ANALYSIS OF COMPANY SURVEY DATA

ANALYSIS OF COMPANY SURVEY DATA CAMBODIAN EXPORT DIVERSIFICATION AND EXPANSION PROGRAM (CEDEP I): HIGH VALUE SILK COMPONENT APRIL 2013

Table of Contents 1. INTRODUCTION... 3 2. BACKGROUND NOTE ON DATA ANALYSIS... 3 3. OVERVIEW OF THE CAMBODIAN SILK SECTOR AND ITS SOCIO-ECONOMIC IMPACT... 3 3.1 EMPLOYMENT AND WOMEN... 3 3.2 COMPANY STATUS... 4 3.3 INCOME GENERATION... 4 3.4 ENVIRONMENT... 5 4. ASSESSMENT OF PRODUCTION AND EXPORT CAPACITIES... 6 4.1 PRODUCTION OUTPUTS: FINISHED PRODUCTS... 6 4.2 PRODUCTION PROCESSES... 7 4.3 PRODUCTION INPUTS: SILK YARN... 7 4.4 QUALITY MANAGEMENT... 8 4.5 PRODUCT DESIGN... 8 4.6 EXPORTS... 9 4.7 SALES TO THE TOURISM MARKET... 11 4.8 MARKETING, CONTACTS WITH BUYERS, TRADE FAIRS... 12 4.9 PACKAGING... 13 4.10 TECHNICAL ASSISTANCE... 14 5. BASELINES VIS-À-VIS KEY PERFORMANCE INDICATORS... 15 ANNEX I: COMPANY SURVEY QUESTIONNAIRE... 19 2

1. INTRODUCTION A company survey was carried out at the outset of the High Value Silk Component of the Cambodia Export Diversification and Expansion Program (CEDEP I), which is a program funded by the Enhanced Integrated Framework (EIF) Trust Fund. The objectives of the survey were to: i) measure the overall performance of the silk sector in Cambodia and its socio-economic impact on income generation and employment, focusing on women; ii) assess the production and export capacities of Cambodian silk companies; iii) establish baselines for project indicators; and iv) identify a target group of beneficiary silk companies. This analysis summarizes the results of the company survey related to the first three abovementioned objectives and provides inputs for a full-fledged sector value chain analysis which will be carried out at a later stage. A target group of 14 beneficiary companies was also identified based on survey results and details on the identification process are addressed in a separate report. Based on the existing data (from previous silk projects, company directories, desk research and information from sector association), a list of 52 Cambodian silk enterprise was established and a survey questionnaire was developed (see Annex I). Among the 52 pre-identified companies, 16 companies were not interested in the project while 6 companies appeared not to be in business anymore. The survey was therefore conducted towards a total of 30 companied through physical visits and phone calls from December 2012 to February 2013. 2. BACKGROUND NOTE ON DATA ANALYSIS This analysis is based on the data provided by the 30 surveyed companies. However, not all the questions in the questionnaire were answered by all 30 companies. Therefore, for each question, averages were calculated using different denominators corresponding to the number of companies that answered a particular question. It is to be noted that companies that had not provided any answer to a specific question were not included in the calculation related to this particular question. The data is analysed according to two different groups: one group corresponding to all 30 companies which responded to the survey questionnaire, and one group corresponding to the target group of 14 beneficiary companies. The type of group used as a reference for each table or graph is indicated. 3. OVERVIEW OF THE CAMBODIAN SILK SECTOR AND ITS SOCIO-ECONOMIC IMPACT This Chapter provides an overview of the Cambodian silk sector based on the data collected from the 30 companies. While the data used for this analysis is not comprehensive, it provides a good representative sample which can adequately describe an overall picture of the sector and its impact. 3.1 EMPLOYMENT AND WOMEN 2000 1500 1000 500 0 Graph 1. Total no. of employees and weavers working with the 30 companies 653 1273 No. of employees Men 16 957 No. of weavers Women Graph 1 shows that in total, the 30 companies are employing - full time as well as subcontracted - 1,926 employees, including 66% women. Two thirds of the workers in the Cambodian silk sector in Cambodia are therefore women. The 14 target beneficiary companies of the project employ a total of 217 persons of which 189 women (87%) and 2 companies are owned by women. The 30 companies work with a total of 973 weavers, of which 98% are women. Weavers are largely located in the following 9 Cambodian provinces: Siem Reap, Takeo, Prey Veng, Banteay Meanchey, Kampong Cham, Kampong 3

Thom, Kandal, Phnom Penh and Stung Treng. 3.2 COMPANY STATUS 36% of the companies are registered as a commercial entity while 3% are operating as associations. More than half of the companies are therefore not registered (see Graph 2). Graph 2. Is your company registered? Association 3% Registered as a commercial entity 36% Not registered 61% 3.3 INCOME GENERATION On average, silk represents 70% of companies whole business. Graph 3. Average annual sales per company (USD) 500000 400000 300000 200000 100000 390909 425479 497828 0 Annual sales 2010 2011 2012 (estimate) Companies made annual sales worth USD 497,828 in 2012 (out of a total of 24 companies which responded). Annual sales have increased over the last three years, by 9% from 2010 to 2011 and 17% from 2011 to 2012 (see Graph 3). Graph 4 shows average annual sales figures in silk according to different market segments, namely domestic sales, sales to tourists and exports or cross-border sales. In 2012, domestic sales were the highest (USD 45,306), before sales to tourists (USD 36,919) and exports (USD 25,417). Domestic sales represent the most dynamic market segment in terms of value. It is to be noted however that only 8 companies made sales to domestic markets in 2012 compared to 17 which either sold to tourists or exported. Sales to tourists reached USD 36,919 after a gradual decrease during 2009 and 2011 and bouncing back in 2012. Cross border sales have slightly increased since 2010 by 6% and 5% in 2010 and 2011 respectively, reaching USD 25,417 in 2012. 4

