By NewTimes Rwanda
Farmers engaged in sericulture are in a difficult situation after the departure of a Korean company called HEworks Rwanda Silk Ltd, a company that had ventured into Rwanda’s silk sector.
Sericulture is the rearing of silkworms for the production of raw silk used in the textile industry. It involves the farming of mulberry trees on which silkworms feed to produce silk cocoons with filaments that are processed to make fabrics or cloths.
There are concerns among farmers that the current situation where there is no investor to manage the sector effectively and ensure sustainable and profitable market for them is precarious.
A partial view of the Kigali-based silk processing factory in 2019. It was constructed by the Government, but managed by the Korean firm — HEworks Rwanda Ltd. (courtesy)
“We are considering whether or not to uproot our mulberry plantations and stop rearing silkworms. We need assurance from concerned institutions about the sustainability of the sericulture sector,” said Florence Mutembayire, a farmer in Gatsibo District.
In 2016, HEworks Rwanda Silk Ltd, a subsidiary of HEworks firm based in Korea, signed an agreement with the National Agricultural Exports Development Board (NAEB) to boost the silk industry in Rwanda.
In June 2017, the firm’s president and Chief Executive, Barnabas Heechoon Yang, told The New Times that they would make a two-pronged investment approach of $10 million, of which $5 million will be injected in silk farming development and farmers’ capacity building; and another $5 million would go towards building a silk processing factory in Rwanda.
The project, which was to be jointly implemented in partnership with NAEB targeted growing sericulture on at least 10,000 hectares, and to benefit 5,000 farmers countrywide.
Under the deal, the company would purchase all the cocoons produced in Rwanda, through signed contract farming with cooperatives and farmers.
“We had signed a 20-year contract with the Korean investor to supply him silk cocoons,” Jean de Dieu Rukemwa, the president of Musereko sericulture Cooperative in Gatsibo District told The New Times.
However, Rukemwa exposed that the contract with HEworks was cancelled in 2021, about three years after it was signing.
Farmers said that during that time, they were getting more revenues thanks to the deal with the investoras it was buying a kilogramme of good quality cocoons at Rwf3,450 compared to Rwf1,900 a kilogramme they were getting before [around 2015].
They said that after the investor exited the Rwandan market, NAEB came in and started buying a kilogramme at around Rwf2,000, the price they said was not encouraging.
“What NAEB did is like basically protecting farmers from incurring losses,” Rukemwa said, adding that it still did not make business sense.
He added that NAEB promised them that another investor would venture into the sericulture sector by end of December 2021, something that has not yet happened.
“When there is no ready and profitable market for produce, farming becomes a risky venture,” he said, expressing concern that cocoons get damaged after eight days when the larva inside it develops into a moth and breaks its filament.
Raw silk produced at the Kigali-based silk factory. NAEB celebrated the first silk exports from Rwanda in 2019, thanks to the partnership with HEworks Rwanda Ltd. (courtesy)
As per the agreement, NAEB and HEworks would also collaborate in processing dried cocoons by using the reeling factory, equipped with the automated reeling machine.
The silk factory was built by the government in 2018/2019 – as a catalytic investment and support to the industry – in the Kigali Special Economic Zone, while HEworks would install machines for drying and processing cocoons into silk yarn.
Information from NAEB suggests that almost $1.3 million had been invested in both the Kigali-based silk factory buildings and machinery, as of October 2021.
It indicated that the current factory has the capacity to process between 70-100 tonnes of silk cocoons annually.
The New Times wanted to get comments from HEworks on why they quit Rwanda’s silk sector, but it had not yet received a reply by the time of publication of this article.
Seeking another investor
Also, when contacted for information about the fate of the country’s sericulture sector after the Korean firm’s departure, NAEB officials said that the Government was looking for another investor in the sector, without providing details.
Meanwhile, the Government of Rwanda was seeking interested companies or consortiums to lease the Kigali Silk Factory located in the Kigali Special Economic Zone, for investment, operation, and management.
This is according to a request for proposals for leasing of silk processing factory and investment in sericulture sector that was signed by NAEB Chief Executive Officer, Claude Bizimana on October 26, 2021. The New Times accessed this request from NAEB’s website. The deadline for the submission of bids was November 24, 2021.
As per the proposal, the selected bidder shall also support farmers to produce quality cocoons and buy their produce.
Unmet target
Thanks to the partnership between the two parties to the above-mentioned deal, it was planned to export silk worth about $50 million per year by 2020 to countries such as India, China, Japan, Korea; and the European continent.
However, NAEB’s report for the fiscal year 2020/2021, showed that Rwanda exported 17,042 Kgs of silk products which generated over $254,000 (about Rwf254 million). The exported silk products included 9,000 Kgs of dried cocoons to Vietnam, 7,448 Kgs of silk sheets to China, and 593 Kgs of raw silk to Italy.
It is to note that cocoon production dropped from 39.4 tonnes in 2019/2020 to 27.3 tonnes in 2020/2021, which was the first decline in the last five fiscal years.
NAEB’s report explained that the 30.5 per cent reduction in cocoon production in 2020/2021 compared to the previous fiscal year, was mainly attributed to the absence of investors and existence of few technicians to follow up farmers’ activities.
Major shelved plans
In January 2019, HEworks Rwanda Silk Ltd Managing Director, Seok-Weon Yoon told The New Times that they were planning to be able to export silk that will be over $100 million by 2025.
Moreover, Yoon said that they would embark on the construction of a big factory that was to be built in Bugesera Industrial Park, whose completion was expected by 2025.
“We already purchased land to build the biggest factory which will export $350 million and create 6,000 jobs until 2030,” he said back in January 2019.
