The manufacturers are struggling with the rise of the dollar, the decrease in sales and the difficulty of pricing
High prices of final products between 30 and 40% due to costs
Deteriorating freight costs have stalled exports of a number of products
Furniture manufacturers in Damietta governorate are struggling with the rapid increase in the prices of raw materials and production requirements, due to the depreciation of the Egyptian pound against the dollar on the one hand, and the decrease in sales on the other hand, which is affected by the high prices of finished products in light of the global economic crises and the repercussions of the Russian-Ukrainian war.
However, these problems may have motivated the Enterprise Development Agency, in collaboration with Damietta Governorate, to hold the “Made in Damietta Furniture” exhibition in its third session at the exhibition site in Nasr City from December 8 to 17, with the participation of 74 exhibitors to to stimulate sales.
Al Borsa spoke to the exhibitors participating in the exhibition. Amgad Al Hadidi, director of the Princess Palace exhibition in Damietta, said that the market suffers from the problem of fluctuation in the prices of production inputs, not only their rise not, which is a major crisis in manufacturing and pricing, because most of the production inputs are imported. The wood is imported from Russia and the material is from Turkey.
He mentioned that the prices of bedrooms and dining rooms ranged as a maximum between 30 and 36 thousand pounds, and rooms for children at 19 thousand pounds, and the salon starts from 30 thousand pounds, in addition to the corner, which costs 16 thousand pounds . .
Al-Hadidi, who inherited a job in the furniture industry, said the market is currently seeing an increase in the unemployment rate among workers in furniture production, due to the closure of some workshops and factories due to the high prices.
He explained that the prices of imported materials had jumped by 100%, prompting him to increase the prices of his products, so that the price of the sofa set amounted to 23,000 pounds, from 13,000 pounds.
He added that in the past he was not interested in marketing, and everyone knew Damietta’s reputation in the furniture industry, but the issue is different now; After the decline in sales in Damietta Governor, participation in many exhibitions in other cities became a necessity due to the high demand. He also participates in exhibitions outside Egypt.
Mahmoud Radwan El-Badawihy, owner of Radwan El-Badawihy Furniture Company, did not hide his happiness at his first participation in an exhibition outside Damietta and said: “I hope that the exhibition will remain throughout the year and not just twice in Not June and December, as it is an outlet for furniture manufacturers to reach more customers.” He asked for exhibitions Internationally, not just locally.
He mentioned that the prices of his products at the exhibition varied between 20,000 and 50,000 pounds, in addition to offers such as a salon set and a chaise longue as a gift, priced at 28,000 pounds instead of 32,000 pounds .
Al-Badawihi explained that his factory is 45 years old and has 13 production lines, and recently he bought 5 new machines, the price of each is 50 thousand pounds, so that the factory’s production increased by 30% this year compared to 2020 .
He said that the production requirements are all imported wood, materials and paint, and what the factory relies on locally is only Egyptian glass and labor.
He explained that the prices of production requirements increased after the liberalization of the exchange rate, followed by a decrease in the factory’s production capacity by 20%, and the prices of products only increased between 30% and 40%.
Al-Badawihi said that he owns one outlet in Damietta, and at the beginning of the new year, he intends to have an outlet in Cairo, where the purchasing power is more than Damietta by 90%, and the most popular governorates are Alexandria, Port Said and Ismailia, where the geographical proximity to Damietta.
Muhammad Kamel, the owner of the “MK” gallery, said that he entered the furniture world 17 years ago, and he has a factory with one production line, specializing in the production of modern furniture.
He added that he imports 80% of production requirements from abroad, especially from China and Turkey.
Kamel stated that the recent jump in the dollar has negatively affected the prices of finished products, increasing this year by 40% compared to the previous year, and that the governorates of Alexandria and Cairo are the highest sellers for the furniture sector, and he continued that production capacity has decreased by 50%, and demand by 70%.
Kamel explained that the increase in freight rates has stopped the export of a number of products in the furniture industry, and appealed to the state to provide raw materials.
Mamoun Abul-Naga, director of the Al-Nada Modern Furniture Factory, said that on the first day of the exhibition, the factory approved discounts of up to 35%, including the offer of two rooms at a price of 75,000 pounds.
Abu Al-Naga added that the factory’s production capacity has decreased by 50% this year compared to the previous year.
Amr Al-Morsi, sales manager at Al-Muntasir Gallery, said that he imports plywood from Russia, and the war between Russia and Ukraine has negatively affected prices and forced them to rise.
The crisis affected the production capacity of the factory, so it produced 16 pieces per month instead of 24 pieces, and a third of the workers were laid off, reducing from 30 to 20 workers.
Al-Mursi stated that the “Al-Muntasir” factory used to export 60% of production to Sudan and Saudi Arabia, but exports stopped during that period due to the cost of shipping.
I wrote – Fatima Abu Zaid and Nada Al-Adawy: