Sustainable Silk Production Partnership (SSPP)

Lao PDR has a successful hand-woven silk textiles sector that reflects the strong tradition of weaving, and positions Lao products uniquely in the global marketplace. Lao firms successfully export to various premium international markets. However, it is estimated that 80-90% of silk yarn in Lao textiles is sourced from Vietnam, China or Thailand.

International demand for Lao textiles is strong but the bulk of production focuses on the lower end of the market, partly due to an inadequate supply of local, high quality silk yarn at an affordable price. Almost any quantity of local silk yarn produced can be sold. Greater production of the basic raw material for this industry will increase its capacity to produce more for the export market. Lao silk weavers find it increasingly difficult to market their products as "Lao" when the raw material is imported. Thus, there is a strong economic incentive to produce 100% Lao silk products using locally produced silk yarn. Key constraints to additional silk export production are related to the supply of good quality silk yarn. The production of more yarn is constrained at the farm level, and requires: cost-effective investment in modern systems of production; better knowledge of inputs at critical points in the value chain; and a supply of high quality eggs.

The Sustainable Silk Production Partnership (SSPP) project in Lao PDR is an innovative model that establishes silk production partnerships linking rural communities to markets, and therefore provides diversified income-generating opportunities to an estimated 1,200 disadvantaged households. The project supports lead firms who are textile and/or silk yarn producers working with farmers in sericulture. The project also assists these firms to provide the necessary inputs to increase silk yarn production, including subsided mulberry saplings, fencing, silkworm rearing shed materials and on-going sericulture training and support. Lead firms are carefully selected based on criteria such as capacity, social commitment, established market, fair trading relations with farmers, and reputation.

With SSPP project support, inclusive business and investment plans are developed in partnership with each lead firm to capture current operations, and opportunities for successful growth and expansion are identified. The plans outline the steps by which SSPP support will improve quality and productivity, and provide direct tangible benefits to the lead firms and their networks of farmers.

Silk represents a tiny percentage of the global textile fibre market but it is a premium agricultural commodity with a unit price roughly twenty times that of raw cotton. Lao domestic production of between 20 and 30 tons per annum compares with a total volume of 1,550 tons in Thailand and 12,000 tons in Vietnam. Given similar geographical and climatic conditions, the production potential in Lao PDR is significant and the SSPP project seeks to double Lao silk production from 30 tons to 60 tons within four years.

SNV provided technical assistance to the project, which was sponsored by the World Bank/Japan Social Development Fund and managed by the Lao PDR Ministry of Industry and Commerce. It operated in the provinces of Sekong, Houaphanh, Xieng Khouang, Bolikhamxay and Phongsali.