Keeping Social Enterprises Alive During Covid

Social entrepreneur Vannary San has refused to let the challenges Covid-19 threw her way get in the way of her growing her portfolio of businesses
Social entrepreneur Vannary San poses for picture. Kiripost/Siv Channa
Social entrepreneur Vannary San poses for picture. Kiripost/Siv Channa

Award-winning social entrepreneur Vannary San has spent her life battling adversity. Born in a small village in the rural province of Kampong Chhnang, life was tough for young Vannary. Poverty plagued the family and as a female, studying in Phnom Penh and finding a career that would help develop her country was nothing more than a pipedream.

However, in 1997 Vannary convinced her parents to let her relocate to the capital to study business management and English at university. She went on to secure work at an NGO and her drive to bring about social change led her to launch social enterprise Lotus Silk in 2003. Her ultimate aim was to help revive Cambodia’s silk weaving heritage while providing a sustainable form of income for underprivileged communities.

She quickly grew the business to work with 22 communities and producers countrywide. This includes organic cotton growers in Battambang, weavers in Prey Veng and Takao, and dyeing experts in Kandal. Together, they produce a range of eco-friendly products, such as clothing made from Cambodian golden silk, jewellery, accessories and scarves.

Her success led to her scooping an accolade of awards, including Women’s Creativity in Rural Life, outstanding woman entrepreneur of ASEAN, and Top 5 Designer of the Year by the Modern Ethnic Design Centre.

Driven by her compassion for her compatriots, in July 2019, she went a step further and opened Silk House on the outskirts of Phnom Penh. The aim of the interactive and educational museum was to teach visitors about Cambodia’s ancient craft of silk weaving, from fattening up silk worms with mulberry leaves, to creating soft silk scarves and other intricately-designed items.

“Everything was going so well,” Vannary said. “We had a contract with a big international tour operator and received funding from JICA (Japan International Cooperation Agency). Then Covid happened and everything was suddenly cancelled.”

Vannary was forced to close the museum but was able to keep the workshop open. However, she had to let two weavers and one woman who bred silk worms go as part of a raft of desperate cost-saving measures.

“We had to change our business model,” Vannary recalls. “We stopped doing fashion and bags and changed to face masks and home décor. I was very lucky as I had a lot of support from expats, and my NGO and Khmer friends, so while I didn’t make any profit, I was able to make enough money to cover operations and pay staff.”

Vannary’s other business, House Boutique Eco Hotel close to Phsar Boeng Keng Kang in the capital, also hit hard times. Vannary does not own the land the hotel sits on and during the pandemic, the landlord refused to lower the rent despite no guests.

“We changed our strategy a bit and moved to focus on long-stay guests but it was so hard. It got to the 2021 lockdown and we decided we can’t do this any more,” said Vannary. She sought legal help and managed to receive a six-month discount on the rent. However, this has to be paid off during the next 12 months, pushing up her monthly rent to $4,600.

“This is such a worry,” she said. “Even though tourists are coming back and the hotel is nearly full, it’s a huge pressure on our shoulders every month. As well, there have been a lot of challenges for reopening.”

Journalist Marissa Carruthers speaks with social entrepreneur Vannary San. Kiripost/Siv Channa
Journalist Marissa Carruthers speaks with social entrepreneur Vannary San. Kiripost/Siv Channa

Vannary was dealt a small lifeline in 2021 in the form of a low interest SME loan provided by the government.

In addition to financial pressures, to keep the business afloat, Vannary had to make heavy investments in building maintenance to bring the property back up to scratch after almost two years of little use. Furniture and linen also had to be replaced. However, the biggest challenge was finding staff.

“After Covid, it’s been difficult to find people in the tourist sector,” she said. “They were disappointed when it closed and have already moved to other jobs and don’t want to come back. This has been really difficult.”

Vannary has had to pump a lot of time, energy and money into finding and training staff, who mostly come from Siem Reap. At the hotel, she currently employs 14 full-time staff and three part-time employees and consultants.

Despite the challenges the pandemic has thrown her way, Vannary remains undeterred and is ploughing ahead with her next project, an eco-village in Kampot. Built on land on the outskirts of Kampot town that her family bought five years ago, it will comprise a camp site for up to 50 tents and 11 bungalows.

“I’ve learned a lot from Covid,” she said. “I learned that it’s very high-risk as a social business and sustainable hotel that doesn’t make much profit to rent someone’s land. If something unexpected happens, you have no control over the business and it can collapse, so the Kampot eco-village will be on our own property.”

In addition, Vannary has flipped her operating model. Prior to Covid, 80 percent of her business was geared towards international tourists and only the remainder on Cambodians and expats. “We now know we can’t be too reliant on international tourists, so we’re making a big switch for our strategy in Kampot and only targeting 30 percent on outside tourists and the rest on the domestic market.”

Hoping to provide a sustainable model of tourism that can be replicated nationwide, Kampot Eco-Village has been constructed using locally-sourced materials, such as reclaimed wood, dainty Khmer tiles, and eco bricks from My Dream Homes, a Cambodian start-up that creates environmentally-friendly bricks.

The site is plastic free, electricity is provided by solar panels, and Vannary plans to install a water treatment system to recycle black and grey water. The camping is slated to open by mid-November, with the bungalows opening early next year.

Despite the hurdles the pandemic presented her silk fashion work, Vannary continues to experiment with sustainable textiles, working closely with communities to produce natural fibres from lotus flowers, banana plants and golden silk.

Vannary San poses for picture. Kiripost/Siv Channa
Vannary San poses for picture. Kiripost/Siv Channa

Lotus Silk is also one of 12 Cambodian SMEs in the handicraft and textiles sector to take part in the CBI project, the Centre for the Promotion of Imports from developing countries to Europe. In partnership with Khmer Enterprise, the selected companies have received expert training in exporting to Europe. In January, Vannary will join the second cohort of Cambodian companies at a huge trade fair in Paris.

As part of her commitment, she must design a new sustainable fashion line to showcase at the event. This month, two leading fashion designers will visit Cambodia from France to spend two weeks helping Vannary develop her collection.

“This is so exciting,” she said. “They have worked with many famous designers, such as Dior and Hermès. They will come and work with me and visit the communities we work with. It’s an amazing opportunity. While the last two years have been challenging in ways we could never have imagined, we’ve carried on, and will always carry on.”