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INDIGO TEXTILES BAAN KUD HAAD, GUD BAK,

SAKON NAKHON

January 17, 2012

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Introduction

• From Cornell University and KMUTT, we are a team of students and faculty from diverse disciplines, including business, economics, engineering, textile, and public administration.

• The program is designed to help small businesses, to bridge the gap between learning and doing, and to publish academic case studies.

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• Community comprised of 7

villages with 3 business lines:

indigo textiles, frog domestication,

and bamboo weaving

• The indigo textiles group of 52

women are from 4 villages

• Uses all natural cotton and indigo

• Employs traditional Ka-Leung

dyeing and weaving techniques to

make unique handmade textiles

• Does not use chemical pesticides

or fertilizers

Kud Haad Indigo Textiles Community

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• Interviewed 18 households in the Kud-Haad community to understand their management and production processes

• Visited plots of cotton and indigo plants

• Met with the vice provincial governor of Sakon Nakhon

• Met with executive of Bank of Agriculture and Agricultural Co-operatives

• Visited 3 sales and distribution centers of indigo dyed cotton

• Visited 4 competitors

Our Approach

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How do we increase value of indigo textiles of Kud-Haad community internally and externally?

• Improve Business Operations

• Increase Marketing Exposure

• Improve Quality & Efficiencies

Our Objectives

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• 100% natural cotton

• Grow their own indigo and their own cotton (supplement with outside raw materials)—potential for strong oversight

• Have some dyeing and weaving experts within community

• Pooled resources

• Interested in learning how to improve the product

Strengths

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Weaknesses

• Management and organization structure does not support community needs

• Lack of communication

• Inconsistent quality

• Limited marketing

• Limited design offerings

• Inefficiencies in agricultural & textile production methods

• Unknown output capacity for the community

• Younger generations do not want to work in business

• Weak governmental relations

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Purchased Yarn External Dyeing service

Include Labor Wage Profit per m2

100% 100% Not include 10 Baht

100% 0% Not include 160 Baht

100% 0% Include as 300 Baht per day

10 Baht

Scenario I : Factory yarn cost calculation

Based on following assumptions •Produce the plain cloth width 1m. with sale price @ 250 Baht per sq. meter •Purchased handmade factory yarn cost 180 baht per kg. •Production process need 2 kg. of Factory yarn for 4 m2 of plain cloth •Production capacity is 2 sq. meter per day

Cost Analysis

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Purchased Yarn External Dyeing service

Include Labor Wage Profit per m2

100% 100% Not include -250 Baht

75% 100% Not include -175 Baht

50% 100% Not include -100 Baht

25% 100% Not include -25 Baht

0% 100% Not include 50 Baht

0% 0% Not include 350 Baht

0% 0% Include as 300 Baht per day

200 Baht

Scenario II : Handmade yarn cost calculation

• Based on following assumptions • Produce the plain cloth width 1m. with sale price @ 350 Baht per sq.m. • Purchased Handmade Natural yarn cost 300 baht per kg. • Production process need 2 kg. of Factory yarn for 2 m2 of plain cloth. • Production capacity is 2m2 per day

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• Certifications from reputable organizations • National and International Festivals • Distribution in domestic and international

markets • Training to improve product quality • Training to improve agricultural methods • Training in management • Diversify product lines • Outsource marketing • KU and SNRU research capabilities • Waste water management • Financial Support

Opportunities

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• Environmental degradation • Price volatility of raw materials • Competition from other communities

in Sakon Nakhon and international producers

• Uncertain demand • Weather risk • Higher incomes in urban areas

Threats

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Kud Haad

Samakkee pattana

Heun Mor nin

Don Goi

Tum Tao

OTOP X 5 star 5 star 5 star ?

G Production X P P ? P

Exporting X P P P P

Unique pattern ? P ? P P

Packaging X P P P P

Trade mark X X P P X

Competitive Analysis

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Short-Term Solutions (0 – 1 year) Solutions Potential Partners

Improve Business Operations

Increase Marketing Exposure

• Record and analyze raw material usage

•Organize training programs for members by partnering with external organizations

• Create a guide to production process

•Set up loom more efficiently to reduce labor hours required for production

•Develop a brand logo and labels

•Create packaging design and an informational pamphlet

• Identify buyers in Sakhon Nakon

• BEDO

• Thai Weaving Industry

• Department of Cultural Promotion

• KUCSC, Faculty of Liberal Arts and Management Science

Improve Quality

• Establish quality standards for finished products

• Improve quality and get OTOP 3-star rating

• Obtain Thai Industry Standard Institute (TISI) certification

• Develop new patterns

•Thai Industrial Standards Institute

•Department of Environmental Quality

•The Office of Community Development, Sakon Nakhon Province

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Medium-Term Solutions (2 – 5 years) Solutions Potential Partners

Improve Business Operations

Increase Marketing Exposure

Improve Quality

•Research methods to treat waste water

•Transfer production knowledge to the new generation

• Utilize standard accounting in their transactions

• Change the legal status from community enterprise to cooperative

•Pursue business partnerships

• Create a website

• Showcase products at festivals

• Earn 5-star rating from OTOP

• Improve raw material management

• Instate a quality control system for raw materials to maintain consistency

• KUCSC

•Sakon Nakhon Rajaphat University

•Thai Industrial Standards Institute

•Department of Agricultural Extension

•KUCSC, Faculty of Liberal Arts and Management Science

•Department of Local Administration, OTOP

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Long-Term Solutions (6 + years) Solutions Potential Partners

Improve Business Operations

Increase Marketing Exposure

Improve Quality

•Community center should pay members for products up-front to encourage members to sell their high-quality products to the community center

• Identify a partner to help source raw materials

• Operate business self-sufficiently

•Find a distributor to sell the product internationally

• Achieve green production certification

• Diversify product line (e.g. bags)

• Identify a partner to help source raw materials

•Bring in an expert to teach production to increase quality.

•KUCSC

•Sakon Nakhon Rajaphat University

•Thai Industrial Standards Institute

•Department of Agricultural Extension

•KUCSC

•Faculty of Liberal Arts and Management Science

•Department of Local Administration, OTOP

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• SMART team to incorporate feedback from the community and provide comprehensive implementation plan

• Community to begin implementing short term initiatives

• BEDO to begin facilitating short term initiatives

Next steps

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ขอบคุณคะ่/ครบั and Thank You!