised as a
significant sub-sector, both local and aboard. The objectives of the association
are to promote the production and trade of silk through such joint undertakings
as cooperation with relevant government agencies, exchange of knowledge
and technical information among members, and maintenance of standards and
improvement of quality.
5.1.9
74
National Metal & Materials Technology Centre
(www.mtec.or.th)
The National Metal and Materials Technology Centre (MTEC) is operating as

one of the technology centres under the National Science and Technology
Development Agency (NSTDA), The Ministry of Science and Technology
(MOST). MTEC was founded as a special type of government organisation,
which supports materials science and technology research and development,
including manufacturing and design for both public and private companies and
institutions. The objectives of MTEC are to promote, support and perform as
well as coordinate research, development and engineering including
technology transfer to the industrial sector, to develop technological
infrastructure and human resource development in related fields and to
coordinate and facilitate strategic collaboration and linkage between various
research units, educational institutions, industrial sector and related
international institutions.
Under the NSTDA policy to push forward and increase the potential of the
countrys science and technology in response to the economic and social
situation and needs of the country, MTEC adjusted its operational strategy
towards a program-based and integrative operation among the existing
national centres under NSTDA, so as to be in line with the development of the
major clusters, namely;
Food and Agro Industry
Medical and Public Health Industry
Automotive and Transportation Industry
Software, Microchips and Electronics Industry
Energy and Environmental Industry
Textile and Chemical Industry
5.2
Private Organisations
Two Leading Companies in the Thai Silk Sub-sector

Although there is no official data to show the level of concentration in the silk
reeling commercial sector, it is widely perceived that there are two leading
companies. Both companies have the main production in the Northeast and
are estimated to represent over 90% of commercial reeling sector in Thailand
(NEED, 2006). Notably, they employ almost all of the silk contract farmers in
the Northeast.
Table 10: Private Organisations involved in the Thai silk sub-sector
Name
Chul Thai Silk
Co., Ltd.
Private
company
Major Functions
supply silkworm eggs to the companys

contract farmers
produce and supply of bivoltine silk yarn

provide a sericulture training (mulberry
and cocoons production) for the
companys contract farmers
2.
The Thai Silk

Co., Ltd. (Jim
Thompson)
Private
company
supply silkworm eggs to the companys

contract farmers
process (de-gumming and dyeing) yarn

purchased from smallholders, weaving,
fabric designs and printing, and tailoring
in its factories
market products through specialized silk

retail stores owned by the company
under the brand name of Jim Thompson
1.
Type
75
There is an important difference between the two companies. Chul Thai Silk
Co., Ltd., which is part of the Chul Group, specializes in yarn production, while
associate companies of the group specialize in the supporting activities for
yarn production (silkworm eggs production, training for farmers, de-gumming
and dyeing). In contrast, Thai Silk Company is a more vertically integrated
business, that combines production activities from contract farming to
specialized silk retail stores; this company has established a successful brand,
Jim Thompson, which has been successfully used to market a wide
assortment of silk products (fabrics, garments, and home textiles) on the
domestic and international market. A concise description of the two
businesses is presented below.
5.2.1
76
Chul Thai Silk Co., Ltd.
(www.chulthai.com)
Chul Thai Silk Co., Ltd. (CTS) is the largest Thai company in the Bivoltine silk
yarn sector and other silk related businesses. CTS only produces and supplies
Bivoltine yarn. The company was first established as family business in 1936.
During that period, the company was known as The Chul Cunvong Farm and
was the largest tangerine farm in the country. In 1967, the tangerine trees
were affected by a serious virus disease, which disrupted the production. The
company then turned to the silk business. In 1968, Chul Thai Silk Co., Ltd. was
founded. The development of the company was facilitated by the national
policies in place at the time, which encouraged domestic silk yarn reeling as a
substitute for yarn imports. During the establishment of the Chul-Thai Agro
Industries Co., Ltd, CTS also created a joint venture with two Japanese
companies. During the first 15 years the company experienced continuous
difficulties but eventually was able to find suitable technology and development
began to take place.
In 1987, the Dutch Government through the Netherlands Development
Finance Company (FMC) donated a grant for the amount of 8 million Baht
(approximately 180,000 EUR) to CTS. This finance support was aimed at
establishing a non-profit organisation called Chul Thai Silk Foundation, which
became a Sericulture Training Centre for farmers. To date, the company
estimates that over 7,000 farmers have been trained by the foundation. The
courses cover both mulberry and silk cocoon production and the farmers
trained by the foundation become Chul Thai Silk contract farmers. Estimates
provided by the company indicate that its contract farmers earn a combined
income of over 7 million EUR annually.
At present Chul Group has grown to include 5 companies and one foundation
that are deeply rooted in the silk business, and cover all aspects of the subsector from silkworm egg production to silk yarn reeling. To ensure diversity,
one company within the group remains outside the silk business and is
involved in growing citrus fruits and fish products. It is estimated that the
company employs about 2,200 people directly, in silk yarn reeling and related
activities, and contracts around 6,000 farmers for cocoon production. In 2005,
Chul Thai Silks yarn represented about 75% of the domestic production of
bivoltine varieties. Its silk yarns are sold in both domestic and export markets.
Chul Inter-Silk Co., Ltd manages the export markets.
5.2.2
The Thai Silk Co., Ltd. (Jim Thompson)
(www.jim-thompson.com)
The business grew over the million-dollar mark in the 1960s and had a further
rapid expansion in the 1980s. According to the data provided by the company,
in 1967 (the year in which Jim Thompson disappeared under mysterious
circumstances), the companys turnover was approximately 1.3 million EUR.
The annual turnover expanded by 60% in a 5 year period in the mid 1980s as
the company responded to the renewed popularity of silk in international
markets and growth in the domestic economy accompanied by a dramatic
increase in the local tourist market. Currently the company ownership
comprises 51% Thai nationals with the remaining 49% owned by foreigners.
The company is a successful case of vertical integration in silk production. It
supplies silkworm eggs, purchases yarn from smallholders for processing (degumming and dyeing), and undertakes weaving, fabric designs and printing
and tailoring in its factories. All products are marketed through specialized silk
retail stores owned by the company under the brand name of Jim Thompson.
The main retail store is located in Bangkok where products are sold principally
to tourists. There are many competitors now, but Jim Thompsons name
remains synonymous with Thai silk. His Thai house still stands and is now a
museum run by the Jim Thompson Foundation that is popular among
international tourists.
James Harrison Wilson Thompson, a US born citizen, established the Thai Silk
Co., Ltd. in 1948. It is undisputed that Jim Thompson made a major
contribution to the Thai silk sub-sector, introducing distinctive quality, colours
and designs, and establishing a reputation for Thai silk in the international
markets. Major awards with which Jim Thompson was honoured are evidence
of the relevance and appreciation of his work. In 1962, in recognition of this
contribution to Thailand, the Royal Thai Government awarded Jim Thompson
The Order of the White Elephant.
77
5.3
Government Initiatives Taken to Promote the Silk Sub-sector
Beside the main function of government organisations mentioned above, the

Thai Government has undertaken a number of initiatives to support and
strengthening of Thai silk sub-sector, these include:
Encourage domestic consumption
The wearing of Thai fabrics, especially silk, has become increasingly

popular, particularly by the government's encouragement of cabinet
ministers to set the trend. However, buying silk is still limited to the well-off,
middle-aged and older women who place importance on elegant clothes
and social status. Civil servants were asked to support the government's
policy on a voluntary basis by wearing Thai fabric on Fridays but many
junior officials prefer modern fabrics that are lower in price and easier to
clean.
OTOP project
78
OTOP stands for One Tambon One Product. The government initiative
launched in 2001 to identify and promote unique products made by a
particular sub-district as a means of expanding the countrys domestic and
international trade as well as improving incomes of villagers.
The OTOP logo created by the Department of Export Promotion is a symbol
of excellence. It is awarded to those handcrafted items, including silk,
produced in village communities that reach the standards set by the OTOP
National Committee and have good potential for export. The Ministry of
Commerce plays an important role in marketing the unique OTOP products
by introducing the very best to local and international markets, besides
providing advice to local communities on design, packaging and quality
control.
Queen bestows quality emblem for Thai silk
Ministry of Agriculture and Cooperatives will use a peacock emblem

bestowed by Her Majesty the Queen to authenticate Thai silk and protect
the reputation of the fine silk products from imitation ones. The quality of
Thai silk had not previously been certified officially. This lack of
standardisation had made it hard to identify and maintain quality. The
peacock emblem is guarantee of quality, and assists in making Thai silk
more competitive globally whilst protecting silk farmers from exploitation.
The oval peacock emblem uses four colours indicating specific silk types
and production process: gold (premium, traditional methods), silver (classic
Thai, specific silkworm breeds), blue (Thai silk, allows chemical dyes) and
green (blends with other fabrics).
Gold Peacock for "Royal Thai Silk"

uses native Thai silkworm breeds, hand-made
production. The term refers to the type of Thai silk that is
hand-woven vertically and horizontally, using indigenous
hand spun on traditional handlooms. Either natural or
chemical dyes can be used, but the latter must be
environmentally friendly. The silk must be produced by
Thailand exclusively.
Silver Peacock for "Classic Thai Silk"

uses developed silkworm breeds, hand-made
production. This refers to the style of Thai silk that is
hand-woven vertically and horizontally using either
indigenous or adaptive hand spun methods on traditional
handlooms. Either natural or chemical dyes can be used,
but again, the latter must be environmentally friendly.
The silk must be produced in Thailand exclusively.
Green Peacock for "Thai Silk Blend"

is silk blended with other fabrics, no specific production
method. For this kind of silk, pure silk yarn is the main
component, supplemented by other fibres as a
secondary raw material. Any kind of loom can be used
but details of fibre components must be clearly identified.
Either natural or chemical dye can be used. The silk
must be produced in Thailand.
Figure 24: Peacock Emblems used for different Thai silk qualities
Blue Peacock for "Thai Silk"

uses pure silk threads, with no specific production
method. Only pure silk yarn is used in this kind of silk,
which is woven vertically and horizontally on any kind of
loom. Either natural or chemical dye can be used. The
silk must be produced in Thailand.
79
6.
The value chain splits for products going to export and domestic market.
Consequently, two value added tables were prepared as follows:
Table 11: Generated Value in the Export Silk Home Textiles Chain
(Source: Stakeholder interviews and Analysis by the Survey Team, 2007)
Chain Actors
Cost
Sales
Value
Added
Value Added along the

chain (%)
Include
Retailer
80
Exclude
Retailer
Rearers
43
56
13
0.43%
1.56%
Reelers and Dyers
56
84
28
0.93%
3.39%
Handloom Weavers
84
319
235
7.84%
28.46%
Home Textile
Producers
319
526
207
6.92%
25.10%
Exporters (FOB)
526
868
342
11.43%
41.49%
Foreign Retailers
868
3038
2170
72.45%
Remarks:
1. Value addition is calculated based on one square metre of high-end silk fabric
2. Value addition is calculated for a simple silk home textile supply chain
3. Value addition is not necessarily representative for all home textile products value chains
4. Value added for rearers is approximately 30%
5. Value added for reelers and dyers is approximately 50%
6. Value added for handloom weavers is approximately 380%
7. Value added for home textile producers is approximately 65%
8. Value added for exporters is approximately 65%
9. Value added for foreign retailers is approximately 350%
10. Value addition at each stage can be improved by design, style, tactic, expertise, brand e.g. a
special design table linen will sell for EUR 200 against the same quality with simple design selling at
EUR 50
11. Rearers are highly depend on amount and effective use of labour (paid or family) and chemical
inputs and the impact on yield.
Expressed in a pie chart, rearers, reelers and dyers add less than 5% per
square metre of the value for silk home textiles, while handloom weavers,
home textile producers and exporters contribute 28%, 25% and 41%
respectively (excluding foreign retailers). Foreign retailers were not integrated
in order to more clearly show how much of the value each of the domestic
actors is retaining. Taking into account that home textile producers and
exporters are in many cases different branches of the same companies, this
group controls a majority portion of 67% of the value added.
Figure 25: Percent Value Added in the Export Silk Home Textiles Chain
Photo 31: Silk Fabric Shop
81
Table 12: Generated Value in the Domestic Silk Home Textiles Chain
Chain Actors
82
Cost
Sales
Value
Added
Value Added along

the chain (%)
Rearers
43
56
13
2.23%
Reelers and Dyers
56
73
17
2.90%
Handloom Weavers
73
204
131
22.74%
204
265
61
10.60%
Wholesalers
265
344
79
13.78%
Retailers
344
619
275
47.75%
Remarks:
1. Value addition is calculated based on one square metre of silk fabric
2. Value addition is calculated for a simple silk home textile supply chain
3. Value addition is not necessarily representative for all home textile products value chains
4. Value added for rearers is approximately 30%
5. Value added for reelers and dyers is approximately 30%
6. Value added for handloom weavers is approximately 280%
7. Value added for home textile producers is approximately 30%
8. Value added for wholesalers is approximately 30%
9. Value added for retailers is approximately 80%
10. Value addition at each stage can be improved by design, style, tactic, expertise, brand etc.
11. Rearers are highly depend on amount and effective use of labour (paid or family) and chemical
inputs and the impact on yield.
The following actors control the following shares of the value generated in
the chain from production to retail consumption:
Figure 26: Percent Value Added in the Domestic Silk Home Textiles
Chain
Compared to export silk home textiles, producers of domestic silk home