40000 30000 20000 10000 0 Graph 4. Average annual sales in silk per company according to market segmentation (USD) 45306 36810 29686 23641 40362 37677 36919 33787 24948 22879 24206 25417 Domestic sales Sales to tourists Cross-border sales 2009 2010 2011 2012 (estimate) Graph 5 shows that the levels of profit margin from sales in the different market segments does not differ greatly one from the others. The high profit margin of USD 31,201 from domestic sales reported in 2010 should be regarded as an exception possibly caused by data reporting errors. 40000 30000 20000 10000 0 Graph 5. Average profit margin from sales of silk products per company (USD) 31201 15195 12108 12417 12965 14077 9487 11891 12491 10846 12937 13280 Domestic sales Sales to tourists Cross-border sales 2009 2010 2011 2012 (estimate) 3.4 ENVIRONMENT Graph 6. Do you apply some form of environmental protection? No 22% Yes 78% 78% of the companies apply some measures for environmental protection. Among those companies applying the measures, 37% of them apply the measures at weaver community level while 63% apply them at company level. There are 2 companies (13%) which apply the measures at both levels. The companies use various measures to protect the environment such as using natural dyes and environmentally friendly production processes. (see Graph 6) 5

4. ASSESSMENT OF PRODUCTION AND EXPORT CAPACITIES 4.1 PRODUCTION OUTPUTS: FINISHED PRODUCTS The 5 most produced silk items by surveyed companies are bags, fabric, scarves, accessories and handkerchiefs (see Graph 7). Meanwhile, items produced by the most number of companies are scarves, cushions, accession, ties and fabric (see Graph 8). This is explained by the fact that there are few big players in the market responsible for producing certain items in a large quantity, e.g. Artisan d Angkor. On average, each company produces 5 different items. Focusing on 5 most important products, each company produces approx. 25 scarves, 8 cushions, 26 accessories, 10 ties and 64.6 m 2 of fabric monthly. Across all product categories, each company produces more than 1,000 items per month, exclusive of fabric. 4 companies (out of 26) produce less than 500 items per month and only 5 companies monthly production exceeds the average of 1,000 items. Finally, it is to be noted that 86% of the companies are doing business not only in silk but also use other materials such as cotton. Therefore, the products they sell being 100% hand-woven silk, a mixed of silk and cotton or mixed silk with other fibre, or 100% cotton / other materials. Graph 7. Total no. of items produced monthly 1800 1600 1400 1200 1000 800 600 400 200 0 1,600 646 590 505 473 316 200 189 174 137 130 125 32 30 22 20 18 15 12 5 5 Graph 8. No. of companies producing 25 20 20 17 15 10 12 12 10 10 8 5 5 4 4 4 4 3 3 3 2 2 2 1 1 1 1 0 6

4.2 PRODUCTION PROCESSES Production of silk products can be divided into three parts namely: sourcing of silk fabric, processing and finalization of products (see Graph 9). About 50% of the companies are involved in the first stage of sourcing silk fabric, 93% in the processing stage and almost all the companies are involved in the final stage of finishing products. In summary, 50% of the companies start their production from weaving while the other 50% start it at the processing stage. Graph 9. Processing activities taking place in company Spinning Dyeing Weaving Second Dye process (e.g. tie dye) Sewing Silkscreen Stitching Finishing / Washing / Ironing Packaging Labelling 7% 32% 36% 46% 46% 50% 79% 96% 93% 93% 0% 20% 40% 60% 80% 100% Graph 10 demonstrates average production lead time for each product category. The product which takes most time is sampot which is a long rectangular wrap worn around the lower body. On average, it takes 37.5 days to finish a sampot by a company from the whole group. Though small in size, scarf also requires much time, 24 days on average compared to 2 days required to produce a tie. 50 45 40 35 30 25 20 15 10 5 0 Graph 10. Production lead time -from buyer request to first sample (number of days) Overall Selected companies 2 2.4 2 2 2.5 3.4 3.6 2 2.5 2.7 4 2.8 7 4.7 5 5 5.2 6 16.5 17.4 16.4 14.3 10.6 11.7 12.2 8.3 8.7 24 37.5 45 4.3 PRODUCTION INPUTS: SILK YARN 50% of the 17 companies which responded are involved in weaving and directly work with weavers to get silk fabric while the other 50% purchase silk fabric either directly from market or via intermediaries. 17 companies (57%) out of 30 companies reported that they hire suppliers (mostly subcontracted) to source silk fabric. There are few companies which produce their own silk fabric. 7

