Urgent decisions are needed to mend the furniture industry, reports Ahmed Kotb In the aftermath of the revolution, Egypt's furniture industry is fighting to survive. "Over 40 per cent of the industry's production was usually sold to the tourism sector, but companies in that sector have not yet recovered," notes Ehab Darias, deputy head of the Egyptian Furniture Export Council (EFEC). Moreover, Darias adds, new housing projects and expansion processes in new cities have come to a halt, leading to a much greater problem for the manufacturers who largely depend on selling their products to new homeowners. He also believes that Egypt's furniture exports -- which amounted to around $330 million in 2010 -- have also been affected heavily by a lack of trust in the Egyptian market, and in its ability to deliver on time. "As a result, furniture manufacturers must now depend on retail and target local consumers," Darias said. To make matters worse, the industry is witnessing unfair competition domestically. The industry's biggest problem, according to Darias, is the importation of low quality furniture. Though this has been an issue for years now, it has been dramatically exacerbated in recent months precisely because of the instability that Egypt is undergoing. According to Darias, importers have flooded the market with low quality products, most of which are shipped over from China and other East Asian countries, and whose prices are lower than their actual value. "Aside from the fact that these countries subsidise 30 per cent of the value of exports, some importers manipulate their receipts to show a lower value than what was actually paid for the products," he said. "That means that they pay lower customs." Darias went on to say that "the EFEC suggested long ago that the government sets a minimum value per container at $20,000, as an easy way to fight unethical conduct, but no such action was taken." Now that the industry is dying, he added, the only effective decision to be taken by the government has been a ban on furniture imports for a period of six months to two years. Sales and Marketing Manager at Rowad Furniture Walid Mohsen agrees with the decision to ban imports, but he believes it should be permanent. "Our sales have dropped by 80 per cent since the start of this year. Retail consumers prefer imported furniture because it is cheap, despite being low quality," Mohsen said. It appears that although Egyptian consumers are aware of the fact that imported furniture is generally poorer quality, they have no real choice because high-quality Egyptian furniture simply costs more. This is especially true now that such a large proportion of the country is facing economic difficulties. Recently married couples looking to furnish their apartments, for instance, choose what's cheapest, without thinking that low quality products are bound to be replaced within years if not months. As for the feasibility of the EFEC's suggestion to ban imports, Darias said that the World Trade Organisation allows member states to take such a decision if the market experiences flooding, but only for a fixed period of time. As a way to promote locally produced furniture and breathe life into the industry, the EFEC and the Chamber of Wood Working and Furniture Industries organised an exhibition in mid-October, featuring more than 50 manufacturers. Held under the slogan "Buy Egyptian", the exhibition was very successful, according to exhibitors. No imported furniture manufacturers were allowed to take part. Total investments in the Egyptian furniture industry are estimated at around LE12 billion.