textiles control a smaller portion (11% of the value added. Retailers control a
majority portion of 48% of the value added. Wholesalers and retailers make
up more than 60% of the value added in the domestic market.
Photo 32: Silk Bolts in Jim Thompson Shop, Bangkok
83
7.
Competitive Advantages & Sector Strategy
7.1 General Review in Thailand
84
There are low barriers to entry in the sector for a number of reasons. Home
textile production does not require high investment, the bargaining power of
buyers depends on consumer preferences. Silk home textile products from
different regions are unique. The threat of substitution, therefore, does not
come from other product type but mainly from other production areas.
New chemical fibres are more refined and similar in terms of look and feel as
that of silk and are easier to care for. Therefore, consumers of silk products
may switch to substitutes which look alike but where cost is lower.
Due to the high level of competition in domestic markets and also the low
switching cost for substitute products, buyers have power to dictate prices.
This is partially due to an increase in domestic production along with steady
demand. In general, buyers are able to source home textile products that
provide good quality and design at the lowest prices.
The supply industry, including yarns, fabrics and other accessories, has
moderately high bargaining power. This is because the majority of home
textile producers in Northeastern Thailand are small-scale producers who
invariably buy local available inputs in order to produce home textile
products. Hence, the increasing input costs force producers to use greater
amounts of capital. Producers have expressed their concerns regarding
rising production costs against the downward trend in the market price of
home textiles. As producers need inputs and buy them in small amounts,
suppliers have strong power. If producers adopt collective purchasing
initiatives, their bargaining power would increase however has not yet been
systematically capitalized.
Power Loom & Handloom
Photo 33: Power Loom
To compare the productivity and efficiency of handlooms and power looms,

similar fabric is assumed to be produced on the two types of looms. The type
of yarn used is 100% silk and the weft and warp yarns are dyed. Yarn dyeing,
sizing and warping costs are similar for the two types of technology. For
power looms, the labour costs for one weaver and one fitter, are typically
distributed equally across four power looms. In handlooms labour cost
involves only one weaver. The simple analysis of cost and efficiency reveals
that the commercial operation of handloom weaving is viable only if the
producer is able to effectively market product as a distinct product, differently
to industrial textiles (power loom weaving) and charge a premium on the
average market price.
The productivity of handlooms is nevertheless the lowest in comparison with

other weaving technologies. The productivity factor has played an
instrumental role in the shift of fabric production from handlooms to power
looms. On average, a handloom produces 1 - 2 metres of fabric in one day
(8-hour shift) and one weaver is required to operate a loom. In terms of
square metres, the production is around 2 3 square metres per day (8-hour
shift). The production of fabric on power looms is more than 5 times that of a
handloom and instead of one weaver handling one machine, one weaver can
manage four power looms.
85
Polyvoltine and Poly-bivoltine and Bivoltine Silk Yarn
In Thailand, the polyvoltine yarns are not competitive internationally,

particularly against imported Chinese and Vietnamese yarns. The World
Bank (2006) noted that labour costs, which represent the majority in total
costs; need to be reduced by 56% before making polyvoltine yarn
internationally competitive. Given the fact that small reductions in wage
returns to rearers result in significant numbers of them leaving the subsector, it is unlikely that such reductions in costs would be ultimately
beneficial to the sustainability of the sub-sector.
86
Photo 34: Machine Winding of Pirogues
Like the polyvoltine yarns, the poly-bivoltine and bivoltine yarns are not
internationally competitive against imports of Chinese and Vietnamese silk
yarn. Labour costs also form the majority of the costs along the chain, but the
composition of labour cost varies between the different chains; for example,
in the bivoltine yarn production chain, the major labour cost is for reeling,
while in the poly-bivoltine chain, the major labour cost is for cocoon
production. The World Bank (2006) indicated that labour costs would have to
reduce by 66 and 62% respectively in order for the production to become
competitive internationally. Like the case of the polyvoltine chain, reduction in
wages for the poly-bivoltine and bivoltine production would have negative
implications for the sustainability of the two yarns.
The implication of the competitiveness study for the poly-bivoltine and

bivoltine production are similar to that for the polyvoltine varieties; it is
unlikely that substantial changes is underlying cost structure would achieve
competitiveness against imported Chinese and Vietnamese yarns. As a
result, rather than trying to reduce the prices of Thai silk yarns to compete
against imports, it may be better for Thailand to increase quality and capture
the high value segment of the market.
Possibilities for niche marketing do exist but it is essential for Thai products
to be well differentiated, correctly labelled and well branded.
The question then remains as to what the polyvoltine production can do to

improve competitiveness. Increasing yield and improving production systems
are important areas to investigate in this regard. Also, a change in production
from polyvoltine to poly-bivoltine would go someway to achieving this goal.
However, changing the Thai silk sub-sector from polyvoltine to poly-bivoltine
production runs the risk of losing the characteristics, which make the subsector what it is. Polyvoltine yarns are used to make high quality fabrics
appealing to the segment of the market that values traditional hand woven silk
above mass-produced silk fabric. Rather than trying to compete on price (a
losing strategy which involves a race to the bottom with a corresponding loss
in quality), the producers of Thai polyvoltine yarns should perhaps accept that
they cannot compete on price against mass-produced silk yarn and should aim
for high valued niche markets trading on the appeal of hand woven traditional
silk products.
87
Table 13: Issues to be addressed in the Thai Home Textiles Sub-sector
88
Sector
Producers
Increased understanding of foreign
Increased understanding of foreign
markets
Improved ability to develop informed
long-term planning and foreign market
access strategy
markets and market needs

Increased ability to access foreign
markets
Focused understanding of future

research needs
Improved understanding of future

development needs
Inputs/Materials Supply
Sales/Pricing
The unreliable supply of raw materials
Many producers struggle to find the
is a major hurdle to accepting orders

(especially large orders) as delivery
dates cannot be guaranteed;
producers may develop a bad name in
the industry as being unreliable in part
due to these issues.
optimal pricing for their products,

which is further exacerbated by them
not understanding the value of their
products in international markets.
Product Identification
Market Identification
To date, much of the identification of
While some market information may
products for exports has been ad hoc

on the basis of interest from individual
buyers.
There are inadequate feedback

mechanisms/channels to encourage
constructive criticism and feedback to
local producers to develop products
and produce them in accordance with
export market requirements and
preferences.
Producers would like continually

updated research (seasonally) relating
to specific high opportunity products.
be held by trading agents/trading

houses, this has tended to focus on
their specific client base, and is
primarily used for internal purposes
rather than being widely available to
industry members.
Support structures hold some market
information, but this is not necessarily
in an easily digestible format currently,
and is not always up-to-date.
Insufficient capacity is currently

available to coherently provide
support to the majority of the sector in
identifying the most appropriate
product-market combinations.

(Continuation)
Marketing
In general, producers have a lack of

business and marketing skills
Producers are often so caught up in
Market research and product

development is very limited.
No forum for feedback, which is
required to drive product

development.
Lack of information on trends for both
existing and emerging 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 as the commercial focus
becomes the priority and producers
focus on meeting immediate orders.
There are high quality designs and
stylist talent in Thailand, but this is
not always matched successfully 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
towards exposure to and
interpretation of international trends
Production
Industry Marketing
Orders are not regular and it is
Lack of dedicated and coordinated
therefore unsustainable to maintain

fully-fledged production lines, resulting
in significant contract (non permanent)
employment.
Many producers are unaware of the
quality requirements in particular
export markets.
Many emerging producers are unsure
of their own ability to deliver large
volumes as a result of various
production related issues and are
therefore reluctant to commit to
supplying very large orders.
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.
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.
the cycle of produce and sell that

they do not have time to conduct
marketing research
Very few producers are able to
produce their own promotional
material
Producers who do on an individual
basis, or have attempted to, market
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 way to understand the
market and be exposed to it.
Producers have little or no marketing
experience and quickly lose interest
after unsuccessful marketing
attempts.
Many within the industry do not have
the capital to fund marketing
initiatives.
Texture of the product is key to the
purchasing decision, and is therefore
being able to touch and feel the
product is a vital part of marketing.
Design Application, Trends Analysis

and other R&D
89

(Continuation)
Export-Specific Support
Exporters
Product is not the problem; rather
Buyers in the sector tend to rely on
local producers fall short in their

organisation of production capacity
necessary to guarantee the volumes
and quality demanded by
international buyers.
90
Producers view exporting as an

extremely intensive process with
many different results and therefore
dont explore export market
opportunities.
touch and feel to make their purchasing

decision, with texture and 3dimensional look being important
purchasing criteria.
Reliability and consistency of

production is acknowledged as a hurdle
to successful exporting, in terms of
volume, quality and on-time delivery.
In some cases, there may be significant

difficulties in ramping up the volume of
production, particularly given cash flow
constraints, unpredictable orders, and
the ongoing obligations to a workforce
that may develop if expansion is
required to meet an order. In the past,
this has resulted in some cases of
producers turning down potential export
orders. Some producers have partly
addressed this through collaborative
production and/or training people and
setting them up in outsourced
enterprises that do not result in
obligations to salaried workers.
7.2 Competitive Analysis
Worldwide supplies of handloom products are ample; buyers have a number

of choices to select from. Suppliers will have to distinguish themselves and/
or create new markets in order to stay competitive. Thailand is a mid-level
challenger to the industry leaders such as China and India in that they have
significant share in EU markets. Thailand however, is still following in terms
of production systems, market intelligence, quality control, product design
and innovation.
Low to Mid-end Segment

Products from China dominate the low-end segment. The South Asian
countries, such as India dominate the low to mid segment of the market.
The extremely low cost of manufacturing in these countries (due to low
labour and materials costs) makes it difficult for producers from other
countries to compete with them on price. The availability of high quality,
domestically produced textiles in these countries has ensured a constant
supply at minimal cost.
The price competitive, low-end segment of the market is a difficult one for
Thai exporters to compete in due to the high costs of shipping, combined
with Thailands production costs. This makes it difficult for Thai exporters to
be price competitive.
The Northeastern home textile sector does not have a clear strategic
direction or marketing strategy. Despite the existence of various exporters,
they are fragmented, with self-interest and short-term profit maximization as
a prevailing behaviour. Well performing silk enterprises, such as Jim
Thompson, are self reliant with no desire to undertake collaboration outside
their own spheres. Clear public policy is also lacking. In terms of marketing
(and branding) in particular, the Northeastern home textile sector is still
weak. Awareness of international (including EU) trends and issues,
particularly beyond the medium-sized exporters, is limited.
91
High-end Segment
Italy and France dominate the high-end segment of the market. Branding is a
key component of the high-end products, as it promotes exclusivity. Both
Italy and France have successfully branded their products.
92
Italy has been traditionally the largest producer, as well as importer and
exporter of silk products in Europe. Italy produces 91% of all the silk
products produced in Europe and is well known for highly developed skills in
silk processing (finishing, dyeing and printing silk fabrics). Processing of silk
is highly clustered in a single industrial district, around the city of Como
located close to Milan covering almost 80% of silk production and
processing in Italy. In Como, the annual production totals 3,200 tons of the
silk products, (materials for clothing, upholstery, decorating fabrics, scarves,
ties and shawls). This production for silk products generates export value of
about 1 billion EUR per year.
France is another country with a considerable silk processing industry. As is
the case in Italy, the industry in France is geographically concentrated and is
located around the city of Lyon. This industrial district is producing silk
fabrics of the highest quality for domestic consumption and for export.
Traditionally, more than 70% of the silk fabrics in the French market have
been used for apparel. France exports top quality silk fabrics to the US
market, with unit prices reaching 20 EUR per square meter.
Photo 35: Silk Cloth
Opportunities exist in each of the segments. The middle segment is by far

the largest, with the largest number of shops and fastest moving collections.
Both the high and the low segment are more difficult to enter: the high
segment because of the focus on European brands and products, and very
high demands on design, materials, workmanship, quality control and
packaging.
As mentioned before, the price trends in the EU market indicate that most
Thai home textile producers are unlikely to be able to compete in the low end
of the market. Thai exporters therefore need to position themselves in the
medium to high end of the market in order to be able to compete and make
exporting worthwhile. Generally, medium to high end market requirements
include:
Quality of materials
Reliability of supply
Excellent design application
Branding much of the high-end market for home textiles in the
mainstream retailers is depending on brand names and designer labels, or
acceptance as a supplier of own brand/private label goods.
Photo 36: Silk Fabric
Goodwill and consistency are essential for survival in this sector. The
competition faced within this sector must be conducive to innovation and
creativity with regard to silk products. So, product design, development and
constant improvement become even more important as these are the
parameters that determine the market demand, facilitate the brand image
and generate higher profit margin.
The market for home textiles Silk sub-sector has weathered competition
from lower cost countries. Countries well known as exporters of silk home
textiles to EU markets include China, India and Vietnam. All of them seem to
be the main competitors of Thai home textiles.
Quality of workmanship
93
7.3 Summary of Competitors
China
94
China held a leading market share in the EU