Among the companies involved in weaving, all purchase fine silk and 76% purchase rough silk. Most companies use both types. The most commonly used fine silk yarn is from Vietnam (71%), Cambodia (65%) and China (41%). For rough silk, Vietnam (65%) and Cambodia (65%) are the major sources of silk yarn. (see Graph 11) 100% 80% 60% 40% Graph 11. Type of silk yarn that the companies use 71% 65% 65% 65% 41% 20% 0% Fine silk-vietnam Fine silk-domestic Fine silk-china Rough silk-vietnam Rough silk- Domestic 4.4 QUALITY MANAGEMENT The majority of companies (93% out of 29) have some sort of a quality management system in place at three different levels. Graph 12 shows that 83% of the companies check the quality of their products at the final stage of production. At the weaver community level and middleman/trader/supplier level, the quality check is done less frequently - 14% and 28% respectively. Focusing on the target group of 14 beenficiary companies, companies tend to have more thorough quality management systems. 43% of the selected companies use a quality management system at least at two different production stages as compared to 24% for the larger group. Graph 12. Quality management system At company level 86% 83% At middleman/trader/supplier level At weaver community level 14% 28% 29% 36% Selected group Whole group No quality management system 0% 7% 0% 20% 40% 60% 80% 100% 4.5 PRODUCT DESIGN Graph 13 shows that product designs are developed in various ways. In most of the cases (60%), product design comes from buyers who place orders and give specific design instructions. 56% of the companies (out of 25) have in-company designers and 48%of the company owners also develop new designs. 68% of the companies develop new designs through as mix of methods, together with buyers, with in-company designers, directly by company owners or with the support of contracted designers. 8

Graph 13. Who is reponsible for developing new designs? Commissioned by buyer 60% In-company designer 56% Company owner 48% Contracted designer 16% 0% 10% 20% 30% 40% 50% 60% 70% 4.6 EXPORTS 24 companies (out of 30) have already exported. On average, a company from the larger group had cross-border sales worth USD 25,417 in 2012 while a company from the target group had sales worth USD 32,047 in 2012. In both groups, crossborder sales increased in 2012, by 5% for the larger group and 9% for the target group (see Graph 14). In the whole group of 30 companies which responded to the survey questionnaire, 8 companies already have an export strategy and in the target group of 14 beneficiary companies, 5 have an export strategy. 40000 30000 20000 10000 0 Graph 14. Cross border sales in silk per company (USD) 24206 25417 2011(overall) 2012 (Est. - overall) End of Project (overall) 29442 32047 2011(11 selected 2012 (Est.- 11 selected End of Project (selected Graph 15 shows that, on average, companies had a profit margin of USD 13,280 from exported products. This figure reaches USD 22,604 when it comes to the target group of 14 companies. In both groups, there was an increase in profit margin in 2012 compared to the previous year. 20000 15000 10000 5000 0 Graph 15. Average profit margin of exported products per company (USD) 12937 13280 2011(overall) 2012 (Est. - overall) End of Project (overall) 17791 2011(12 selected 22604 2012 (Est.- 9 selected End of Project (selected 9

Graph 16 shows the numbers of markets reached by a company in 2012. On average, a company exported to 3 to 4 different markets in 2012. Figures are not equal to the numbers of countries as all European countries were grouped and counted as one to avoid double counting. Graphs 17 and 18 demonstrate that main export markets for Cambodian silk companies are Japan, Australia and Europe. In general, sales increased in all main export markets except the USA in 2012. Japan remains the largest market and European countries represent important export destinations. See the separate report on importing markets for silk products for more information. 4 3 2 1 0 Graph 16. No. of markets reached per company in 2012 3.14 3.78 2012 (Est. - overall) End of Project (overall) 2012 (Est. - 9 selected End of Project (selected 60000 40000 Graph 17. Export markets and sales in silk in respective markets (USD) in 2011 40412 67866 Graph 18. Export markets and sales in silk in respective markets (USD) in 2012 44404 20000 0 25014 18554 16128 13593 10000 6400 22768 20755 16785 12027 10000 Companies from the larger group reported that they currently export 3 different product lines each while companies from the target group export 4 product lines each on average (see Graph 19). Table 1 provides further information on products exported per destination market. Main exports are concentrated on fashion items such as scarves, accessories and bags. 6 4 Graph 19. No. of product lines exported per company 3.54 4.29 2 0 2012 (overall) End of Project (overall) 2012 (14 selected End of Project (selected 10

Table 1 Silk products exported in respective markets Export Markets Japan Germany Australia France USA UK Singapore Canada Korea New Zealand Spain Main silk products exported (in order of importance) Scarves, Bag and Purse, Shawl, Clothing Accessories, Fabric, Bag Scarves, Accessories, Clothing, Bag Scarves, Bag, Accessories, Cushions, Fabric Scarves, Accessories, Bag, Blanket and Shawl, Ties, Shoes Bags, Scarves, Accessories, Fabric Accessories, Clothing, Bag Scarves, Accessories, Purse Scarves, Bag, Fabric 4.7 SALES TO THE TOURISM MARKET Bag, Clothing, Blanket, Shawl, Accessories Clothing, Accessories & Scarves & Ties 19 companies have already made sales to tourists. On average, a company from the larger group made sales to tourists amounting to USD 36,919 and a company from the targeted group made sales to tourists worth USD 18,064 in 2012 (see Graph 20). The average sales value of the largest group is almost twice as high as that of the selected group. However, the growth rate is higher for the targeted group compared to the largest group, 13% and 9.2% respectively. 40000 30000 20000 10000 0 Graph 20. Sales in silk to tourists per company (USD) 33787 36919 2011(overall) 2012 (Est. - overall) End of Project (overall) 15985 18064 2011(9 selected 2012 (Est.- 9 selected End of Project (selected Compared to export sales, sales to tourists yielded lower profit margins in general. The profit margins from sales to tourists of the target group of 14 companies in 2011 and 2012 were twice as low as those from export sales and even the profit margin in 2012 was reduced by 7.7% from 2011 (see Graph 21). 15000 10000 5000 0 Graph 21. Average profit margin of silk products sold to tourists per company (USD) 11891 12491 2011(overall) 2012 (Est. - overall) End of Project (overall) 9775 9024 2011(10 selected 2012 (Est.- 10 selected End of Project (selected 11

