When the United Nations offered Carol Cassidy a job in Laos nine years ago, she barely knew where the tiny country was. Today, Cassidy is credited with almost single-handedly reviving its weaving tradition. Her business, Lao Textiles, is making the Land of a Million Elephants (sandwiched between Thailand and Vietnam) a favourite destination for New York designer and London art collectors.

Cassidy, now 41, took up the offer and moved to Laos in 1989 for a year as a consultant to the textiles development programme.  Laotians had been weaving for centuries, though their skills had faded after 100 years of French colonization, Japanese occupation and American bombing.

Farmers had switched from producing silk to growing opium poppies. Women had all but given up the unique, intricate designs and were using simpler patterns. Looking at the elaborate heirloom pieces people kept hidden in their stoneware jars. Cassidy saw a chance to save a disappearing art form and develop an untapped market.

When Cassidy’s UN contract expired, she decided to start her own business in Laos. “The challenge was to bring Lao textiles into the future. I wanted to combine my 20 years of experience with hundreds of years of Laotian heritage,” says Cassidy, who started weaving as a teenager in Woodbury, Connecticut, and later studied at the University of Michigan and in Finland and Norway.

Cassidy commissioned market research in Paris and New York: these confirmed there was a strong interest in museum-quality textiles and hand-woven art. With their life savings of $200,000, Cassidy and her husband, a former UN development specialist whom she met in Africa, formed Lao Textiles, the first company owned by Americans and incorporated in Laos since the country was opened to foreign investment in 1986.

It was a slow start. Cassidy played many roles: artist, designer, entrepreneur. Her first and largest expenditure was restoring the dilapidated house which became her studio, showroom and home. The spectacular scarves and wall hanging are draped from rosewood racks, making the space a mosaic of rich, subtle colours and textures.

Cassidy’s next step was to train the weavers. Training lasted for 18 months; she finally had something to sell in January, 1992. The weavers and looms – all hand-operated – are situated behind the house in an open-air workroom with a bamboo roof and ceiling fan.

Her former gardener colours the silk using chemical dyes imported from Germany and computer-matched to traditional dyes made from indigo and saffron.

The pay and conditions at Lao Textiles are enviable for Laos. Workers are paid $50 a month while being trained, get an unheard-of three months’ maternity leave, pension and health benefits, and once trained earn between $80 and $200 a month, several times the average local salary. There is almost no staff turnover, which is important considering the cost of training.

In between renovating the house and training the weavers, she fine-tuned the product line: silk upholstery fabrics, wall hangings and accessories. The techniques highlighted Laotian weaving: tapestry, brocade and ikat, a complicated process that uses selective dyeing before the pattern is woven.

Cassidy designed and built five looms (a carpenter built the next 17) using traditional Lao weaving mechanisms and modified them to make longer, wider pieces.

She researched designs, sourced the raw materials and for the first three years dyed all the silk herself. She till supervises every aspect of the business, including contracts with local suppliers, from, for example, silkworms’ diet to the production of acid-free wrapping paper and shopping bags made of mulberry bark.

Meanwhile, her husband handles the finances and administration and has taken on a considerable share of the child-rearing responsibilities (they have a nine-year old son and a three-year old daughter).

Cassidy has never done any marketing or advertising, relying exclusively on word-of-mouth. She was convinced that textile collectors would find her and she was right: “There is always a market for quality.”

The turning point came in 1995 when Cassidy held a one-woman show at the Museum of the Fashion Institute of Technology in New York. The timing was right: eco-fashion and Indo-chic were becoming popular.

Most of her clients are foreign; 80 percent of the work is exported. Customers include Thai royalty, museum curators and New York architect Peter Marino, responsible for the refurbished Dior boutique in Paris. Customers telephone or fax orders and Cassidy uses a courier company to deliver around the world. European designers commission for houses everything from tablecloths to curtains, upholstery and wall hangings. Commissions account for about 60 percent of sales.

It can take two weeks to weave a scarf and six months to make a wall hanging. Scarves start at $150 and wall hangings at $1,200. In addition to furnishing fabric, she has expanded her finished items to include ties, waistcoats and Japanese obis.

Cassidy says Lao Textiles made its first reasonable profit in 1995. Since then, she has recouped her initial investment, and turnover has increased five-fold since the start. The number of employees has grown from five to 40 and the company has taken over the entire house. Cassidy and her family moved out a few years ago.

Cassidy is not at a crossroads; it would be logical to expand but she is anxious to maintain quality and integrity. Increasing output would mean stepping up every phase of the process. For instance, she has had to turn down an order from New York designer Donna Karan because her weavers can only complete a few centimetres a day. An order for curtains in a London apartment will take up two looms for nine months.

It is a challenge running a business in a country which is making the transition to a market economy. Cassidy went to Laos before it had a constitution, foreign investment regulation, tourists or even international phone lines. In the early days, making an overseas call involved taking a wooden boat across the Mekong River to a village in Thailand.

■ Lao Textiles, Ban Mixai, PO Box 5088, Vientiane, Laos. Tel.: (856) 21212123; fax: (856) 21216205.