market for home textile products (16% of the
world exports to the EU) with export
revenues of about 982 million EUR in 2005.
China is also the worlds largest producer
and exporter of home textiles. China has
invested in more spinning and weaving
equipment than any other country during the last 5 years. Moreover, Chinas
huge supply of inexpensive labour and skilled sewing machinists, coupled
with access to indigenous raw materials, has enabled the Chinese home
textile industry to remain highly price competitive and attract foreign direct
investment (FDI) in facilities and technologies. The industry also is
considered to have efficient management and the technical know-how to
produce virtually any home textile article.
China, an industrialized country focused on specialist mass production, is
classified as a large scale and high quality factory producer. Minimal local
cultural/ethnic products are exported from China. The prevailing orientation
towards copying, counterfeiting and licensing weakens the development of
creativity and massive flows of foreign investments have become a substitute
for domestic entrepreneurships. There are however signs that China is under
pressure and is not necessarily sustainable.
The development of Chinas home textile export industry will be a key issue
affecting world trade in home textiles in the coming decade. Total imports of
home textiles from China to EU markets increased strongly; from about 10%
in 2003 to about 16% in 2005: an increase of about 60 to 70%. All quotas in
the textile sector were eliminated as of 1 January 2005. However, due to
certain developments during the first month of 2005 regarding EU imports
from China led to a new agreement, in which a limitation was placed on the
growth of Chinese textile exports to EU until 2008 (CBI, 2006). This
agreement between the EU and China covers several product groups of
home textiles, like bed, table, bathroom and kitchen linen. This quota
between China and EU has created opportunities for other developing
countries.
Trade data reveals that Chinas share of the EU market has increased
markedly in products for which quota restrictions have already been
removed. Several retailers indicated that they have shifted sourcing of their
home textile products to China from such countries as India, Philippines,
Thailand, and Malaysia.
With the changing production pattern over time, China has emerged as the
world's largest producer (90%) and exporter of raw silk, accounting for 90%
share of global exports. China was the birthplace of the production of raw silk
and silk weaving. The fibre produced was so treasured that it became a
measure of currency and reward. The imperial courts in China even
established factories to weave silk fabrics for ceremonial use and for gifts to
foreign powers.
Chinas silk trade is being challenged by its foreign counterparts including
India, Vietnam and Thailand. The stylish silk fabrics of Thailand and India,
and the low-priced raw silk of Vietnam also pose a great threat to Chinas silk
trade. The lack of well developed silk brands and poor promotion of Chinese
silk products has also hampered the sectors exports. Sometimes, Chinamade silk products are made from raw domestic silks and packaged as part
of Italian brands, which are then sold at international prices. This scenario
has done little to help raise the profile of Chinas silk products.
India
India produces and exports an impressive
range of home textile products and has a wide
range of product capabilities, production
capacity, quality management and product
development skills. India held about 10%
share in the EU market with export revenues
of about 614 million EUR in 2005. Indian home textile handcrafts are in
demand globally, with home textile exports expected to increase from about 1
billion EUR in 2006 to about 4 billion EUR by 2010.
Besides large turnover and exports in home textiles, China has not identified
itself with the production or branding of any famous home textile brands in
the global market. This is due to the lack of fine designers in the home
textiles field and less aggressive approach by many domestic textile
manufacturers especially compared with other overseas regions. But, still
China is trying to increase its market share worldwide in the home textiles
segment. The Chinese domestic home textiles industry has been undergoing
great changes. Additionally, manufacturers are also attempting to set up
close co-operative relationships with textile institutes to develop more
capable and specialized designers.
95
With its large supply of relatively low-cost labour, India is known for its
capacity to provide relatively labour-intensive embellishments to home textile
products such as hand embroidery.
96
In many respects, the workmanship and level of education of the Indian

craftsmen is higher in the Indian industry in comparison to their counterparts
in China. Indian producers should leverage this apparent gap to the greatest
extent. Indian companies can better recognized the requirements of the
buyers and can strategize correspondingly. India is regarded as a major
alternative source of supply to China for fabrics and textiles. Retailers and
suppliers acknowledge that India can remain competitive because of its
large, relatively low-cost labour force, a large domestic supply of fabrics, and
the sectors ability to manufacture a wide range of home textile products. EU
retailers described Indian firms as innovative, particularly in design functions.
Poor infrastructure was cited as a concern, but not as a factor that will
necessarily influence investment and sourcing decisions.
Indian traders are shifting to higher-valued products in comparison with
Chinese competitors. Indian products are more focused towards innovation
and quality. Visible efforts in quality improvement, innovations through R&D
programmes, and other value-added features bring a whole new dimension
to Indian products. In turn this resulted in higher profits as compared to other
regional producers. A combination of factors such as low cost of production,
skilled manpower, increasing absorption of world class technology is
improving the acceptability of the Indian silk home textile products in the EU
markets.
Compared with Thailand, there are several favourable factors that make
India one of the most threatening competitors for Thailand in the
international market. Beside factors mentioned above, particularly for
European markets, the country is a threat due to a good relationship with EU
markets especially the UK. Nevertheless, Thailands inbound transportation
is better than Indias.
India is the world leader in raw silk imports, holding a 33% market share.
India has become the largest importer of raw silk, despite the fact that it is
now the second largest producer (13%) of raw silk after China (70%). In India
local demand greatly exceeds supply, which limits export growth potential.
India has the unique distinction of being the only country in the world
producing all the commercially known varieties of silk - Mulberry, Tasar, Eri,
and Muga. Growing demand for traditional silk fabrics and exports of
handloom products drives raw silk demand in India.
Vietnam
Vietnam is in a competitive position to capture the market because of its cost

advantage and tradition. Vietnam has emerged as a major player in the world
silk market over the last decade and is expected to continue to steadily
increase and be a potential threat to countries like China, India and to some
extent to Thailand. Vietnam would be able to compete in terms of volume and
price in EU markets. However, Vietnam will have to pay serious attention to
quality control issues that have been a problem in the past.
A summary of main competitive advantages is given on the next page in

Table 14.
Several informants for this study expressed

concern about Vietnams entry into the
marketplace. Reliable statistics are difficult to
find in order to verify the current production
situation. The availability of domestic raw silk in
Vietnam has been an important factor in the
development of its silk home textile sector: it is
the worlds third-largest producer of raw silk (9%) after China and India.
Vietnam provides a more limited range of home textile products than India,
but is considered a competitive supplier of silk home textile products in EU
markets. In 2005, Vietnam held about approximately 1% share in the EU
market with export revenues of about 60 million EUR in 2005.
97
Table 14: Competitive advantages of Thailand versus key Competitors

(Source: Resource people interviews and review of CBI and THTI data by the Survey Team, 2007)
Key
Competitor
China
98
Thai Advantages
Competitor Advantages
Smoother inbound logistics
Higher volume
EU may want to diversify

suppliers
Cheaper prices
Big market share
Growing handicraft trade trend

Availability of cheap labour
EU-China textile quota
Interested investors
Higher technology
India
Smoother inbound logistics
Higher volume
Cheaper prices
Big market share
Availability of cheap labour
Relations with the UK market
Design expertise
Higher technology
Vietnam
Smoother logistics
Higher volume
Better standards
Cheaper prices
More consistent labour supply
Initial benchmarks and a full explanation of the scoring system of silk home
textiles for Thailand and other key competitors are provided in Annex 11.2.
7.4 Competitive Strategy

As mentioned before, Northeastern home textile producers and exporters,
not including the big players, i.e. Jim Thompson, Shinawatra, Anita, Silk
Avenue do not have a clear, shared vision or strategy for the sector.
The major challenges to the silk sector in Northeastern Thailand are how:
to improve its position in the world handloom silk trade,
increase returns to stakeholders along the marketing chain,
lower costs,
improve productivity, and
increase value added.
Part of the challenge is to recognize that innovation and governance along

the value chain are key elements of any strategy aimed at maintaining and
ultimately increasing the profitability of the silk sub-sector. It is not just a
matter of trying to reduce costs and increase productivity, but rather to
increase the returns to the products being sold.
Creating a sustainable competitive advantage would come from efficient and
sustainable production systems, the combination of value chain linkages,
better supply chain management, accompanied by a focus on niche
products, improved design and marketing. Based on the analysis of
secondary information, (conducting interviews and holding discussions), the
following competitive strategies for the Northeastern home textiles were
identified.
99
To increase its EU market share, Northeastern home textiles should build

up loyalty amongst its (current and future potential) consumer base by reenforcing its reputation for handmade items; social and cultural heritage;
environmentally friendly products; unique and distinctive characteristics of
design, technique and presentation; consistent and premium quality while
at the same time selling at reasonable prices.
The sector will need to upgrade its adherence to standards and quality
(e.g. design) in order to build a solid reputation.
100
Improving production systems could increase yields, reduce supply input

and ensure consistent supplies.
Market development is also important. Possible market development
includes non-mulberry silk, fair trade, organic and natural dyed niche
market.
Table 15: Northeastern Silk home textiles: Industry Strategies &

Interventions, Importance of Strategic Targets
(Sources: Stakeholder interviews & Analysis by Survey Team, 2007 and Validation workshop, 2007)
Research trends & opportunities
Very Relevant
Product Innovation / Upgrading
Incubate new products

Enable design innovation
Improve quality of raw material
Relevant
Quality Improvement
Improve weaving technique

Increase productivity
Define quality standard along the value
chain
Improve production efficiencies
Medium-term relevant
Cost Reduction
Appropriate technology solutions

Improve cost-efficiency of logistics
Based on the findings of this study, the Northeastern home textiles sector
should focus on the following issues to increase its exports to EU markets.
Focus on expanding EU markets,

upgrading quality and improving
marketing and linkages. Potential
opportunities are addressed through
the following interventions: improved
productivity, defining quality standards
throughout the chain, improving quality
of raw materials, improving weaving
techniques, and improving ecoefficiency along the value chain
(energy-saving, waste avoidance and
reduction and efficient wastewater
treatment models).
Target cost reduction through process
improvements. Related interventions
are needed to address cost-effective
farming, improved production
technologies (equipment, tools and
device development) and logistics.
Photo 37: Handloom
Thailand will only be able to expand market shares and challenge the EU
markets if product innovation and quality upgrading are successfully merged
in highly competitive value oriented pricing strategies.
Research, development and the incubation of product upgrades/

innovations such as non-mulberry silk home textiles, natural dyed home
textiles, organic home textiles and fair
trade home textiles for EU niche
markets. Focus on enabling design
innovation and developing the market
by timely response to changing
customer
preferences
and
requirements through more direct
marketing and a proactive export
development approach.
101
8.
8.1
Rearers
8.1.1 Specific Constraints

Rearers face different constraints depending on the variety of silkworm they
produce.
Polyvoltine Varieties
102
Low cocoon yield

Polyvoltine varieties have a low yield in terms of the number and size of
cocoons as well as the length of silk filament. Rearing conditions are
often rather dirty as rearing areas may be located next to livestock
shelters or being used also for general storage without any concern
about cleanliness. Native silkworm varieties can survive these conditions,
but will give low cocoon and filament yields.
Poly-bivoltine Varieties
Dependency
Besides the contract farmers of a few private companies, poly-bivoltine
rearers are dependent on the QSIS as the sole egg supplier. The need to
procure silkworm eggs from the QSIS means that they are vulnerable to
supply shocks if the QSIS cannot provide enough silkworm eggs for all
the rearers that demand them.
Variability in quality of the poly-bivoltine silkworm eggs

During the field interviews a common compliant was the variability in
quality of the poly-bivoltine eggs obtained from the QSIS. It is unclear
whether this is caused by poor breeding protocols within QSIS or by poor
management of rearers (resulting in increased susceptibility to disease).
Bivoltine Varieties
Dependency
Almost all bivoltine rearers are contract farmers. Bivoltine rearers are
dependent on the contracting company as the sole buyer of their
products. The company dominating contract arrangements in the
Northeast is Chul Thai Silk Co., Ltd.
8.1.2
Common Constraints
Apart from specific constrains all rearers face also several common
constrains.
Mulberry shortage
Mulberry disease
Root-rot is the most common disease that affects Mulberry in Thailand. It is
one of the major problems faced by rearers as the spread of mulberry root-rot
is gradually wiping out large stands of mulberry. The disease spreads very
easily and contaminates the soil. The DOA, DOAE and QSIS are trying to
overcome this problem through a special mulberry-breeding program but so
far there has no certified root-rot resistant mulberry variety been developed.
There appear to be however two varieties with some level of resistance; an
improved variety called Buriram 60 and a local variety call Khun Pai.
A common complaint amongst interviewed rearers was the difficulty of

obtaining enough mulberry leaves to feed their silkworms. The shortage of
mulberry leaves represents one of the main constraints of sericulture.
Rearing size is limited by the availability of mulberry leaves. Silkworms are
often under fed because the rearers raise too many silkworms compared to
the quantity of available mulberry leaves. The main reasons for this shortage
of mulberry leaves is die to limited land availability, the land tenure system as
well as the climate.
103
Poor management technique and low hygiene control

Polyvoltine variety rearers are normally small farmers with limited mulberry
areas who produce their own silkworm eggs and reel their own yarn for their
own looms. Most of these farmers consider sericulture as a sideline activity
and therefore are not too interested in improving their productivity if it means
a substantial change in their activity schedule. Native mulberry varieties are
usually grown by these farmers, which are low yielding and grown on infertile
soils. Most farmers raise silkworms in or under their dwelling places, using
bamboo trays covered in old clothes or loose material to keep flies from
infecting the silkworms. This absence of an appropriate rearing house leads
to a decrease in quantity and quality of cocoons as well as a decrease in the
price of cocoons. Both the mulberry production as well as silkworm rearing
will suffer from these poor management techniques and low hygiene controls
as it will lead to an increase in silkworm diseases such as grassery and
pebrine and mulberry diseases such as root-rot.
Limited scale of production and therefore limited cost competitiveness
104
Most of the rearers are geographically scattered, operate on a small scale

and have cash flow problems. Since the rearers generally lack
entrepreneurial capabilities, they are not eager to invest more in production
technologies or in expansion of their production capacity. There is no
formalized group of rearers and it seems difficult to form groups. As a result,
rearers have low negotiation power vis--vis reelers.
Informal agreements between rearers and reelers

Agreements between rearers and reelers are informal, partly due to the
absence of formalized groups. There are risks related to such informal
agreements because both parties only have verbal commitments. Rearers
may receive unfair prices; reelers may receive inconsistent supplies.
Limited knowledge
Often rearers have limited understanding of the importance of good rearing
practices such as disease control and rearing techniques for cocoon yield
and quality. There is an apparent lack of information and dissemination of
production technologies.
Opportunities in this segment are as follows:

Establish effective networks (cooperatives, clubs or associations)
and develop new business models to
overcome issues of small actors with
low negotiation power vis--vis
reelers.
Increase mulberry production, using
improved varieties and appropriate
weeding and pruning practices.
Improve soil health and nutrient
management for mulberry
plantations.
Improve farming practices to improve
yields.
Upgrade rearing facilities to industry
standards in order safeguard against
disease and quality degradation.
Develop affordable and acceptable

organic fertilizers made from local
inputs and develop extension
services for proper application and
use of these fertilizers based on soil
requirements for mulberry cultivation.
Consolidate material purchasing and
thereby reduce costs.
Apply written contracts to ensure
consistent supplies and fair prices.
Photo 38: Cocoonage in

Construction
Apply improved methods in the rearing process.