Graph 22 shows the main type of outlets used by companies to sell to tourists are shops and showrooms. 48% of the companies have at least two outlets for tourists meaning that 52% of the companies use general company shops/showrooms which serve not only tourists but also for locals, which however have different tastes and preferences. Other channels to reach tourists domestic tourism markets, hotel outlets and airports are not very much used by the surveyed companies. Graph 22. Main outlets to sell to tourists Company Shop/Showroom Domestic Tourism Markets Hotel outlets Consignment AAC shop Airports 4% 4% 19% 19% 26% 89% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 4.8 MARKETING, CONTACTS WITH BUYERS, TRADE FAIRS The most commonly used marketing tools are website, product catalogue and participation in trade fairs. 89% out of 27 companies use their own websites and 59% use product catalogues and participate in trade fairs to promote their products. Only a small number of companies use brochures and guidebooks. On average, each company uses 3 different marketing tools. Social networking services such as Facebook and Twitter are not actively used. (see Graph 23) Graph 23. Marketing tools used by the companies Website Product catalogue Fairs Guide Book Brochure Partner's website Newspaper ads 19% 15% 19% 8% 15% 15% 11% 31% 59% 59% 77% 77% Selected companies Overall 92% 89% 0% 20% 40% 60% 80% 100% As noted earlier, 24 companies are already exporting and they use various channels to contact international buyers. While 75% of the companies capitalize on buyer visits to their shops, 63% use more than two channels to develop new contacts. Graph 24 shows that 42% of the companies participate in trade fairs to make new buyer contacts. Out of the 27 companies that answered this question, 96% have already participated in a trade fair. Given investment required in terms of time and cost, it is clear that the companies regard participation in trade fairs as an effective way to meet new buyers. 12

Graph 24. How to contact international buyers Buyer visits (in shop for example) 75% E-commerce (website) 50% Trade fairs 42% Through intermediaries: AAC 29% Through friend/association 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% Trade fairs where the majority of companies have already exhibited are local ones, at 56%, regional ones (BIH & BIG fair in Thailand). Graph 25 shows that the 5 most visited trade fairs are local and regional ones held in Thailand, Japan, Vietnam and Korea. Graph 25. Trade fairs in which the companies participated Local trade fair 56% Thailand: BIH&BIG fair:bangkok 30% Lifestyle Japan: Tokyo BIG SIGN Lifestyle Vietnam (Ha Noi)/Ho Chi Minh 22% 22% Seoul, Korea 11% 0% 10% 20% 30% 40% 50% 60% 4.9 PACKAGING Graph 26 shows that the companies use different packaging materials for different market segments. For domestic sales, they tend to prefer bags made from recycled newspaper, palm, cotton or plastic. For export sales, they mainly use poly bag and carton box. 85% of the companies source packaging materials from local markets which are likely to offer only a limited range of materials. Graph 26. Packaging materials used by the companies 100% 88% 92% 80% 60% 59% for domestic sales for export sales 40% 20% 28% 21% 17% 14% 0% Poly-bag Recycled Newspaper/bag Palm box Cotton bag Plastic bag Carton box 13

4.10 TECHNICAL ASSISTANCE When asked about the main problems they face in their daily work, 60% of the companies identified packaging as an issue, followed by marketing and sales (57%), lack of finance (53%) and design (47%) (see Graph 27). It is however important to note that the types of technical assistance that the companies consider most important to expand their business which are design, costing and pricing, identification of new markets and buyers, marketing and sales, and sourcing of inputs (in order of importance). Graph 27. Main problems the companies face Packaging Marketing and sales Lack of finance Design Supply material Costing and Pricing Communication with buyers (English skills) Relations with weavers Quality management Logistics Production equipment 33% 27% 23% 17% 17% 13% 13% 60% 57% 53% 47% 0% 20% 40% 60% 80% Graph 28. Have you ever received a line of credit or loan from a bank for your business? Yes 26% Graph 28 confirms that access to finance is an issue since only 26% of the companies have already received a line of credit or loan from a bank. No 74% 14 companies (47% out of 30 reported that they provide technical assistance to weavers. Graph 29 shows that 57% of the companies provide technical assistance on weaving and 43% on design. Other areas of technical assistance include colour and pattern combination, and safety and health. Graph 29. Areas of technical assistance provided by the companies Weaving 57% Design 43% Colour and pattern combination Safety/Health OSH (Occupational Safety and Health) 7% 7% 7% 0% 10% 20% 30% 40% 50% 60% 14

