Inside Business: Shoemaker tries to keep apace amid slump

Photo by: SOEUN SAY
Workers make shoes at Ay Sisovann's factory.

http://www.phnompenhpost.com/

Written by Soeun Say
Wednesday, 10 June 2009

A DECADE ago, when Ay Sisovann learned the art of shoemaking from his father, he saw a local market niche ready to be filled. Starting out with untried knowledge and US$100,000 in savings, Ay Sisovann, 42, is now the director of Toul Sleng Shoemakers, a flourishing business he has built from the ground up since 1998.

"I left my family when I got married, and I thought that to make a business out of shoemaking would be a good opportunity," he told the Post. "So I kept my eyes on making shoes and invested over $100,000 in raw materials, a cutting machine and other equipment."

Ay Sisovann's first factory opened in 1998 with five employees to sew shoes and package the finished products. Initially, Ay Sisovann said he tried to hire the best craftsmen in the field, with three workers operating the cutting machinery, while two more were employed to sew and two to glue hand-stitched shoes made from alligator skin, snake skin, and cow and buffalo leather. At the company's small factory in Phnom Penh's Boeung Keng Kang III district, the sounds of weaving machines roar incessantly as the staff - now expanded to a dozen workers - pack hand-made shoes into plastic bags.

Today, Toul Sleng Shoemakers produces between 30 and 40 pairs daily for clients from Phnom Penh, Battambang, Siem Reap, Pursat, Preah Sihanouk and Kampong Cham provinces.

"Most of my clients are government officers, students, NGO staff and foreigners," he said.

Priced at $27 to $35 a pair, Ay Sisovann said that his shoes are a good quality product at a price that suits low-income customers, as well as allowing Cambodians to buy Kingdom-made shoes - a relative rarity in a global market flooded with mass-produced Chinese, Thai and Vietnamese products.

"We are Khmer so we must use something made by Khmer people. In order to help Cambodian products grow, we must use local products," he said. "I have bought good quality samples from Vietnam so that I can copy them."

He added that the company can produce show styles similar to those from Italy, Thailand, China and America.

But as with many businessmen, the world financial crisis has hit Ay Sisovann's business hard, cutting 40 or 50 percent from his bottom line since the same time last year.

"In 2007-2008, my business ran smoothly. I earned $400 per day, but now I earn between $100 and $200," he said.

A key challenge, he added, was competing with cheap imported shoes, which are flooding markets and malls and undercutting local demand for handmade shoes made mostly from imported materials.

"Cambodia cannot compete with Thailand, Vietnam and China for raw materials. Some 85 percent of our raw materials are imported from other countries, and prices have been on the rise since 2006," he said.

Another challenge is that the local industry became crowded at the same time as the financial crisis began to pinch.

"The number of shoemakers is increasing by the day, while Vietnamese and Chinese shoes are selling in the local markets at low prices," he said.

Although he says he has lost the chance to bring his products to overseas markets - Ay Sisovann says he lacks the capital to produce the minimum 3,000 pairs per month required to supply US wholesalers - he says he hopes to use proceeds to expand production.

"When I have enough capital from selling my land, I will increase production over the next two years," he said.