Introduce the concept of clustering and networking.
Provide training on rearing technologies/techniques and hygiene control.
Promote new silkworm varieties.
105
8.2
Pre-processors
8.2.1 Reelers
Inconsistency of supply
Silkworms and mulberry leaf quality depends largely on natural conditions
such as weather and rainfall. If there is natural disaster such as a flood,
yields will be very low affecting market supply and also impacting reelers.
Lack of planning as well as inconsistent labour supplies during periods that
coincide with the time of rice growing/harvesting can also cause inconsistent
supplies. Throughout a typical year there are limitations at all levels in the
capacity to effectively plan and manage supplies in this sector.
Inconsistency of quality
106
Yarn produced from polyvoltine, poly-bivoltine and bivoltine varieties of

silkworm cocoons have different characteristics, different uses and therefore
different constraints. The yarn produced from polyvoltine silkworm cocoons
can only be hand-reeled and is therefore restricted to traditional reeling
practices at the village level. The vast number of hand-reelers with different
levels of competency will result in hand-reeled yarns, which have variations
in thickness, uniformity and quality. This results in yarn that cannot be used
by modern weaving factories for the production of consistent quality silk
fabrics.
8.2.2
Dyers
Inconsistency of natural dyestuff

For natural dyestuffs, the continuity of supply needs to be addressed. The
production and collection of natural dyestuff is usually seasonal and the
quality of the colorant will vary through the season as well as with the age of
the material. Also natural dyes from species grown in different geographic
locations can lead to different dye results. The problem with natural dyes is
solved technically in terms of fastness and consistency, but it needs a high
level of discipline of dyers to comply with international standards. A
remaining problem is the application of mordants (to enhance colour
fastness), which are not normally accepted in textile certification schemes.
No wastewater treatment scheme

The existing dyeing process is not well structured or organized and
wastewater flows freely through the neighbourhoods of processing units,
polluting water and soil. Only a few medium-sized dyeing stations could
afford to have wastewater treatment plants or to recycle their wastewater in
the production process. Small or home-based dyers cannot afford these
investments.
8.2.3 Weavers
Absence of development & design
As mentioned previously, there is a high diversity of weaving techniques and
fabric patterns. But not all Thai styles and patterns appeal to international
customers. There is a tendency to produce too much product with too much
variation in fabric patterns that cannot be sold, leading to large product
stocks. The product mix is not properly managed; products with mis-matched
designs are difficult to sell in the export market and will lower the productivity,
particularly with input/output ratios.
Formalize agreements and planning to increase supply consistency;

establish contingency plans for weather interruptions.
Provide training on production planning methods to ensure consistent

supplies.
Adopt new technologies and continuous improvements in silk processing

and production.
Develop and transfer wastewater treatment technologies.
Develop design competence with the help of buyers.
Develop cooperative ventures with rotational production to ensure

consistent labour and product supplies.
Opportunities at this segment are as follows:
107
8.3
Imitation or duplication of designs

In general, handicraft designs are simple and easy to copy. Designs have
very weak intellectual property protection, leading to extensive copying by
competitors. The limited number of updated or new product designs
increases the level of competition between producers and reduce the
margins and the bargaining power of producers towards customers.
Inconsistency of quality & supply
This issue that affects producers the most as that they often face difficulties
to produce consistent supplies and sufficient qualities to meet demand.
Although many producers are overloaded with orders, most of them cannot
predict or control their production capacity.
108
Develop a more systematic production planning approach.
Develop design skills and knowledge about colours, style trends, etc.
Move from the Original Equipment Manufacturers (OEM*) business

model into the Original Design Manufacturers (ODM**) or Original Brand
Manufacturers (OBM***) business model.
Improve product diversification and management.
* OEM is a business model, which focuses on the manufacturing process rather than on
design or branding.
** ODM is a business model, which focuses on design rather than on branding or
manufacturing.
***OBM is a business model, which focuses on branding rather than on design or
manufacturing.
8.4
Trading Agencies/Exporters
Informal agreements between home textile producers and exporters

Agreements between producers and exporters are often not respected partly
due to the absence of penalties or regulatory controls. There are risks related
to such kinds of agreements because producers may receive unfair prices or
cannot sell their products whilst exporters may receive inconsistent supplies.
Limited knowledge
Access to market information, communication skills and bargaining power of
exporters are low because most entrepreneurs are SMEs and often lack
language skills and international trade knowledge. Consequently, they have
to rely on brokers, trading companies and other third parties. Exporters are
expected to continuingly bring products to the market faster, at the right price,
and in synchronise with market demand to be successful in the current global
marketplace.
Dependency on few markets
High Colour & Colourfastness

Colour and colourfastness is major issue to almost all the customers buying
silk products. Silk buyers often complained about colour fading after washing.
Most informants told that Thai silk products have high quality colours and
colourfastness levels. For imported silk products, the opposite picture is
generally found; a number of informants claimed that the imported silk
products had lower quality colours and less colourfastness.
Lack of direct contacts to foreign buyers/Lack of distribution channels
There are only a few established distribution channels; resulting in exporters
having little or no access to foreign buyers. In the past, there was little
interest from exporters to develop their own channels, due to poor economies
of scale and limited market knowledge.
An estimated 80% of home textile products exports from Northeastern

Thailand went in 2006 to Japan. Dependency on this market alone is risky
and could have negative consequences should this market shrink and/or
prefer sourcing from other countries. Notably Thai home textile products do
not have a large consumer base. The smaller exporters have less export
potential because they have fewer opportunities to participate in international
trade fairs and other buyer-seller meetings.
109
Absence of skilled salespeople

Absence of skilled salespeople leads to inadequate dissemination of
information regarding local producers to foreign buyers resulting in lower
sales volume.
High freight costs to EU countries
Thai exporters are looking to expand to EU markets but one of the biggest
obstacles is the high cost of transportation. Airfreight costs ranges from 2.83.5 EUR of the CIF cost per kg. Sea freight costs ranges from 0.3-1.2 EUR
of the CIF cost per kg. This will increase the price for importers and decrease
Thai price competitiveness.
Currency fluctuation
Thai exporters experienced difficulties in obtaining export orders not only due
to the market or quality of products but also because of the transaction and
fluctuating exchange rate risks. The profit margin of exporters can be
seriously affected by currency fluctuations. This is a common risk with
international business.
110
Explore additional markets and market segments.
Diversify markets.
Establish direct linkages with foreign buyers and develop stable trading
relationships with those buyers.
Develop sophisticated advance planning, forecasting, pricing, promotions

and merchandizing tools to be better able to face the risk of demand
fluctuations.
Create a streamlined mechanism for re-ordering and follow up of trade

show contacts.
Co-ordinate and collaborate with transportation and logistics enterprises.
Capitalize on the potential of growing EU markets.
Develop and transfer appropriate dyeing technologies.
8.5
Sector Wide Issues
Yarn supply shortage

There is a shortage of silk yarn particularly polyvoltine silk yarn. Weavers in
Northeastern Thailand are forced to buy unprocessed silk yarn from Vietnam
and China, which still have abundant sources. Due to the limited domestic
supplies, Thailand is highly dependent on imported raw silk yarn to meet
growing domestic and export home textile demands.
The need for daily yarn supply is paramount. This is particularly vital for the
supply of silk yarn that is sometimes inadequate due to poor quality. Because
of the lack of formal agreements and planning between rearers and
producers along with the inadequacy of mulberry leaves, there are supply
shortages. Exporters that cannot meet demands from foreign buyers suffer
from low creditability. Also exporters cannot commit to additional markets.
Lack of market-oriented product development
Very few home textile producers and exporters appreciate the importance of
product design and development. Designers work principally with colours,
shadows, illusions, shapes, proportions, feelings, moods, and trends.
Exporters need to understand how buyers in foreign markets look at a
product so they can adopt suitable product development strategies. This has
an effect on the blend of fibres, to the yarn counts, fabric design, finishing
and composition of collections.
Limited to access skilled designers/design centres

Inability to access skilled designers/design centres leads to production and
promotion of the unattractive or more conventionally designed silk home
textile products, resulting in fewer responses from EU buyers/markets.
Notably home textiles is yet another market in which design capacity and
expertise are of great importance, especially in the case of the more upmarket items such as co-ordinated product lines for the bedroom and
bathroom. Absence of market information has reduced the competitiveness
and bargaining power of producers forcing them to be price takers.
111
Lack of proper quality assurance and control system
Home textile production is very labour intensive. Almost everything is done

by hand from planting, picking, rearing, reeling, dyeing, weaving and making
home textile products. There is often no reliable and consistent labour force
other than family members for the demanding production schedule (i.e. to
meet export lead times). Sector stakeholders note that Thai producers will
not work during any local ceremony or important holiday times such as the
Songkran water festival. Exporters also note that this glitch in supply can
sometimes be a serious problem with foreign buyers. Due to the high level of
competition it is important to maintain consistency of supply. Thus, lack of
proper management and control in fact affects the entire value chain.
112
Exporting home textile products to the EU is a particularly risky business

because of the levels of compliance required for the products to enter the
market. The quality and hence competitiveness of Thai home textile products
is seriously compromised by lack of proper quality assurance and control
systems among players in the home textiles sector. There is no monitoring
system in place for all actors in the chain. Rough handling of products along
the manufacturing and delivery process can also result damage. For
example, absence of quality control system at all level of silk production
leads to production of inferior quality (in terms of denier in yarn, fabric colour
and finishing etc.) of silk products resulting in decreasing demand for Thai
silk products in the global market.
Inability to handle aggressive scale-up
Lack of an effective business model for producers and exporters coupled
with poor supply chain integration is making it difficult to meet production
lead-times and is hindering fulfilment of export orders. Traditionally,
production-planning decisions, especially scheduling, is resolved through
intuition, experience, and judgment.
Traditional producers and craft designers play a very important part within
the sector and need to be nurtured and supported. Most of the people in the
area are artists without business acumen. By choice, and sometimes force of
circumstance, they will only ever be in the business of producing lowvolume high-value items, which does not allow for job creation.
No formalised coordination among stakeholders

Lack of coordination among the mulberry growers, rearers, reelers, dyers,
weavers, traders, home textile producers and exporters leads to unplanned
production and supply of inappropriate product (in terms of colourfastness,
colour contrast, pattern, design, etc.) and inadequate quantities of supply,
resulting in increasingly growing mismatch between the demand and supply.
Lack of market intelligence
Domestic production should better aligned to meet the required market

standards. These standards are not, however, widely known by all the
players in the value chain, and this has prevented producers and market
suppliers from taking all necessary precautions to ensure that their products
are up to the EU standard required.
Absence of additional skilled labour

As in other local production sectors, there is a lack of additional skilled
labour, both, seasonal (e.g. during rice harvest) and in general (younger
labourers prefer working in urban environments in industrial sectors)
subsequently local knowledge and skills tends to disappear.
Access to market information in Thailand is generally poor and the home

textiles sector is not an exception. Most companies in the industry do not
possess the resources to conduct market research for studying the nature
and culture of EU markets, undertake competitive analyses and review
regulatory requirements, as well as identify opportunities. Thai exporters
have so far focused mainly on trade missions and trade fairs but this should
be expanded to include market intelligence for individual countries. While
resistance to change is a problem in the whole home textiles sector, the
home textile producers are particularly reluctant to break from their traditions.
This is due partly to their unfamiliarity to communicate with end-customers
and an unrealistic perception of clients demand for authentic and
environmentally friendly products. The opportunities for the home textiles
sector in the export market are not fully exploited and should be further
expanded and capitalized. However the capacity and knowledge required for
entering the EU markets is limited.
113
Chemical residue
Traditionally, home textile products used toxic chemicals in the

manufacturing and dyeing processes. Notably, home textile products with
AZO dye and/or other banned chemical can be harmful. Although, EU
markets have banned many highly toxic, high residue dyes, they are still
being used in Thailand.
114
Photo 39: Dyed Eri Silk Cocoons using Natural Dye Stuff
(Workshop on Eri Silk)
Smuggling yarn
Smuggling silk yarn not only causes sizable losses in selling prices, but also
adversely affects the volume of local yarn trade. Several survey informants
advised that significant volume of silk yarns are smuggled into Thailand and
is sold at relatively low price at the moment. The smuggling of Vietnamese
and Chinese silk yarn has resulted in a reduction in local yarn production.
The existing border controls are weak and it is believed by informants that
informal imports are sizable even though clear estimates are lacking.
Weavers use the imported yarn because it is cheaper and it is relatively
difficult to distinguish from Thai yarn. The price of informal imports in 2007
was around 6 EUR per kg. lower than the domestic price. The cost of silk
yarn for weft (150-200 denier) at the village level is around 18-19 EUR per
kg. and in order to make a profit, producers have to sell at 21-22 EUR per
kg. while the imported yarn is only 14-16 EUR per kg. As a result, the
domestic silk yarn buyers can reduce the buying price of the local yarn to buy
at the same price as that of smuggled yarn.
Stringent environmental requirement