5. BASELINES VIS-À-VIS KEY PERFORMANCE INDICATORS The table below summarizes the baseline data extracted from the company survey according to the project logical framework and performance indicators. Strategy of Intervention Impact #1: Increased competitiveness of the Cambodian silk sector with a positive impact on poverty reduction through employment creation and income growth, especially among women, thereby contributing to meet Cambodia s MDGs Outcome #1: Market Development Increased sales of handmade high value silk products by 8 to 12 Cambodian silk exporters, and their respective production networks of female weavers in rural villages, to up to 5 selected importing markets and to international visitors Key Performance Indicators Increase in income of silk weavers by 200% Increase in cross-border exports of Cambodian silk products. Target: value increased by 50% at the end of the project. Benchmark to be developed under Output 1.1 (Export sales estimated at US$1.5m) 1 Increase in the sales value of silk products sold to tourists through different channels (shops, hotels, etc.) by male and female owned companies assisted by the project Number and diversification of markets reached Number of enterprises having met buyers and transacted business Baselines To be established Average for all 30 companies: USD 25,417 per company (17 answered) (2012 est.) Average for 14 target beneficiary companies: USD 32,047 per company (11 answered) (2012 est.) Average for all 30 companies: USD 36,919 per company (19 answered) (2012 est.) Average for 14 target beneficiary companies: USD 18,064 per company (9 answered) (2012 est.) Average for all 30 companies: 3.14 markets reached per company (14 answered) (2012 est.) Average for 14 target beneficiary companies: 3.78 markets reached per company (9 answered) (2012 est.) Not relevant Range of products exported Average for all 30 companies: 3.54 Remarks Income of silk weavers will be evaluated in a separate survey. Please see Graphs 1 and 6. Please see Graphs 2, 6 and 7. Please see Graph 3. Baseline not required: activityspecific indicator Please see Graph 4 and Table 1. 1 This estimate includes domestic sales to tourists, exclusive of sales by Artisans d Angkor 15

Output 1.1 Export potential and key export markets for high value handmade silk products identified and supply capacity analyzed Output 1.2 Marketing capacities of selected exporters strengthened and export marketing tools elaborated Road Map Pillar2 KPI 2.3.a: Exports in new markets increase product lines exported per company (22 answered) (2012 est.) Average for 14 target beneficiary companies: 4.29 product lines exported per company (14 answered) (2012 est.) For all 30 companies: Countries where surveyed companies currently export: Belgium, France, Germany, Italy Netherlands Switzerland Sweden UK USA Canada Australia New Zealand Japan Korea Singapore Thailand (22 answered) For 14 target beneficiary companies: Switzerland, UK, France, Germany, Spain, Italy, Sweden, Netherland, Belgium, USA, Australia, Japan, Korea, New Zealand, Canada, Singapore, Thailand (14 answered) Number of studies prepared Not relevant Baseline not required: activityspecific indicator Road Map Pillar 2 KPI 2.3.7.a: Silk Sector Profile developed by VCU is used as guidance for developing market opportunities Number of male- and femaleowned silk companies made aware of market potential Number of export plans developed and implemented by companies Number of beneficiaries (male/female) enabled to analyze export markets and formulate export plans Number of corporate marketing tools developed/improved with support of the project Not relevant Not relevant For all 30 companies: 8 companies already have an export strategy. (14 answered) 14 target beneficiary companies: 5 companies already have an export strategy. (8 answered) Average for all 30 companies: Average of 2 marketing tools used by a company (27 answered) 14 target beneficiary companies: Average of Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Note: Baseline does not include analysis of export markets 16

Output 1.3 Export and sales opportunities created in selected foreign and tourism market Outcome #2: Product Development Improved quality and product design of handmade Cambodian silk products to meet market demand requirements for targeted export Number of new buyer contacts established (Target: 25-35) Number/volume of orders received/letter of intent signed Number of trade fairs/marketing mission facilitated (Target: 4-6) Number of new sales outlets established (Target: 3-5) Pillar 2 Road Map KPI 2.3.7.d: Developing the value chain by integrating silk products into the tourism market Number of male- and femaleowned silk companies that attended dissemination workshop Number of new products and collections developed/adapted by exporters during project period Road Map Pillar 2 KPI 2.3.b: Exports of new products increase (in this case, new collections) Increase in profit margins of exported products 3 marketing tools used by a company (13 answered) Not relevant Not relevant Not relevant Nb. of outlets for direct sales Average for all 30 companies: all 28 companies which answered have an outlet for direct sales 14 target beneficiary companies: all 13 companies which answered have an outlet for direct sales Nb. of companies selling to tourists and how much For all 30 companies: 19 companies currently sell to tourists with average sales worth USD 31,487 per company in 2012 (21 answered) 14 target beneficiary companies: 10 companies currently sell to tourists with average sales worth USD 17,757 per company in 2012 (12 answered) Not relevant Not relevant Not relevant Average for all 30 companies: USD 13,280 per company (17 answered) (2012 est.) Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Baseline not required: activityspecific indicator Please see Graphs 5, 13 and 14. 17

markets and from international visitors Output 2.1 Skills of exporters in product innovation and design development strengthened Output 2.2 Improved vertical integration of silk value chain and enhanced technical skills of weaving communities to enable production of high quality handmade silk products in larger quantities Output 2.3 Quality and traceability of silk yarn imports ensured Acceptance rate of product samples by buyers with respect to compliance with quality requirements Number of designers (male/female) with improved knowledge and skills in project design and development Number of study tours conducted for designers (male/female) Number of corporate training workshops conducted (male/female) Number of (male/female) weavers who improved technical skills in yarn preparation, weaving and dyeing Road Map Pillar 2 KPI 2.3.7.e: Continuing capacity building among weavers/producers Number of (male/female) weavers serving the export market Share of production output compliant with spec card requirements Increased share of traceable silk yarn imports (as reflected through COs) Number of purchasing units strengthened Road Map Pillar 2: Addressing the problem of silk yarn supply Average for 14 target beneficiary companies: USD 22,604 per company (9 answered) (2012 est.) Not relevant Knowledge and skills will be assessed before and after trainings Not relevant Not relevant Knowledge and skills will be assessed before and after trainings Not relevant To be established To be established Only 2 companies responded: on average 85% of silk yarn imported by a company has a CO. Not relevant Not relevant To be measured based on the acceptance rate of products/collections presented to buyers To be measured by comparing knowledge and skills before and after trainings Baseline not required activityspecific indicator Baseline not required activityspecific indicator To be measured by comparing knowledge and skills before and after trainings Baseline not required activityspecific indicator Will be evaluated in a separate survey. Will be evaluated in a separate survey. To be estimated in a separate survey on silk yarn sourcing Baseline not required activityspecific indicator Baseline not required activityspecific indicator 18

