Increased capacity by end of year

Egypt’s Oriental Weavers, the world’s largest machine-woven carpet maker, will begin production at its $238 million industrial complex in the second half of 2010.

“We hope to be able to add capacity within the second half of 2010 according to demand,” investor relations manager Haitham Abdel Moneim told Reuters.

The company announced in 2008 that it would delay production at the new industrial complex from mid-2009 to 2010 due to the global financial crisis.

The first production phase will add an annual capacity of 3.5 million m of carpet to the existing total annual production capacity of 100 million m.

Moneim said the complex will be 55 per cent financed through long-term debt and 45 per cent by the company. The first production phase will cost $27.4 million.

He added that Egyptian Propylene and Polypropylene Company (EPPC), a subsidiary of the investment arm of Orientals Holding, would start production at its $680 million complex in mid-2010 with an annual production capacity of 350,000 metric tonnes of polypropylene, Oriental Weavers’ main raw material.

Oriental Weavers now has an 11 per cent stake in Oriental Petrochemicals Company (OPC), currently the sole producer of polypropylene in Egypt, which supplies the company with 90 per cent of its polypropylene needs. OPC has an annual production capacity of 160,000 metric tonnes.

Oriental Weavers sells 45 per cent of its goods on the local market and has an 85 per cent share of Egypt’s carpet industry. It exports the remainder to more than 100 countries.

In November, the firm posted a 1.8 per cent drop in nine-month net income to EGP236 million ($43 million), while net sales dipped one per cent to EGP2.58 billion.

Moneim said that as its export sales slowed 10 per cent, particularly in the US, the firm shifted excess capacity to the domestic market. It also benefited from export rebates of 12 to 14 per cent during the first half of 2009.