The home textiles sector used to be regarded as a polluting sector mainly
because of the use of dyes that were discarded with wastewater. In the
future, more stringent requirements in terms of emissions to air, soil and
water will be imposed. Finished products have to comply with high
environmental and health standards that are mandated both by EU
legislation and consumer demand.
Freelance and contract

work predominates
Given the inherent nature of
the sector, much of the work
Photo 40: Dyeing Eri Silk using Natural
is freelance, contract or
Dye Stuff (Workshop on Eri Silk)
piece
based;
most
enterprises contract is up to
100% of capacity when needed; while this is both a strength (allows for
flexibility and opportunism) and a weakness (hampers stability and
development), it is not necessarily something to change but to work with.
The relationship between

environmental standards
and competitiveness is
complicated. Some analysts
consider compliance with
environmental requirements
as an additional burden,
which increase production
costs and harms the
competitiveness of firms and
sectors, particularly those
engaged in international
trade. Others consider
environmental standards a
mechanism for improving
production efficiency and
reducing adverse impacts on
the environment where the
costs of environmental
degradation are paid by
society as a whole.
115
116
Apply written agreements to facilitate consistent supplies
Provide training on production planning to ensure sufficient supplies
Explore labour-saving or labour-efficiency enhancing techniques
Develop niche markets
Examine what factors are critical to EU markets and address them in

order to increase market share (i.e. product development); capture the
high-end EU market portion
Integration of international designers and design trends
Link existing design resources including people and events
Meet customer demand for handcrafted, unique and Asian-inspired

products
Faster flow of market information and ability to respond quickly to market

conditions
Availability of market assessment tools for identifying newer and niche

markets
Make available market information and advisory services in marketing

techniques
PR in EU to create awareness on Thai home textiles
Ensure effective prevention of silk yarn transport to tackle the smuggling

of yarn. This will require concerted action at international level.
Formalize linkages to increase negotiation and coordination among

stakeholders
Provide a central point for market information (requirements, trends, etc.)
9.
Sub-sector Constraints/Opportunities Analysis
The study team used the following matrix to categorize the constraints on the
basis of the variable factors.
Variable 1:
Constraints are selected by the survey team that significantly affect

the home textiles sub-sector in the Northeast and likely show an
impact within 6 months after the constraint has been worked out.
Variable 2:
The weighted averages of the impact/consequences on the

following factors that are considered to be most important
indicators to targeted entry to EU based niche markets.
Increased number and volume of transactions with EU trade

intermediaries
Increased number of Thai SMEs, which can cope with

minimum EU quantity/quality requirements
Higher percentage of product is of export quality
Increased number and volume of transactions with EU trade intermediaries

was given the highest priority (50%) as best matching with the studys
objective. Equal weight (25%) was given to increased number of Thai SMEs,
which can cope with minimum EU quantity/quality requirements, and higher
percentage of products of export quality.
Figure 27: Matrix to Categorize the Constraints
117
The identified constraints were assessed on the basis of all the factors
mentioned above. In the table below, each of the constraints was rated
according to the degree of their impact on the given factors. The rating was
done on the basis of the outcome with key informants, available secondary
information and the impression and experience gathered during the field
survey by the study team. The last column of the table, illustrates the
probability for the programme to address constraints directly or through
service providers.
118
Table 16: Constraints Prioritising Matrix
Constraints
25
%
6
25
%
7
Total
Program
Intervention
Possibilities
6.25
Partly
Variability in quality of poly-bivoltine silkworm eggs
50
%
6
Mulberry shortage
6.00
Partly
Mulberry disease
6.00
Partly
Poor management technique & low hygiene control
6.50
Yes
Freelance & contract work predominates
6.00
Partly
Inconsistency of quality & supply
4.50
Partly
No wastewater treatment scheme
6.25
Yes
Imitation or duplication of designs
5.25
Partly
Dependency on few markets
5.25
Partly
10
High color and colorfastness
7.00
Partly
11
Absence of skilled sales persons
6.50
Partly
12
High freight costs to EU countries
6.00
Partly
13
Yarn supply shortage
7.00
Partly
14
Lack of market oriented product development
10
9.50
Yes
15
Limited access to skilled designers/design centers
9.00
Yes
16
Lack of proper quality assurance & control system
9.00
Yes
17
Inability to handle aggressive scale-up
6.00
Partly
18
No formalized coordination among stakeholders
8.75
Yes
19
Lack of market intelligence
9.00
Yes
20
Absence of additional skilled labour
6.00
Partly
21
Chemical residue
6.50
Partly
22
Smuggling yarn
6.00
Partly
23
Stringent environmental requirement
7.00
Partly
Based on the output of the exercises, the following selection matrix was
developed by the study team. The constraints were plotted on the basis of
their rating against the variable set. To simplify the process of plotting the
constraints in the matrix, the serial number of each of the constraints has
been used. The matrix has nine quadrants to classify the constraints.
The following constraints match with the programmes objective and may
also create a moderate impact on the targeted entry to EU based niche
markets.
Lack of coordination among the stakeholders leads to a decrease in

productivity and supply of inappropriate product (in terms of
colourfastness, colour contrast, pattern, design, etc.) resulting in an
increasingly growing mismatch between demand and supply.
Insufficient knowledge on market development and proper know-how

required for expanding the EU market leads to an inability to access new
markets for business expansion and growth resulting in a huge loss in
income potential. The possibilities for Northeastern home textiles are
then limited and should be expanded.
Absence of market-oriented product development and limited to access

skilled designers/design centres (This has resulted in absence of
contemporary designing capability) of pre-processors and home textile
producers has lead to production of stereotyped products. This in turn
results in a gradual decline in the demand of products both in domestic
and global market.
Lack of proper quality assurance and control system leads to an inability

to produce the required silk products also resulting in decline in demand
for Thai silk home textiles.
Figure 28: Constraints Selection Matrix
119
10.
Intervention Design
10.1
Introduction & Background
The crucial themes to focus in the Northeastern home textiles are as follows:
Strengthening linkages between stakeholders
Continuous market development
Product upgrading and differentiation
Quality control throughout the value chain
Intervention Design
Strengthening Linkages between Stakeholders
120
The existing linkages between stakeholders along the value chain need to be
strengthened and new linkages developed. If there is no coordination along
the chain it is difficult for fine silk products to be produced, transformed or
processed, marketed and then ultimately sold. Feedback between
consumers and producers (and all stakeholders along the chain) is vital for
both sales of existing product (matching supplies with demands both spatially
as well as temporally) as well as the development of new products to cater
for changes in demands. It is clear that any intervention in the marketing
system is ultimately unsustainable unless there is a strengthening of the
linkages between stakeholders. A lack of linkages between non-adjacent
levels of the chain perpetuates a situation where there are multiple
middlemen handling the silk product from farm gate to consumers, with the
attendant increase in losses and financial inefficiencies from multiple
handling, packaging, storage and transportation. Also, a lack of trust between
stakeholders has a dampening effect on transactions, particularly in an
environment where there are no enforceable contracts.
Developing Markets
The reliance on a few main markets leaves the home textile sector
vulnerable and is limiting expansion of the sector. Producers and exporters
would like to access more markets but lack the skills/knowledge in this area.
The limited existing services for EU markets need to be expanded whilst
exploring the development of innovative new models. In addition, there is a
potential opportunity to capture more profits with niche target groups such as
non-mulberry silk home textiles and natural dyed home textiles. Marketing
and promotion of Thai products and correct branding will improve the sector
standing and increase its market share in the EU market.
Product Upgrading & Differentiating

Poorly differentiated product, especially compared to the handloom products
from other countries, that result in high selling prices due to high production
costs are likely to be replaced by competing supplies in the market. Good
design and product innovation can help differentiate products, establish
consumer loyalty and trust and, in many cases, allow products to command a
premium price. Design is the biggest element of value addition, but cannot
originate in a vacuum. Exporting products with poor or inadequate designs
can seriously jeopardize an otherwise successful marketing campaign. Lack
of sufficient understanding of physiognomy, body sizes, life styles, activities
and climatic conditions result in incomplete design appreciation. Upgrading,
designing and branding to differentiate Thai products can help protect
against this situation. Services need to be expanded and innovative products
explored according to identified trends and target markets.
Improving Quality Control throughout the value chain
As detailed in the previous section, the quality and hence competitiveness of
Northeastern home textiles is seriously compromised by lack of proper
quality assurance and control system among players in the home textiles
sector. There is no monitoring system in place for all actors in the chain,
noting that their knowledge of quality assurance is low. There are no sector
standards for quality control and no training on proper procedures. This
situation results in supply and quality inconsistency. Some exporters are not
satisfied with this situation and, understandably, want to see improvement.
Provision of & Satisfaction with Existing Services
The provision of and satisfaction with existing services were explored with
stakeholders in interviews, discussions and at the validation workshop on
24th April 2007. The tables on the next pages contains a summary of the
findings.
Intervention Design
10.2
121
Table 17: Existing Services - Access, Awareness and Satisfaction of

Stakeholders
(Sources: Stakeholder interviews and Analysis by the Survey Team, 2007 and Validation workshop,
2007)
Service
Provider(s)
Awareness /
Access
Satisfaction
Cost
Coverage
Initial Ideas for

Improvement
Intervention Design
Pre-processors (Rearers, Reeler & Dyers)
122
Inputs &
Farming
System
Advice
DOAE,
DOA,
QSIS, a
few
companies
50%
50% (farmers
request more
know-how,
labour-saving
techniques)
Commercial,
some
subsidized
extension
training /
service
A documented
traceability system to
track the registered
product must be in
place. Record
keeping is vital. It is
important to note that
chemical used must
comply with EU MRL
regulation
Supply of
Silkworm
eggs
Internal,
QSIS, a
few
companies
100%
60% (more
reliable, could
improve
quality and
higher yield)
Commercial,
some
subsidized
extension
training /
service
Document to show
origin and/or
guarantee is
important.
Irrigation
Internal,
numerous
private
providers
100%
80% (could
improve
efficiency and
effectiveness)
Commercial
Suitable irrigation
systems could
improve efficiency
and effectiveness.
Testing,
Inspection,
Certification
Internal,
foreign
consulting
agencies
i.e. SGS,
Textile
Testing
Centre,
DSS
20%
50% (not
thorough
coverage)
Commercial
Certification is the
key tool to provide
credibility,
transparency, and
integrity of quality
assurance systems
for high-end/niche
markets. Consumer
health and safety are
very important
throughout the textile
chain, from farming to
processing to the end
market. For this
reason, the need for
good quality
management takes
on increasing
importance.

Stakeholders (Continuation)
2007)
Service
Provider(s)
Awareness /
Access
Satisfaction
Cost
Coverage
Initial Ideas for

Improvement
70% (need
more
consistent
and reliable
labour force)
Commercial
Appropriate labour
practice is a very
important determinant
of consistency and
high quality supply,
which is essential for
maintaining customers.
40% (cost
could be
lower and
more
thorough
coverage)
Commercial
Certification is the key

tool to provide
credibility,
transparency, and
assurance systems for
high-end/niche
markets.
Handloom Weavers
Provision
of labour
Internal
Testing,
Inspection,
Certification
Internal,
foreign
consulting
agencies
i.e. SGS,
Textile
Testing
Centre,
DSS
100%
20%
Intervention Design
Consumer health and

safety are very
important throughout
the textile chain, from
farming to processing
to the end market.
Hence good quality
management takes on
increasing importance.
123

2007)
Service
Provider(s)
Awareness /
Access
Satisfaction
Cost
Coverage
Initial Ideas for

Improvement
Intervention Design
124
Packaging
Internal,
several
companies
100%
70% (made to
order; could
improve
efficiency &
effectiveness)
Commercial
Care must be given to

the packaging of
products if one intends
to export to EU
countries. Products
must be protected
against the elements,
changes of
temperature and rough
handling.
Testing,
Inspection,
Certification
Internal,
foreign
consulting
agencies
i.e. SGS,
Textile
Testing
Centre,
DSS
20%
40% (cost
could be lower
and more
thorough
coverage)
Commercial
Certification is the key

tool to provide
credibility,
transparency, and
assurance systems for
high-end/niche
markets. Consumer
health and safety are
very important
throughout the textile
chain, from farming to
processing to the end
market. For this
reason, the need for
good quality
management takes on
increasing importance.