ANNEX I: COMPANY SURVEY QUESTIONNAIRE This is survey undertaken by the International Trade Centre (ITC) aiming to assess the production and export capacities of selected Cambodian Silk Companies. The information you give will be processed anonymously and NOT be used for taxation or other official purposes. Please fill in one questionnaire only for each company. Questionnaire n Date (day/month/year):.. / /.. Interviewer s name and Function title:..... Company s name:.... A. Company s general information CAMBODIA S COMPANIES ASSESSMENT TOOL -Silk companies- LOCATION AND CONTACTS Address Street PO BOX Postal Code and City Landline telephone number Mobile telephone number Fax number e-mail address Website address Owner/ CEO Contact Person (if different) Year of foundation Is your company registered? Legal status of company Do you sell products other than silk products? Proportion of business in silk among the whole business Percentage of sales of silk products in domestic sales and export sales Do you have an export license? Is your company registered / engaged with.. Not registered Registered as a commercial entity Other (Explain) Shareholding company with shares trade in the stock market Shareholding company with non-traded shares or shares traded privately Sole proprietorship man woman Partnership Limited partnership Other. Specify Yes Type of products (e.g. cotton products): No Domestic sales: Yes/No Export sales: Export promotion agency / buying agents Chamber of commerce Specify : Business Association Specify Other Specify 19

Number of employees (total) Number of employees in managerial positions Number of employees in administrative positions Number of employees in sales Number of employees in marketing Number of employees in production Number of employees in other positions (specify) B. Company s economic background EMPLOYEES Men: Women: Men: Women: : Men: Women: Men: Women: Men: Women: Men: Women: Men: Women: GENERAL ECONOMIC FEATURES Do you have a business plan? Could you provide the annual sales figures for the last completed 3 years (2009-2010-2011) (US dollars). If not available could you provide an average of the last three years? Yes/No 2009 2010 2011 Could you provide an estimate of 2012 sales figures? 2009 2010 2011 Personnel staff salary): (e.g. Personnel staff salary): (e.g. Personnel staff salary): (e.g. Could you provide the annual expenses for the last completed 3 years (2009-2010-2011) (US dollars). If not available could you provide an average of the last three years? (If possible ask for financial statement) Raw materials and intermediate materials: Production (e.g. rent, equipment etc.): Packaging: Raw materials and intermediate materials: Production (e.g. rent, equipment etc.): Packaging: Raw materials and intermediate materials: Production (e.g. rent, equipment etc.): Packaging: Marketing (e.g. website, fair participation, advertisement etc.) Marketing (e.g. website, fair participation, advertisement etc.) Marketing (e.g. website, fair participation, advertisement etc.) Others / Misc: Others / Misc: Others / Misc: Could you provide an estimate of 2012 expenses? Do you have subsidiary/satellite offices? Where? Personnel (e.g. staff salary) Raw materials and intermediate materials: Production (e.g. rent, equipment etc.): Packaging: Marketing (e.g. website, fair participation, advertisement etc.): Others / Misc: Yes 20

No Have you ever received a line of credit or loan from a bank for your business Yes/No C. Company s Core Activity Do you buy inputs (silk yarn or silk fabric/items) per order or do you keep a stock? What is your average stock value (US dollars)? What is your storage capacity (square meters)? Is your company involved in weaving process including commissioning silk fabric/items? Per order Stock Yes/No If yes, please start from Part 1. If no, please skip Part 1 and start from Part 2. Part 1 Sourcing silk yarn, Weaving and Dyeing Which kind of silk yarn do you use? And where is it from? Cost / kg of silk yarn (US dollars)? Fine Silk PRODUCTION China Vietnam Thailand Domestic: Other (specify) Rough Silk China Vietnam Thailand Domestic: Fine Silk Rough Silk Other (specify) CGS/Domestic Yarn: Imported Yarn (China): Imported Yarn (Vietnam): CGS/Domestic Yarn: Imported Yarn (China): Imported Yarn (Vietnam): Local Market Village middlemen Traders Local Market Village middlemen Traders Quantity of silk yarn needed per month (kg)? How many times per year do you purchase silk yarn? Do you purchase silk yarn from the same suppliers? % of silk yarn imported for which you have a certificate of origin Is your company employing weavers on a permanent basis (with a monthly salary) or are they sub- Fine Silk Rough Silk CGS/Domestic Yarn: Imported Yarn (China): Imported Yarn (Vietnam): CGS/Domestic Yarn: Imported Yarn (China): Imported Yarn (Vietnam): 1 or less 2 to 5 6 to 10 More than 10 Yes No No. of Fixed tem (male/female): No. of Subcontracted (male/female): 21

