Vietsilk Salvaging Bao Loc Sericulture Industry

Visintex Textile Company, a joint venture between the Vietnam Sericulture Corporation (Viseri) and a Japanese private company, went bankrupt after its operational lifespan reached 20 years and its distrait assets were put up for public auction to implement the verdict declared by the Supreme People's Court to both partners. Witnessing this situation, Mr Nguyen Tien Dung, CEO of Vietsilk Co., Ltd, who had worked in the sericulture industry for long, felt very sorry for the fading of this industry. He and some former colleagues at Viseri pooled money to acquire the entire assets from Visintex Textile Company and set up Vietsilk Co., Ltd.

 

After buying the factory, thanks to good networking of the Board of Directors, Vietsilk worked with some foreign clients. Especially, when tensions at Diaoyudao Islands (Senkaku Islands) escalated, many Japanese companies, which previously collaborated with China, began redirecting their business cooperation contracts to Vietnam. Japanese partners invested 37 looms and spare parts in Vietsilk. The company also overhauled 40 old JQ looms, previously owned by Visintex Joint Venture Company.

 

Vietsilk Co., Ltd was established in February 2012 and all 77 looms (40 old ones and 37 new ones) were put into operation in early 2013. The products met Japanese import standards. Since then, the silk made by Vietsilk affirmed the Bao Loc silk brand in the Japanese market. The company also produced silk for Uncle Ho’s clothes and the product was highly appreciated by the Management Board of President Ho Chi Minh Mausoleum.

 

Starting from the facilities of a bankrupt company, Vietsilk gradually made a profit and saw a rising annual revenue. The company earned VND86 billion of revenue in 2013 and VND100 billion in the first 10 months of 2014. Its 150 employees are now paid VND4.5-6.5 million a month on average.

 

Reviving a falling industry is not simple. According to CEO Nguyen Tien Dung, in reality, Lam Dong province has enough conditions to turn out Chinese quality-equivalent cocoons but the sericulture was unable to thrive because mechanism slowed the development of key economic sectors in Lam Dong province. The second difficulty is that, many years ago, two high-yield mulberry varieties researched, hybridised and selected by the Lam Dong Agriculture and Forestry Application Research Centre were unable to be brought into production because of the steep decline of the sericulture industry. However, from late 2012 to present, the above two mulberry varieties have really become the desire of sericulturists in Lam Dong. And, the third difficulty is the decrease of skilful and knowledgeable workers in sericulture industry in Lam Dong. “The above difficulties and challenges are also our motivations to revitalise the sericulture industry," said Nguyen Tien Dung.

 

With his confidence, CEO Dung asked handmade silk production facilities to upgrade technologies and provided them with funds for that purpose to raise the quality of silk. In 2013 and early 2014, ten lines of automatic reeling machines purchased from Viseri were reactivated. Besides, to have high-quality cocoons, the company encouraged farmers to grow high-yield, disease-resistant mulberries because they only needed a quarter of mulberry areas in the 1985 - 1990 period to have the biggest cocoon output in the prime time of sericulture industry. This was also the foundation for the Lam Dong Agriculture and Forestry Application Research Centre to bring the two varieties to mass production.

 

So far, though the mulberry area is small, cocoon and silk production output in the province is not inferior to its past heyday. In 2014, Lam Dong province expects to produce 450 tonnes of silk. "The presence and the effort of Vietsilk have changed the face of the sericulture industry in Bao Loc,” said Le Hoang Phung, Secretary of the Bao Loc City Party Committee.

 

The commercial reputation of Vietnamese silk is not high on the market. "Many partners previously expected Vietnamese silk to be inferior,” said CEO Nguyen Tien Dung.

 

Hence, Vietsilk has to seek measures to improve quality to assert the name of Vietnamese silk in the world market. To be eligible for export to such demanding markets as Japan, the company must meet three criteria: Input quality, production line and workmanship.

 

Regarding input quality, in addition to imported materials, Vietsilk has built up cooperation to have the synchrony from mulberry growing and raising silkworms to automatic reeling machines to improve the input quality. Concerning product quality, Vietsilk imported 37 new looms and spare parts to restore 40 old looms in 2012 and 2014. The final requirement is human resources. Vietsilk has invited Japanese experts to train its 120 employees of spinning, weaving and KCS since 2013. The firm has also sent its employees to Japan to acquire new know-how.

 

CEO Nguyen Tien Dung always puts the common objectives of the industry and the interests of the nation on top. He said Vietsilk will endeavour to build up the brand name of Bao Loc silk. “In addition to Japanese market, we will approach neighbouring markets to boost sales,” he added.