2007)
Service
Provider(s)
Awareness /
Access
Satisfaction
Cost
Coverage
Initial Ideas for

Improvement
Air Freight
Several
companies
100%
70% (cost
could be
lower)
Commercial
Exporters should
position themselves as
reliable suppliers who
can commit to delivery
times. The logistic
concepts aim at having
the right goods at the
right time, in the right
volumes at the right
place and all that at a
minimum of costs. Due
to its great importance,
delays are not
tolerated.
Sea
Freight
Several
companies
100%
80% (cost
could be
lower)
Commercial
See above
Marketing
to
Importers
Internal,
DEP
100%
40%
(supporting
function;
basically rely
on their own
competitiveness)
Commercial,
some
subsidized
Europe is a continent
and not one market,
but a patchwork of
markets with different
characteristics. For
that reason a selection
of target countries has
to be made for
marketing purposes.
The general approach
is to choose a limited
number of countries:
and classify them as
primary and secondary
targets.
Packaging
Internal,
several
companies
100%
80% (could
improve
efficiency &
effectiveness)
Commercial
Besides the basics of

transport and handling
durability, exporters
are advised to follow
specific requirements
and guidelines
concerning packaging,
like information
concerning the order
and numbers printed
on the boxes.
Exporters
Intervention Design
125
Pre-processor (Rearers, Reelers & Dyers)

The primary and major dissatisfaction of pre-processors is low selling prices.
Pre-processors note that the selling prices have remained the same for years
while at the same time production costs (mainly labour and mulberry cost)
have increased. As a result, pre-processors have extremely low profit
margins and may in fact suffer losses. The labour-intensive nature of silk
production leaves labour as a key price driver. In a price competitive
environment, labour saving techniques can be critical. Satisfaction is rated at
50%.
Rearers would like higher quality silkworm eggs as well as reliable,
alternative silkworm egg sources. The satisfaction rate is ranked at 60% due
to limited availability. The development of varieties that are well adapted to
Thai conditions and superior in output is also desired.
The satisfaction rate for irrigation is ranked at 80%. The high costs and
inefficiency of irrigation systems could be improved with better technology
and improved knowledge of proper irrigation installation and systems
management.
For the time being, testing for chemical residues is not required in order to
ensure purchase by exporters. Satisfaction is rated at 50 percent to reflect
the need for more thorough coverage in testing services.
Intervention Design
Handloom Weavers
126
Handloom weavers note that there is still a limited supply of skilled labour to
respond to increasing labour demands for production. There is no reliable
and consistent labour force other than family members. The satisfaction rate
for provision of labour is ranked at 70%.
Testing for chemical residues is sometimes required in order to ensure
exporters will purchase finished products. Satisfaction is ranked at 40% to
reflect the need for more thorough coverage in testing services and the
desire for lower costs of testing services.
The satisfaction rate for packaging is ranked at 70%. The high costs and
made-to-order nature of current packaging could be improved with more
suppliers and greater innovation and/or buying schemes.
In general, packaging could be more efficient and effective, particularly in

regard to improved protection during handling and in selecting optimal sizes
to ensure efficient loading into transportation containers. The use of more
attractive packaging could help capture more of the value from importers and
retailers. Testing for chemical residues is sometimes required in order to
ensure exporters will purchase finished products that are safer for end users
or meet MRL requirements. Satisfaction is ranked at 40% to reflect the need
for more thorough coverage in testing services and the desire for lower costs
of testing services.
Exporters
A complaint from exporters is the high cost of transportation, particularly
airfreight cost. Airfreight alone can cost from 5-10% of the CIF cost;
exporters would like to see this percentage decreased. Current satisfaction of
airfreight and sea freight is 70% and 80% respectively.
Marketing to importers relies heavily on competitiveness alone but specific
marketing campaigns or promotions to link with sellers are scarce. The
Department of Export Promotion does play a supporting role. Satisfaction is
rated at 40% because exporters would like to expand markets and could use
assistance in marketing skills.
Packaging
The satisfaction rate for packaging is ranked at 80%. In general, packaging
could be more efficient and effective. Again, more attractive and effective
packaging could capture a larger percentage of the value added.
The study indicates the limited scope for intervention in the sector particularly
in terms of immediate intervention to enhance export opportunities to EU
markets. However, the opportunity of intervention to enhance domestic
operations with an intention to increase future potential clearly exists.
Intervention is needed to strengthen the entire value chain and the following
areas have been identified as critical success factors for the development of
a sustainable home textiles sector in the Northeastern region and its
transformation from a supply driven focus into a demand led sector.
Intervention Design
10.3 Initial Scope & Ideas for Intervention
127
Design
EU Market
Production
EU Market
Demand
Input
Services and Distribution

Enabling Environment
Figure 29: Critical Success Factors for developing a sustainable home

textiles sector
EU Market Demand
Design
Intervention Design
Implementation of product design and quality development strategies such

as:
128
Local design and innovation skills development
Access to trend information and market intelligence on design and

product development
Protection and documentation of heritage and cultural resources from

which valuable design inspiration can be gleaned
Input
Enable widespread and efficient access to cost effective raw materials
Co-ordinated research and development leading to availability of new
materials, new technologies and new applications
Production
Co-ordination and collaboration of:
Capacity building and skills development programmes across the value

chain
Access to high standard production facilities
Enterprise development support programmes to encourage:

- Business development
- Business sustainability
- Self-sufficiency
Development of tools and technologies to enhance production capacity

and improve efficiency in particular
- Access to appropriate technology
- Training in production-line and efficient production process
Production finance support
EU Market
Co-ordination and collaboration between:

Market research processes in order to:
- Inform market needs
- Identify market opportunities
- Position Thai products appropriately
Strategy in the sector, in order to:

- Exploit EU market opportunities
Marketing & promotional effort to:
Mobilize the emergence of a single recognisable Made in Northeastern

Thailand brand, which strongly supports individual enterprise identity.
Intervention Design
129
Services & Distribution
Intervention Design
Co-ordination and collaboration between:
130
Support services to enable the right product to the right market at the
right time
Accreditation systems to ensure quality products and recognized

branding
Organic and fair trade practices (production, retailing and distribution)

to build awareness and understanding, to establish a quality
infrastructure and to ensure sector agreement, exploitative practises
should be eliminated through the introduction of alternate methods and
less exploitative business practices.
Market intelligence collection which is efficient and has timely feedback

mechanisms
Photo 41: Raw Silk & Natural Dye Stuff
Enabling Environment
Co-ordination and alignment of:
Research and information gathering to inform strategic decision making
Operational and support services to improve efficiencies
Market information & access to create and service demand for

Northeastern home textiles
Table 18: Intervention Ideas
Ideas for interventions came primarily from the constraints in the sub-sector
as depicted in the map as follows on the next page:
Intervention Design
In consequence, 4 draft ideas were identified that can be implemented with

inthe scope and guidelines of the EU-Thailand Home-Textiles project and
which aim to make a clear impact in EU export opportunities. However, this
is a range of draft ideas based on the actual analysis of opportunities and
constraints. In order to remain flexible and not be constrained by continuous
changes within the sub-sector, ideas are still generic. In selecting feasible
interventions and shaping these ideas for implementation, it is recommended
that the EU-Thailand Home Textiles project surveys further details on
specific markets, services, etc. and organises core group, meetings with
representatives of value chain actors to develop the intervention designs and
discuss in detail the contributions and activities of potential partners.
131
Intervention Design
132
Figure 30: Constraints in the Sub-sector
IV 1
Intervention 1
Facilitate market entry to EU niche markets
IV 2
Intervention 2
Improve quality supplies for home textile

processing SMEs
IV 3
Intervention 3
Develop and implement improved reeling

technology
IV 4
Intervention 4
Develop traceability schemes and certifications
Detailed descriptions of each intervention will be given on the following

pages.
Photo 42: Workshop on

Processing of Eri Silk
Intervention Design
Photo 43: Workshop on

Processing of Eri Silk,
here De-gumming
133
IV 1: Facilitate market entry to EU niche markets

Expected impact
Home textile producers

- Improved market information
- Access to proper markets
Pre-processors & Home textile producing SMEs
- Increased production volumes
- Increased revenue and value added
Service solution
Facilitate exporters and producing SMEs to exhibit at

specialized trade fairs and follow-up with post fair
feedback
Coordinator
EU-HT
Partners
FGM
Home textile poducing SMEs
Home textile exporters
Funding of
intervention
EU-HT, FGM, contributions by producing SMEs and

exporters
Clients
Home textile producing SMEs, exporters
Role of EU-HT
Initiates pilot activity

Builds capacity of producing SMEs and exporters to
be able to gain benefits from niche markets in post
project period
Intervention Design
FGM
134
Measures
Duration of
engagement
8 months
Exit strategy
Producing SMEs and exporters intensify and scaleup engagement in niche markets and related
exhibitions
DEP integrate information on niche market into their
exhibition promotion policy
Raise awareness of producing SMEs and exporters

Prepare for trade fair
Facilitate participation in and exhibition at trade fair
Facilitate negotiations at sales point
Facilitate post fair feedback
Carry out baseline and interim impact measurements
and conclude findings
IV 2: Improve quality supplies for home textile producing SMEs

Home textile producing SMEs
- Reduction of cost and fluctuations in price
- Improved consistency of supplies (volume, quality)
- Reduction of material shortages and off grade
supplies
- Improved productivity of producing SMEs
Pre-processors & input suppliers
- Increased production volumes (dyestuff, yarn,
intermediate products)
- Increased revenue and value added (dyestuff, yarn,
Service solution
Information service on quality sourcing of dyestuff,

natural fibres and intermediate products
Coordinator
EU-HT
Partners
FGM
TTC/THTI
Funding of
intervention
FGM, EU-HT, contributions by suppliers and producing

SMEs
Clients
Pre-processors, input suppliers, home textile producing

SMEs
Role of EU-HT
FGM

Implements and operates pilot/service in post project
period
Measures
Select interested producing SMEs and define specific

need (max. 3 set-ups)
Select interested pre-processors/suppliers and define
deliverables (max. 3 groups)
Match-making and agreements between preprocessors/suppliers and producing SMEs
Check feasibility of the service & develop business
model
Control and monitoring of deliverables
Assess clients awareness, change of practice and
impact
Duration of
engagement
6 months
Exit strategy
Piloting service with FGM provides service in postproject period

Alternative providers are assessed for scaling-up
Intervention Design
Expected impact
135
Intervention Design
IV 3: Develop and implement improved reeling technology
136
Expected impact

- Reduction of cost and fluctuations in price
- Improved quality and consistency of silk yarn
(volume, quality)
Pre-processors
- Improved reeling efficiency and reliability
- Increased production capacity
- Increased productivity and business performance
Service solution
Reeling technology development together with

stakeholders through contract research
Coordinator
EU-HT
Partners
Funding of
intervention
FGM, EU-HT, contributions by pre-processors and

producing SMEs
Clients
Pre-processors, home textile producing SMEs
Role of EU-HT
FGM

Stimulates and manages the reeling technology
development scheme
Measures
Transfer lesson learned from the project to new R&D

projects
Develop, test, and disseminate appropriate
technology to pre-processors
Check feasibility
Stimulate demand and link-up with technology
providers
Assures that solution is of shared benefit among
partners / chain actors
Duration of
engagement
12 months
Exit strategy
FGM provide information for reeling technology

development
Partners contribute in cash or kind to the
development
Tools, equipment and training are delivered by
selected service providers
FGM
Research units
Pre-processors
IV 4: Develop traceability schemes and product certifications

Expected impact
Service solution

- Improved communication with customers through
traceability schemes and certification of products
- Improved consistency of supplies (volume, quality)
- Reduction of material shortage & off grade supplies
- Improved productivity of producing SMEs
- Increased revenue & value added (finished products)
Pre-processors & input suppliers
- Increased production volumes and quality (dyestuff,
yarn, intermediate products)
- Increased revenue & value added (dyestuff, yarn,
Manage quality supplies and customer satisfaction
through traceability schemes and product certification
Coordinator
EU-HT
Partners
FGM
IVN
THTI
Funding of
intervention
Clients
FGM, EU-HT, contribution by producing/exporting SMEs
Role of EU-HT
FGM

Cooperates with accreditation and certification bodies
Assures capacity development of pre-processors and
producing SMEs
Links the testing services
Measures
Survey and select appropriate certification and

traceability schemes
Stimulate demand driven traceability schemes and
product certifications
Develop capacity of related pre-processors and
manufacturing SMEs
Duration of
engagement
Exit strategy
18 months
Intervention Design
FGM has screened buyers with appropriate orders in

place and develops b2b relationships
THTI, Abs, CBs and decentralized bodies back-up
application of traceability schemes and product
certification
Increased number of SMEs invest in certification and
traceability
137
11. Annexes
Annexes
11.1 List of Interviews
138
Respondents
Organisations/Companies
K. Phongsuda Nilbanjong
K. Umaporn Chansirichoke
Industry Promotion Centre 1
K. Nuntana Tangwinit
Kenan Institute Asia
K. Suwadee Salmon
K. Stephen Salmon
K. Siladda Tabpinthong
The ThaiCraft Association

ThaiCraft Fair Trade Co., Ltd.
K. Kwanruthai Puengthamsakda
Asia Dyestuff Industries Ltd.
K. Nuengruthai Saesangseerueng
K. Ladawan Silppothakul
Department of Science Service
7
8
9
K. Kamolluck Panthasane
K. Akkarin
K. Pilan Dhammongkol
Thanapaisal R.O.P.
Double Star Industry Co., Ltd.
Thanapaisal R.O.P.
10
K. Chanpen Taagamnerd
Sankangpla group
11
K. Jiraporn Tulyanond
Export Promotion Centre
12
K. Apisith Promyannont
Promcharoen Intertrade Co., Ltd.
13
K. Sakchira Wiengkao
Baisri Creation Co., Ltd.
14
K. Sumate Phunkaew
Classic Model Co., Ltd.
15
K. Nataya Boonvanno
Doi Tung Development Project
16
K. Virat Thandaechanurat
K. Peeraporn Palapleevalya
K. Kanyanuch Sinsuwannakul
Thailand Textile Institute

17
K. Surachai Jinarakpong
Magic & Mars Logistics Co., Ltd.
18
Dr. Siribenja Khowadhana
Silk Avenue Co., Ltd.
19
K. Peerapan Weerapong
Queen Sirikit Institute of Sericulture
20
K. Tidarat Tiyajamorn
SilkNet
21
K. Sangduen Aomthaisong
Pha Toomthong, Ban Na Pho
22
K. Prakong Pasatiti
Na-Pho Folk Hand-Craft Centre
23
24
K. Jaranya Wongprom
K. Sangwarn Teemui
Praepan Group
Ban Reng Khai Foundation
25
K. Amnuay Khusiricharoenphanit
Amnuay Silk, UBIC New Entrepreneur
26
K. Pongpeera
Queen Sirikit Sericulture Centre, Surin
27
K. Pareuhat Tamcharoen
K. Surachot Tamcharoen
Ban Na-Tang, Natural Dyed Colour

Centre & Weavers
28
29
K. Lakkana
K. Ratta
Bayer Thai Co., Ltd.