contracted on an ad hoc basis? Where are the employed/subcontracted weavers located (Province/community)? Please specify what type of products they are producing. If applicable, which weaving communities are manufacturing silk products for the export market? Please provide the number of weavers involved. How do you subcontract weavers? How are the subcontracted weavers paid and how much? Do you provide production material (e.g. silk yarn, dyestuff) to the subcontracted weavers? How many purchases do you make per year? Do you normally subcontract the same weavers/weaving communities? Which type of equipment do the weavers use? Do you provide technical assistance/training to the employed and subcontracted weavers? Location Weaving communities Verbally Formal (written) contract Per hour Per output/piece Yes/No 1 2 to 5 6 to 10 More than 10 Yes No Automatic loom Semi-Automatic loom Hand Loom Employed weavers Yes/No Type: Silk products produced Number of weavers involved US Dollars per day US Dollars per piece (specify) Subcontracted weavers Yes/No Type: Do the weavers you work with receive technical assistance from outside? If yes, by whom? Local authorities NGOs International organizations TSIs Other (specify) Thai dye Local Market Direct Imports Traders/Middlemen What type of dyestuff do you use and where is it sourced from? Natural dye Local Market Imported Cooperatives Other Quantity of dyestuff needed per month (kg)? Cost of dyestuff per month (US dollars)? Do you purchase other production inputs? (please specify and indicate source, quantity and costs for every German dye (azo-free) Local Market Imported Traders Other Thai dye: Natural dye: German dye (azo-free):- Thai dye: Natural dye: German dye (azo-free) Type: Where do you source it from: Local Market Imported 22

additional input required) Cooperatives Traders Quantity needed per month (kg): Cost / month (US dollars) Part 2 Sourcing silk fabric/items (intermediate materials) Quantity of silk fabric/items needed per month Cost of silk fabric/items (USD) Sources of silk fabric/items Is your company employing suppliers on a permanent basis (with a monthly salary) or are they sub-contracted on an ad hoc basis? How do you subcontract the suppliers? How are the subcontracted suppliers paid? Part 3 Processing What s your production output (silk only) per month? (number of items/square meters) Which kind of processing activity for silk products is your company involved with? Fine silk fabric meters Rough silk fabric meters Silk scarves pcs Silk Sarong, Hol Kben/pcs Other (specify) Other (specify) Fine silk fabric USD/m Rough silk fabric USD/m Silk scarves USD/pcs Silk Sarong, Hol USD/Kben/pcs Other (specify) Other (specify) Local Market Village middlemen Imported Specify Traders Other No of Fixed tem (male/female): No of Subcontracted (male/female): Verbally Formal (written) contract Per output/piece US Dollars per piece (specify) Other (specify): Scarves Fabric Clothing (specify) Ties Cushions Bed linen Blanket Shawl Other (specify) Other (specify) Other (specify) Weaving Spinning Dyeing Second Dye process (e.g. tie dye) Sewing Stitching Finishing / Washing / Ironing Labelling Packaging Other (specify) Number of items Size (m 2 ) Description if necessary 23

What s your production lead time - from buyer request to first sample (number of days)? Who is responsible for the development of new design of products/collections? Is your company employing tailors/silk screen printers/embroidery makers on a permanent basis (with a monthly salary) or are they subcontracted on an ad hoc basis? Where are the employed/subcontracted tailors/ silk screen printers/embroidery makers located (Province/community)? How do you subcontract the above mentioned-subcontractors? How are the subcontractors paid? How many orders do you make per year? Do you normally subcontract the same subcontractors? Do you provide technical assistance/training to the subcontractors? Scarves Fabric Clothing (specify) Ties Cushions Bed linen Blanket Shawl Other (specify) Other (specify) Other (specify) Company owner In-company designer Contracted designer Commissioned by buyer Other (specify) No of Fixed tem (male/female) Tailors Silk screen printers Embroidery makers Other (Specify) Tailors Silk screen printers Embroidery makers Other (Specify) Verbally Formal (written) contract Per hour Per output/piece 1 2 to 5 6 to 10 More than 10 Yes No Yes/No Type: No of Subcontracted (male/female) Location US Dollars per day US Dollars per piece (specify) Do you have a quality management system? How do you improve your products' quality? Are you Member of a certification programme, labelling scheme? If yes, what is the certification programme name (ISO, brand, QUALITY MANAGEMENT Yes At weaver community level At middleman/trader/supplier level At company level Other (specify) No Training Payroll deduction from weaver/producers/suppliers on rejected pieces Reject / no pay system Other (specify) Yes/No 24

label )? Do you apply some form of environmental protection? If yes, how? Yes At weaver community level At middleman/trader/supplier level At production level Other (specify) No Do you have a marketing strategy? And what is your strategy? Do you have a company website? How often do you update your website? Are you using social media for your corporate marketing? (eg. Facebook, Twitter ) What sort of marketing channels are you using? Which kind of packaging do you use to sell in domestic markets? (specify) Which kind of packaging do you use for exports? (specify) Where do you get the packaging material from? Have you ever participated in trade fairs? MARKETING/PACKAGING Yes/No Strategy: Yes/No Every week Every Month Every 2-3 months Once a year Never Yes Specify: No Product catalogue Website Fairs Newsletters Newspaper adds Local Market Village middlemen Imported Traders Other Yes With own funds? Partially sponsored? Fully sponsored? No If yes, which fair and when(year)? Ambiente (Frankfurt) : Tendence (Frankfurt) : Maison Objet (Paris) : Heimtextil (Frankfurt) : Lifestyle Vietnam (Ha Noi)/Ho Chi Minh: Hong Kong Gifts and Premium Fairs (Hong Kong) : New York International Gift Fair: Other (specify): Other (specify): Other (specify): Other (specify): 25

