No silver lining yet as crisis bites handicraft maker

Wednesday, July 15, 2009

SILVERSMITH Ros Chanthou learned his craft as a youngster from his father. But it was in 1990, once he had married, that he decided to set up his own business: Sothea Khmer Silver Crafts.

In the early days, he had four craftsmen who made almost all the products by hand on the premises in Phnom Penh's Daun Penh district. Now he employs 10 artisans, who earn US$80-$100 a month depending on their skill.

Ros Chanthou would not be drawn on his business's revenue, saying only that custom began well and kept improving through the years. But like many businesses, Sothea Khmer Silver Crafts has recently been affected by the global economic crisis.

"My business ran very well in 2007 and 2008, but when the crisis started to bite, my business dropped about 70 percent," he said.

The decline in business is easily seen in his reduced orders for the raw material. Until a year ago he bought 100 to 120 kilograms of silver a month. Now he needs between 10 and 30 kilograms.

The only bright spot in the current economic gloom is that the price of silver, which he sources from Malaysia, China and Singapore, is lower. Ros Chanthou said that it costs him $450 per kilogram today, down from $600 per kilogram last year.

"Because the raw material is cheap, this ought to be a good opportunity for business," he says. "But how can we if we cannot sell the end product?"

He says conditions mean some of his competitors are facing bankruptcy.


"Bankruptcy is not something I am concerned with since we have built good relationships with our clients - they know our quality, and they trust our products," he says.

So who are his clients? They vary, says Ros Chanthou. Local purchasers include foreign embassy staff, government officials and NGO workers. And until the drop in tourism hit home, tour groups were a good earner, too.

"Some senior government officials have bought my silver products to use at home, such as spoons, glasses and plates. And some buy them to display at home," he says.

Sothea Khmer Silver Crafts has also sent work overseas and competes with producers in Thailand and Vietnam. But in the past year, the economic problems mean the Thai market has dried up.

And although he maintains that Cambodian silverwork can compete with that done in Thailand, China and Vietnam, he acknowledges that imports from those countries are proving stiff competition here.

"Many market vendors are displaying goods sourced from outside Cambodia, including from countries such as Vietnam, Thailand and China. We do find it hard to compete with all of them," he says.

When asked about the future, he says the global crisis means he has had to put on hold his plans to boost overseas sales.
"I planned to expand this year, but I can't because I would have lost money," he says.

In the meantime Ros Chanthou says the government ought to do more to help small and medium enterprises (SMEs) such as his. He wants lower tax rates and says the government could help businesses learn how to export their products.

"The other thing is interest rates. I borrowed money from the bank to invest in my business, but rates are too high," he says. "I would like the government to help bring down those rates to give SMEs a chance to stay in business."


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