Dystar Thai Co., Ltd.
30
K. Poonsub Tulapun
HomeNet
11.2 Key Benchmarks of Thai Home Textiles Vis--vis Competitors

Benchmarks: General Sub-sector Features of Thai and Chinese Silk Home
Textiles
Benchmarks
1
(Poor)
1.
Production
1.1
Rawsilk production (% or world production)
1.2
Mulberry yield (tons per ha per year)(vary widely by

variety)
Mulberry planted area (ha)
1.3
1.4
Renditta (Productivity of reeling cocoons to rawsilk

yarns) (kg of reeling cocoons/ kg of rawsilk)
1.5
Length of cocoon filament (meter per cocoon
1.6
2.
Hourly compensation rate (inlc. wages & fringe

benefits) for skilled labour
Supplies / Logistics
2.1
Distance to EU Retailers shelf
Scores
2
(Fair)
3
(Good)
a) Air (hours)
b) Ship (days)
2.2
Transportation costs per kg to EU countries (EUR)

a) Airfreight
b) Seafreight
Market Features
3.1
EU Market Share (%)
3.2
Competitive regional category by CBI
Thailand
China
Source: Own analysis based on interviews carried out with sub-sector stakeholders and resource
persons in March- May 2007
Annexes
3.
139
Benchmarks: General Sub-sector Features of Thai and Indian Silk Home

Textiles
Benchmarks
1
(Poor)
1.
Production
1.1
1.2

variety)
1.3
1.4

1.5
1.6
2.

2.1
Scores
2
(Fair)
3
(Good)
a) Air (hours)
b) Ship (days)
2.2

a) Airfreight
Annexes
b) Seafreight
140
3.
Market Features
3.1
EU Market Share (%)
3.2
Thailand
India
Benchmarks: General Sub-sector Features of Thai and Vietnamese Silk

Home Textiles
Benchmarks
1
(Poor)
1.
Production
1.1
1.2

variety)
1.3
1.4

1.5
1.6
2.

2.1
Scores
2
(Fair)
3
(Good)
a) Air (hours)
b) Ship (days)
2.2

a) Airfreight
b) Seafreight
Market Features
3.1
EU Market Share (%)
3.2
Thailand
Vietnam
Annexes
3.
141
Key for Scores
Benchmarks
1 (Poor)
2 (Fair)
3 (Good)
Less than 10
10-20
More than 20
Less than 15
15-30
More than 30
Less than
100,000
100,000500,000
More than
500,000
More than 9
7-9
Less than 7
Less than
500
500-800
More than
800
More than 2
1-2
Less than 1
More than 60
hours
40-60 hours
Less than 40
hours
More than 25
days
15-25 days
Less than 15
days
a) Air freight
More than 3
2-3
Less than 2
b) Sea freight
More than
0.3
0.2-0.3
Less than
0.2
Less than 10
10-15
More than 15
Low cost
Medium cost
High cost
1. Production
1.1 Raw silk production (% of world
production)
1.2 Mulberry yield (tones per ha per
year) (vary widely by variety)
1.3 Mulberry planted area (ha)
1.4 Renditta (productivity of reeling

cocoons to raw silk yarns) (kg. of
reeling cocoons/ kg. of raw silk)
1.5 Length of cocoon filament
(length in meter per cocoon)
1.6 Hourly compensation rate
(includes wages and fringe benefits)
for skilled labour
2. Supplies/Logistics
2.1 Distance to EU Retailers shelf
a) Air (hours)
b) Ship (days)
2.2 Transportation costs per kg. to
EU countries (EUR)
Annexes
3. Market Features
142
3.1 EU market share (%)

3.2 Competitive regional categories
by CBI
Benchmarks
China
India
Vietnam
Thailand
1. Production
1.1 Raw silk production (% of world
production)
71.13
11.33
9.15
1.14
1.2 Mulberry yield (tones per ha per

year) (vary widely by variety)
15-22
35-65
34-63
37.5-67.5
1.3 Mulberry planted area (ha)
626,000
280,000
250,000
35,000
1.4 Renditta (productivity of reeling

cocoons to raw silk yarns) (kg. of
reeling cocoons/ kg. of raw silk)
5.55-6/1
8.77/1
7.5/1
10/1
1.5 Length of cocoon filament

(length in meter per cocoon)
7001,300
(Hybrid)
8001,000
(Multivoltine)
7001,000
400
(Hybrid)
a) Air (hours)
b) Ship (days)
a) Air freight
b) Sea freight
3.1 EU market share (%)
3.2 Competitive regional categories

by CBI
1.6 Hourly compensation rate

(includes wages and fringe benefits)
for skilled labour
(Native)
2. Supplies/Logistics
2.1 Distance to EU Retailers shelf
2.2 Transportation costs per kg. to

EU countries (EUR)
Annexes
3. Market Features
143
11.3
Thai Silk Exports in 2006 Classified by HS. Code
HS. Code
Annexes
Main Export Markets
5001: Silkworm cocoons suitable for

reeling
0.03
UK (100%)
5002: Raw silk
0.60
Japan (90.93%), China (9.07%)
5003: Silk waste, incl. silk yarn

waste, etc.
0.39
Japan (67.53%), Italy (26.54%),

China (5.84%)
5004: Silk yarn, not spun from

waste
0.03
Spain (54.45%), India (29.14%),

Japan (6.94%)
5005: Yarn spun from silk waste,

not put up from retail sale
9.14
Korea (65.65%), Japan (20.81%),

Switzerland (9.77%)
5006: Silk yarn / yarn spun from silk

waste, put up for retail sale
0.22
Lao (53.04%), Papua New Guinea

(24.92%), Singapore (6.36%)
5007: Woven fabrics of silk or of silk

waste
12.53
Source: Costums 2007
144
Export
Value
(EUR
million)
USA (40.40%), UK (20.12%),

Spain (5.08%)
11.4
Term Description
Descriptions of key terms as used in the context of this report are given
below.
Niche Markets
Niche markets are specialized export markets for a particular product or
service. Niche markets, where primary demand is for differentiation or
uniqueness, are understood as an opportunity for home textile exporters to
exploit a particular economy.
Niche products can be defined as items whose primary value lies in
differentiation and their particular suitability for a relatively small number of
purchasers. Typically niche products are perceived by purchasers as high
value and differentiated, and are priced accordingly.
Niche markets are often contrasted with mass markets. Niche products have
a special differentiated appeal to a limited numbers of purchasers. Mass
products have a broad appeal to the undifferentiated mass of consumers.
Mass products for mass markets usually rely on economies of scale and cost
efficiencies, and compete largely on the basis of price. Consumers of interest
in niche markets are those who want specialized, differentiated products.
Price is not the most important consideration to these consumers. These
niche markets provide potentially profitable opportunities for small producers.
Annexes
The key to success in this context is to understand what the market wants, or
may want, and ensuring to produce what the market wants. Critical to this is
the use of information. Producers need to understand what they can produce
as well as that the customer wants. Producers need to identify and
understand all of the steps between production and purchase of a product, to
ensure that products can meet customers needs at a competitive price.
Although niche markets are price inelastic, it is still an important
consideration in any exporting decision.
145
Figure 11.4: Comparison of Mass and Niche Markets
Organic
The USDA defines organic as An ecological production management
system that promotes and enhances biodiversity, biological cycles and soil
biological activity. It is based on minimal use of inputs and on management
practices that restore, maintain and enhance ecological harmony. When
choosing organic products, it is important to know if the product was made
from Certified Organic base materials and any potentially harmful finishing
processes used to produce the final end product.
Annexes
These standards cover the production, processing, producing, packaging,

labelling, exportation, importation, and distribution. The key criteria are:
146
Land is free of chemicals for a specific number of years
All inputs have to meet basic requirement on toxicity and biodegradable
All production and handling steps must be well documented to allow an

effective inspection of the activities
Environmental policy required in producing sites
Maintain physical separation of organic and non-organic certified

products
Dual system of quality assurance consisting of on-side inspection and

residue testing
Fair Trade
Fair trade is a trading partnership based on dialogue, transparency and
respect that seeks greater equity in international trade. It contributes to
sustainable development by offering better trading conditions to, and
securing the rights of, marginalized producers and workers. The fair trade is a
movement promoted by non-governmental organisations from all over the
world, which are engaged in the commercialisation of the products, which
come from the Third World. It aims at changing the unfair commercial
transactions between the developed and developing countries. This
movement is promoted by important organisations such as the International
Federation for Alternative Trade (IFAT), the European Fair Trade Association
(EFTA), the Fair Trade Labelling Organisation (FLO), the Network of
European World Shops (NEWS), etc.
Key - and unique - aspects of Fair trade are:
There is a focus on disadvantaged smallholders at the bottom of supply

chains.
Producers receive a fair and stable price, which covers the costs of
sustainable production and a Fair trade premium for investment in social
development projects.
It helps producer groups organise themselves democratically to protect

their rights.
It empowers producer groups through provision of information on markets

and supply chains.
It uses the FAIRTRADE Mark as a tool to build a social consumer

movement pushing for change in global trading.
Fair trade is being widely recognized as a key tool for sustainable

development and poverty eradication. Fair trade also plays a crucial role
in raising awareness among European consumers about global injustice
and about the social responsibility of private and public actors.
Annexes
147
11.5
Basic Introduction TLS 8001-2003
The Council on Economic Priorities Accreditation Agency has driven the

development of Social Accountability 8000 (SA8000) a system that defines a
set of auditable standards and an independent auditing process for the
protection of workers rights.
Based on conventions of the International Labour Organization and related
international human rights instruments - including the Universal Declaration
of Human Rights and the UN Convention on the Rights of the Child -- SA
8000 is a common standard for companies seeking to guarantee the basic
rights of workers and is the first auditable social standard. SA8000 provides a
framework for the independent verification of the ethical production of all
goods, made in companies of any size, anywhere in the world. It will provide
a major opportunity for companies to demonstrate their commitment to best
practice in the ethical manufacture and supply of the goods they sell.
TLS 8001 is drafted under the above standards and the provisions of the
Constitution of Royal Thai Kingdom, the Labour Law, Labour welfare, Labour
relations and Occupational safety, health and environment.
Brief overview :
Child Labour: No workers under the age of 15; the company shall not
expose young workers (age over 15 and under 18 years) to situations in or
outside of the workplace that are hazardous, unsafe, or unhealthy.
Forced Labour: No forced labour, including prison or debt bondage labour;
no lodging of deposits or identity papers by employers or outside recruiters.
Health and Safety: Provide a safe and healthy work environment; take
steps to prevent injuries; regular health and safety worker training; system to
detect threats to health and safety; access to bathrooms and potable water.
Freedom of Association and Right to Collective Bargaining: Respect the
right to form/join trade unions and bargain collectively; where law prohibits
these freedoms, facilitate parallel means of association and bargaining.
Annexes
Discrimination: No discrimination based on race, caste, origin, religion,

disability, gender, sexual orientation, union or political affiliation, or age.
148
Discipline: No corporal punishment, mental or physical coercion, verbal

abuse or sexual harassment.
Working Hours: Comply with the applicable law but, in any event, no more
than 48 hours per week with at least one day off for every seven-day period;
voluntary overtime paid at a premium rate and not to exceed the hours as
specified in Labour Protection Law.
Compensation: Wages paid for a standard work week must meet the legal
and industry standards and be sufficient to meet the basic need of workers
and their families; no disciplinary deductions.
11.6 Advantages & Disadvantages of Contract Farming
Farmers
Advantages
Inputs and production services are often supplied by the sponsor

This is usually done on credit through advances from the sponsor
Contract farming often introduces new technology and also
enables farmers to learn new skills
Farmers price risk is often reduced as many contracts specify

prices in advance
Contract farming can open up new markets which would otherwise

be unavailable to small farmers
Disadvantages
Particularly when growing new crops, farmer face the risk of both
market failure and production problems
Inefficient management or marketing problems can mean that

quotas are manipulated so that all contracted production is
purchased
Sponsoring companies may be unreliable or exploit a monopoly

position
The staff of sponsoring organisations may be corrupt, particularly

in the allocation of quotas
Enterprises (Sponsor)
Advantages
Contract farming with small farmers is more politically accepted

than, for example, production on estates
Working with small farmers overcomes land constraints

Production is more reliable when open-market purchases and the
sponsoring company faces less risk by not being responsible for
production
More consistent quality can be obtained than if purchases were

made on the open market
Disadvantages
Contracted farmers may face land constraints due to a lack of

security of tenure, thus jeopardizing sustainable long-term
operations
Social and cultural constraints may affect farmers ability to

produce to managers specifications
to farmer discontent
Farmers may sell outside the contract (extra-contractual

marketing) thereby reducing processing factory throughput
Farmers may divert inputs supplied on credit to other purposes,

thereby reducing yields
Annexes
Poor management and lack of consultation with farmers may lead
149
11.7 List of Home Textile Testing
Textile Testing Costs

Item
1
Testing List
Unit Price
Azo Dyestuffs Natural/Synthetic Fiber
3,000.00
Annexes
Polyester Blend
150
PH Value
Formaldehyde Content
Heavy Metal
5,000.00
400.00
1,350.00
Pb
600.00
Cd
600.00
Cr
600.00
Cr(VI)
800.00
Co
600.00
Dimensional Stability to washing (1 wash)
450.00
Appearance after laundering (when perform with item 5)
220.00
Color Fastness to Chlorine Bleach (Spot Test)
300.00
Color Fastness to Dry Cleaning
400.00
Color Fastness to Hot Pressing
370.00
Color Fastness to perspiration
390.00
Color Fastness to Washing
320.00
Care Label Recommendation
350.00
Fiber Composition (2 Components)
600.00
Threads per Unit Length
310.00
Total
13,660.00
Vat 7%
956.20
Grand Total Price

