Egypt’s furnishings and accessories trade, one of the largest in the world, has witnessed tremendous growth and the country is today recognised as a global resource for world-class furniture and accessories.
Its markets stretch out to include North Africa and parts of Europe.
Investment in the Egyptian furniture industry has topped $2 billion and the market is worth $1 billion annually and employs more than a million people through 200,000 establishments.
Of the annual exports of $200 million, nearly $50 million of furniture reaches the Middle East region. Egypt is well known for its traditional woodwork and designs. Over the years, Egyptian designs have been influenced by European trends, owing to its proximity to the continent, and found many willing takers in markets across the world thanks to its competitive pricing.
Egyptian prowess at reproducing French period furniture is well acclaimed. However, Egypt is now entering another era as manufacturers update their traditional approach and take a fresh look at both their design and technical processes to enable them to compete globally. In a bid to upgrade this sector, technology centres are being established in Egypt jointly with the referential technical bodies that include the likes of CTBA – France, Federlegno Arredo – Italy, Confomadera – Spain and Fira – UK.
Expolink, the export development agency for private furniture manufacturers, is laying emphasis on stepping up its promotional drive in the region.
Last year, with a view to making inroads into the supply of contract furniture, the Egyptian pavilion participated at the Hotel Show for the first time. The country’s representation also grew significantly by 33 per cent over 2005 at Index with a wide variety of companies that specialise in home furniture, contract furniture, bedding and home textiles to include upholstery, curtains and tapestries taking up stands.
“Currently, the measures that we have taken to increase trade participation in this region is to intensify the presence of the biggest Egyptian manufacturers in all the trade-related fairs across the GCC. Once this is achieved, then we intend to open permanent distribution channels in the region and thus maintain a strong Egyptian presence,” says Mahmoud Rushdy, manager, Expolink.
Egyptian manufacturers are all set to ensconce themselves in the trade arena in a bid to access the opportunities available in the region. At the recent Messe Frankfurt shows in Dubai, where Egypt featured a pavilion in the Hometech section, eight companies participated and the Olympic Group, one of Egypt’s largest electrical home appliances, dominated with the largest stand displaying its entire range of home appliances, kitchen cabinets and electrical equipment. Says export sales general manager for appliances Hesham Stait: “We’ve been in the market for over 40 years offering a full range of home appliances. Olympic acquired Ideal, a well renowned 65-year-old refrigerator brand, and then started expanding the range. Today, the company has two refrigerator factories for one and two-door fridges from 270-610 litres with all options. The quality is comparable with European or American high standards.”
The main products manufactured are automatic washing machines, refrigerators, electric water heaters and gas cookers. Other products include fans, oil-filled radiators, exhaust fans, semi-automatic washing machines and coolers. The group’s key international partners, suppliers and licensors include the world’s leader in electric appliances – Electrolux (Zanussi), Daewoo, Philips, KOC and Ariston and Indesit. Ninety per cent of the group’s products are introduced into the market through the group’s wholly-owned wholesale trader, EPA, which has 12 branches and a huge network of 1,600 dealers and distributors. The other trading arm of the group, B-Tech, handles retail operations with a focus on consumer credit sales. B-Tech operates 24 outlets located at some of the best commercial centres in Cairo and other provinces within Egypt.
“With a LE 2 billion turnover, we lead in the exports of both electric water heaters and automated washing machines while we stand at number two position in gas cookers and refrigerators. Our GCC presence too is very strong and we rank number two among the Arab exporters to the region. Our products are top notch and we target every class and profile of user. Current GCC exports stand at $50 million and it is growing by over 100 per cent each year. For the Gulf region our presence is strong in every area,” says Stait.
At the ISH kitchen + bath show, the Dh10 million ($2.72 million) firm, Kabnoory displayed its ranges of aluminium kitchen cabinets. Mohammed Thabet, general manager for imports and exports of Kabnoory said his stand received encouraging response from the trade. “Our product range includes aluminium kitchens, doors and windows and bathroom cabinets. Last year, our exports to Sudan, Libya, and Oman touched $500,000.”
Six months ago Kabnoory, appointed an agent in Oman. “In a short span we have already crossed our initial target of Dh40,000 a month on an investment $150,000. Now we plan to set up our own showrooms in Dubai, Abu Dhabi, Kuwait and Qatar this year. We may even consider offering franchises to set up manufacturing operations in these countries.”
Currently, Kabnoory manufactures around 3,000 to 4,000 units a month in 54 colours that come in eight different themes ranging from Roman to Italian to European. The challenges of marketing in this region are many but according to Thabet: “People do not understand that aluminium comes in different thicknesses and that unique moulds are more expensive. This is why the biggest challenge for us to do business here is to explain that to our customers in the market who are used to cheaper products and lower quality.”
Clearly Egypt with its low labour cost and extensive experience is in a niche position to drive growth in its exports of furniture. Says Adham Nadim, chairman of the Furniture Export Council and head of the Furniture Steering Committee at Expolink: “We have seen the regional market grow exponentially and although Dubai clearly leads the way, massive investment is being poured into tourism projects from Kuwait to Oman. With our well-established industrial infrastructure, implementation of modern manufacturing principals, and keen attention and quick response to the market demands of the overseas customers, low-cost manufacturing base, geographic location and cultural awareness, we are confident that we can compete for a greater share of the regional market.”
By Manisha Koshy