SALES Are you exporting silk products? Yes/no Do you have an export strategy If yes, how did you select your target export markets (e.g. detailed market analysis, personal contacts ) Could you provide the annual sales figures from silk products only (if not possible, overall sales figures) for the last completed 3 years (2009-2010-2011) according to market segmentation? If not available, could you provide an average of the last three years? Yes/no 2009 Domestic sales (US dollars): Sales to tourists (US Dollars): 2010 Domestic sales (US dollars): Sales to tourists (US Dollars): 2011 Domestic sales (US dollars): Sales to tourists (US Dollars): Could you provide an estimate of 2012 sales figures from silk products only (if not possible, overall sales figures) according to market segmentation? Could you provide the annual gross profit margin from sales of silk products only (if not possible, from overall sales) for the last completed 3 years (2009-2010-2011) according to market segmentation? If not available, could you provide an average of the last three years? Cross-border (US dollars): Exports Cross-border (US dollars): Domestic sales (US dollars): Sales to tourists (US Dollars): Exports Cross-border Exports (US dollars): 2009 2010 Domestic sales (US Domestic sales (US dollars): dollars): Sales to tourists (US Dollars): Sales to tourists (US Dollars): Cross-border (US dollars): Exports 2011 Domestic sales (US dollars): Sales to tourists (US Dollars): Cross-border (US dollars): Exports Cross-border (US dollars): Exports Cross-border (US dollars): Exports Could you provide an estimate of 2012 gross profit margin from sales of silk products only (if not possible, from overall sales) according to market segmentation? Domestic sales (US dollars): Sales to tourists (US Dollars): Cross-border Exports (US dollars): 26

Could you provide the percentage of the sales of silk products (if not possible, total sales) for the last completed 3 years (2009-2010- 2011) (US dollars) to each export market? 2009 Europe (specify) USA 2010 Europe (specify) USA 2011 Europe (specify) USA Australia Australia Australia Canada Canada Canada Japan : Japan : Japan : Korea Korea Korea Other Asia Other Asia Other Asia Other markets : Other markets : Other markets : Could you provide an estimate of the sales of silk products (if not possible, total sales) for 2012 (US dollars) to each export market? What are your main export silk products for these markets and which are the main export markets? Europe (specify) : USA : Australia Canada Japan : Korea: Other Asia : Other markets : Scarves Fabric Clothing Ties Cushions Bed linen Blanket Shawl Other (specify) No. of collections being exported under this category (where possible, please specify the collections) Main markets export 27

Do you have an outlet for direct sales? Where? How do you get orders from international buyers (not tourism)? If using e-sales, how much sales of silk products are there per year? total (US dollars) How do you export your products? How many international orders do you receive per year? Number of international buyers you work with? To how many buyers do you sell repeatedly? How many times per year? Could you provide the proportion of silk product samples rejected by buyers with respect to compliance with quality requirements? If you are not exporting yet, would you like to do so? Why? What are your main outlets to sell your silk products to tourists? Other (specify) Other (specify) Yes Same location as company Elsewhere (specify) No Through intermediaries: Specify E-commerce (website) Trade fairs Buyer visits (in shop for example) Others Officially through customs Air with Couriers (TNT, DHL, other logistic Air with Postal office Pick up from your showroom/office Other (specify) Yes/No Why: Company Shop/Showroom Hotel outlets Domestic Tourism Markets Airports Other D. Technical Assistance Which are the main problems you face in the daily work/bottlenecks? (Explain) Lack of finance Relations with weavers Production equipment Supply material Design Costing and Pricing Logistics Marketing and sales Communication with buyers (English skills) Finding buyers Packaging High Expenses Quality management Bureaucracy Other (specify) Explain: 28

Have you already received any technical assistance? What type of technical assistance have you received? Who provided technical assistance? (please also indicate the duration) Were you satisfied with the technical assistance? Explain What type of technical assistance do you consider most important to expand your business. Prioritize with a scale from 1 to 3. (1=most priority; 2=average; 3=least needed) Yes/No Sourcing of inputs (Prod Materials and labor source) Design Identification of new markets and buyers Marketing and sales Trade fair participation where: when: Costing and Pricing Packaging Quality management Production techniques Other (specify) Local authorities NGOs Crafts Associations International organizations TSIs Other (specify) Yes/No Explain: Sourcing of inputs (Prod Materials and labor source) Design Identification of new markets and buyers Marketing and sales Costing and Pricing Packaging Quality management Production techniques Supply Management (including imports of silk yarn and other factors of production) Other (specify) 1 2 3 Would you be interested in participating in trade fairs, missions at your own costs or shared costs? What type of business partnership with other silk companies are you interested in? Do you have any further information you wish to share? Yes At your own costs At shared costs No None Joint sourcing (imports of raw material) Joint distribution Complementary production Concerted marketing promotion Development of new products design Other (specify) THANK YOU for your collaboration! 29

Ms. Sylvie Bétemps Cochin Trade Promotion Officer Office for Asia and the Pacific Geneva, Switzerland Email: betemps@intracen.org Mr. Pheanuroth Sisowath, Project Coordinator Project Coordination Unit Phnom Penh, Cambodia Email: sisowathp@gmail.com International Trade Centre Palais des Nations, CH-1211, Geneva 10, Switzerland H.E. Mr. Pan Sorasak Secretary of State and EIF Focal Point Email: great.lake.kh@gmail.com Mr. Suon Prasith EIF Program Manager Department of International Cooperation (DICO) Email: prasithsuon@gmail.com Ministry of Commerce Lot 19-61, MoC Road (113B), Phum Teuk Thla, Sangkat Teuk Thla, Khan Sen Sok Phnom Penh Kingdom of Cambodia http://www.cambodiansilksector.org 30