Remarks:
14,616.20
The Price is including Polyester yarn

Lead time of testing process is 5-7 work days
The sample size for testing is need 4 m
Soi Trimit, Rama 4 Road, Phrakanong, Klong-toey, Bangkok 10110 Thailand

Tel: (66-2) 7135492, Fax: (66 2) 712 1592-3 www.thaitextile.org email: info@thaitextile.org
11.8 Sources
A Handbook for Value Chain Research, Institute of Development Studies,
University of Sussex, 2001
A Practical Market Access Guild for the Western Cape Crafters: Home
Textile & Soft Furnishings in the USA & UK Markets, Prepared for CCDI
(Cape Craft & Design Institute) by Kaiser Associates, 2003
A Unique Village Silk Weaving Project in Thailand, Ban Reng Khai Website,
2007 (http://www.banrengkhai.com/pages/village.html)
A Unique Silk Production in Thailand Ban Reng Khai Website, 2007 (http://
www.banrengkhai.com/pages/silk.html)
A Unique La Silk Product in Thailand Ban Reng Khai Website, 2007
(http://www.banrengkhai.com/pages/lea_silk.html)
Adjusting to a New Era for Textile and Clothing, Asia-Pacific Human
Development, 2006
AUTEX Research Journal, Vol. 3, No. 4: Environmental Indicators of Textile
Products for ISO (Type III) Environmental Product Declaration, Institute of
Fibre Materials Science, Tampere University of Technology, 2003
CBI Market Survey: The Household and Furnishing Textiles Market in the
EU, CBI Market Information Database, CBI, August 2006
Chemicals Policies in Europe Set New Worldwide Standard Registration,
Evaluation and Authorization of Chemicals (REACH), Lowell Centre for
Sustainable Production, 2003
Chinas Textile and Clothing Industry, Larry D. Qiu, 2005
Clothing for People with Sensitive Skin, Disabled Living Foundation, 2006
Countdown to REACH, Deloitte, 2007
Craft Industry Development Strategy, Newfoundland and Labrador, 2002
Annexes
Clothing Dermatitis and Clothing-Related Skin Conditions, Safety and

Health Assessment and Research for Prevention Washington State
Department of Labor and Industries, 2001
151
Craft Second Paper: Policy Recommendations and Interventions, Kaiser

Associates, 2005
Doing Business with the EU, European Eco-label, 2002
Eco-Textiles, Intertek Labtest, 2004
Eco Textiles Summary, Grolink AB, 1999
Economic and Industry Situation, Research Department, IFCT, 2004
Environment Fact Sheet: Reach- a new chemicals policy for the EU,
European Commission, 2006
Ethiopian Handloom Product Export Market Study, Addis Ababa, Femseda
and MTI joint study team, October 2004
EU Market Survey 2005: Gifts and Decorative Articles, Centre for the
Promotion of Imports from Developing Countries, 2005
EU Market Survey 2005: Outerwear including Leather Garments, Centre for
the Promotion of Imports from Developing Countries, 2005
European Chemicals Policy Reform Countdown to REACH, European
Environmental Bureau (EEB), 2005
Export Development Pilot Programme, Report on Fair Trade Fair and
Symposium Cancun Mexico, Cape Craft & Design Institute, 2003
Export Market Opportunity Analysis: Western Cape Craft Industry (Interim
Report), Cape Craft & Design Institute, 2003
Export Prospects of Silk and Silk Based Products, Science Tech
Entrepreneur, 2007
Annexes
Export Quality: An Introduction to Eco-labelling, International Trade Centre,

2003
152
EU Legislation: Flame Retardants in Textiles, CBI Market Information

Database, 2007 (http://www.cbi.nl/marketinfo/cbi)
Fact Sheet: Home Textile, Thai Textile Institute, 2007
Favourite Fibres of Hand-spinners, Siobhan nic Dhuinnshleibhe, 2005
Final Report for the North East Thailand Silk Value Chain Study, Agrifood
Consulting International, 2005
France Legislation: Flame Retardants in Textiles, CBI Market Information

Germany Legislation: Flame Retardants in Textiles, CBI Market Information
Handicraft Sector Design and Business Development Manual, International
Labour Organization, 2006
Home Textile, Andrea Stahl, U.S. Commercial Service Germany, July 2005
How to make our Sangdao Shot Thai silk, Sam Hober Website, 2007 (http://
www.samhober.com/silkmaking/howtomakesilk.htm)
Impacts of Environmental Standards and Requirements in EU Countries on
Chinas Textile Industry, Policy Research Centre for Environment and
Economy, 1999
Integrate Pollution Prevention and Control (IPPC): Reference Document on
Best Available Techniques for the Textiles Industry, European Commission,
2003
Local Textiles, Kasetsart University (gis.agr.ku.ac.th/.../html/
Lesson03/3.html)
Mulberry leaf supplement for sheep fed ammoniated rice straw, FAO (http://
www.fao.org/DOCREP/005/X9)
National Silk Policy - 2005, Ministry of Textile and Jute, Bangladesh, 2005
Novel Sustainable Bioprocesses for European Colour Industries, Sophied,
2004
Sector Development Strategy, Trade and Industry South Africa Department,
2006
Silk Export Prospect Unravelling, China Internet Information Centre, 2002
Silk Production in Australia, The Rural Industries Research and
Development Corporation, 2005
Silk Review 2001: A Survey of International Trends in Production and

Trade, International Trade Centre, UNCTAD/WTO, 2002
Silk Sector Update, IDBI Capital, 2006
Annexes
Silk Reeling and Testing Manual, FAO Agricultural Services, 1999
153
Summary of Thailand Competitiveness Matrix, Office of the National

Economic and Social Development Board, 2004
Textiles and Clothing, EU-India Joint Initiative for Enhancing Trade and
Investment, 2002
Textile and Clothing Industry, Office of Industrial Economic, 2004
Textile Structures for Technical Textiles, Bulletin of the Chemists and
Technologists of Macedonia, Ss Cyril and Methodius University, 2004
Thailand Economic Monitor, World Bank Thailand Office, 2006
Thailands Fashion Industry, Thailand board of Investment, 2004
Thai Silk, Department of Agriculture Extension, 2002
Thai Textile Indications, Thailand Textile Institute, 2005
The China Threat to World Textile and apparel Trade, National Council of
Textile Organizations (NCTO), 2004
The Competitiveness of Subcontracting in the Textile and Clothing Industry
in the European Union, Commission of the European Communities, 1996
The EU Eco-label and Health, Danish Ministry of the Environment, 2006
The European Eco-Label, The Flower, 2006
The Foundation Ban Reng Khai Website, 2007 http://
www.banrengkhai.com/pages/foundation.html
The Home/Furnishing Textile Industry in 2003-2004, Pitti Immagine Gasa,
Area Centro Studi of Sistema Moda Italia, 2004
Annexes
The Importance of Public Investment for Reducing Poverty in MiddleIncome Countries: The Case of Thailand, Fan, Shenggen, Somchai
Jitsuchon and Nuntaporn Methakunnavut, International Food and Research
Institute, 2004
154
The Investment Potential of Silk Industry of the Republic of Uzbekistan,

Uzbek Silk Association, 2005
The Future of Thailands Textile and Garment Industry, Chalumpon
Lotharukpong, International Chamber of Commerce, 2003
The Global Apparel Value Chain: What Prospects for Upgrading by

Developing Countries?, United Nations Industrial Development Organization
(UNIDO), 2003
The Story of ThaiCraft, The ThaiCraft Association, 2007 (www.thaicraft.org/
new/about-us.html)
The Suitability of Eco-label Criteria to Derive Environmental Baseline
Requirements Applicable to all Products on the Market, AEA Technology
Plc., 2003
The Textile and Clothing Industry in the EU, Werner Stengg, Enterprise
Directorate-General, European Commission, 2001
The Textile Industry in Thailand, Department of Industrial Promotion, 2002
ThaiCraft Fair Trade, The ThaiCraft Association, 2007
(www.thaicraft.org/new/tc-fair-trade.html)
Thailands Fashion Industry Designing a Bright Future, Thailands Board of
Investment, 2006
Thailand Northeast Economic Development Report, Joint Report of
Thailands National Economic and Social Development Board and the World
Bank, 2005
Trade in Textiles and Apparel in South Asia, Saman Kelegama and Bilesha
Weeraratne, 2005
Trends and Drivers of Change in the EU Textiles and Leather Sector:
Mapping Report, European Foundation for the Improvement of Living and
Working Conditions, 2004
UK Legislation: Flame Retardants in Textiles CBI Market Information
Database, 2007 (www.cbi.nl/marketinfo/cbi)
Value-Chain cum BDS Market Assessment of the Silk Sector in
Bangladesh, GTZ-Progress, 2005
Annexes
World Distribution and Utilization of Mulberry and its Potential for Animal
Feeding, Manuel D. Snchez, Animal Production Officer Animal Production
and Health Division FAO, Rome (www.fao.org/docrep/005/X9895E/
x9895e02.htm)
155
Websites:
www.cbi.nl
www.customs.go.th
www.depthai.go.th
www.dip.go.th
www.doae.go.th
www.doa.go.th
www.fao.org Agriculture Statistical Database (FAOSTAT)
www.ibef.org
www.industry.go.th
www.qsilk.net
www.thaitextile.org
www.usda.gov
www.wto.org
www.salamaithai.com
www.thaitextile.org/TSA/
www.qthaisilk.com
Annexes
www.jimthompson.com
156
Acknowledgements
Publisher
Institute for Science and Technology Research and Development (IST)
The study was produced by contributors
from IST, Chiang Mai University, namely:
Assoc. Dr. Chesada Kasemset
Dr. Astrid Faust
Mrs. Nittaya Mahachaiwong
Mr. Wim Bloemen
Mr. Surachai Leewattananukul
Ms. Siripun Charleanchaimonkon
Ms. Usakorn Wattanakool
Mrs. Duangtar Novacek
Ms. Nipasak Kongngam
Mr. Amnuay Wattanakornsiri
Ms. Piyachat Kriwanit
Mr. Rattapon Panjaruang
Ms. Nanthana Kongkamin
Ms. Juthamas Suparatwarakul
Ms. Phakwilai Sahunaru
Ms. Ketsuda Karakan
and from FBA, Chiang Mai University, namely:
Photography
Ms. Kotchakorn Moonta
Mr. Worn Donchai
Mr. Nakorn Sarawana
Funding
The project was co-financed by the European Union
Proofreading
Mr. Chris Catto-Smith
Layout
Ms. Petra Erbe
Print
Blue Print Design
Acknowledgements
Asst. Prof. Dr. Chirawan Chaisuwan

Ms. Traci Morachnick
157
Disclaimer
This document has been produced with financial assistance of the European
Commission.
The views expressed herein are those of the Institute for Science and
Technology Research and Development, Chiang Mai University, and can
therefore in no way be taken to reflect the official opinion of the European
Commission.
On behalf of
&
Faculty of Business Administration (FBA), Chiang Mai University
Address
239 Huay-kaew Road, Tambon Suthep, Amphoe Muang, Chiang Mai 50200,
THAILAND
or
Address
P.O. Box 111, Chiang Mai University, Chiang Mai 50200, THAILAND
158
Tel.:
+66 53 892224, 942476
Fax.:
+66 53942476
E-mail:
eu-ht@ist.cmu.ac.th
cotton@ist.cmu.ac.th
Website: www.thaihometextile.net

Thai Home Textiles Value Chain Analysis

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Value Chain Analysis for Thai Home Textiles

EU-Thailand Small Projects Facility

Background & Rationale of the Project

Basic Sub-sector Features

Background of the Development of the Silk sector in Thailand

Government policies for the Silk Sub-sector

General Issues - Silk

General Issues - Home Textiles

Features of Home Textiles

World Production & Trade

Demand & EU Market

Thailands Export Market

Silkworm Egg Suppliers

Yarn & Fabric Traders

Home Textile Producers

Trading Agencies / Exporters

4.10 Traders / Domestic Wholesalers

4.11 Local Retail Outlets

4.12 Supplying Industry

Related Institutions & Efforts

Government Initiatives taken to promote the Silk Sub-sector

Value Chain Analysis

Competitive Advantages & Sector Strategies

General Review in Thailand

Constraints & Opportunities

Home Textile Producers

Trading Agencies / Exporters

Sub-sector Constraints / Opportunity Analysis

Introduction & Background

Provision of & Satisfaction with existing Services

Initial Scope & Ideas for Intervention

Key Benchmarks of Thai Home Textile vis--vis Competitors

Thai Silk Exports in 2006 classified by HS. Code

Basic Introduction - TLS 8001-2003

Advantages & Disadvantages of Contract Farming

List of Home Textile Testing

Centre for the Promotion of Imports from Developing countries

Craft Design Service Centre

Cost, Insurance and Freight

International Standard Organisation

Institute for Science and Technology, Research and Development

Ministry of Science and Technology

Maximum Residue Level

National Metal and Materials Technology Centre

Northeastern Economic Development

National Economic and Social Development Board

Network of European World Shops

National Statistics Office

National Science and Technology Development Agency

Office of Agricultural Economics

Original Brand Manufacturing

Original Design Manufacturing

Original Equipment Manufacturing

Office of Industrial Economics

One Tambon One Product

The Queen Sirikit Institute of Sericulture

Research and Development

Societ General de Surveillance

Small and Medium sized Enterprises

Thailand Creative and Design Center

Council of Textile and Fashion Industries of Australia Limited

Thailand Textile Institute

Textile Testing Centre