CAIRO: For a few months, the local press has reported figures reflecting a pessimistic outlook on furniture exports in Egypt, claiming that exports have decreased by 60 percent. These claims were disproved by key players in the furniture industry who confirmed an unprecedented boom in furniture exports in the past couple of years, citing official figures obtained from the General Organization for Import and Export Control (GOIEC). According to the data provided by the GOIEC, furniture exports have jumped from LE 369 million in September 2005 to over LE 1 billion in September of this year, despite inflation in wood prices globally. Mahmoud Roushdy, furniture sector director at Expo Link, attributed this boom to manufacturers' shift from producing classic to modern furniture, a change that was recommended by foreign consultants after surveying both local and international markets. "This is where the international market is going. In order to be able to export at competitive prices, we need mass production, which is very hard to achieve with classic furniture, Roushdy told Daily News Egypt. According to the Chairman of the Chamber of Furniture Industries Redallah Helmy, the increase in the prices of imported wood is an expected result of the strict measures taken by several countries to protect their forests. Because of the shortage of raw wood in Egypt, the wood used in the furniture industry is imported, mainly from Europe and North America. "The increasing demand for wood and the shortage of supply globally, due to growing environmental awareness and forest recycling, has led to an inflation in [the price of] raw wood, Helmy told Daily News Egypt. This inflation, however, did not have a negative impact on Egypt's furniture exports because, according to Roushdy, the bulk of the export supply comes from larger establishments who were able to absorb the soaring prices. "This was not the case for smaller furniture businesses that had no choice but to close down, Roushdy added. Ahmed Helmy, chairman of the Furniture Export Council, told Daily News Egypt that the increase in wood prices was limited to certain types of wood, mainly pine wood, which is widely used in Egypt and imported from Finland, Sweden and Russia. "The square meter of pine wood went up from LE 1,500 to LE 2,800, said Ahmed Helmy, "unfortunately, some wood suppliers in Egypt exaggerate this increase and take advantage of furniture manufacturers by doubling the prices of all types of wood. "The other day, I was making a deal for a wood shipment and I negotiated the price from LE 5,000 down to LE 4,200 per square meter. If the supplier has agreed to go down to this level, why did he offer such a high price in the first place? he wondered. Shifting to modern furniture has also helped manufacturers overcome the increase in pine wood prices by diversifying the wood component in their products, resorting to cheaper artificial wood such as MDF (medium density fiber), some of which is produced locally in Nag' Hammady. "Other than being able to use cheaper types of wood, modern furniture gives Egypt a competitive advantage because it's a very labor intensive industry, Ahmed Helmy said, "Our labor is relatively cheap, which makes our products more competitive. "Some customers prefer Chinese furniture because it's cheaper, but they pay for it a few years later when their furniture is ruined, he added. "In China, they pay huge sums of money for shipping, so they offset this cost by cheaper and, consequently, lower quality wood. In order to prove the superiority of the Egyptian furniture products, a new technology center is now being established in 10th of Ramadan city, in cooperation with the Furniture Industry Research Association (FIRA) - an independent organization specialized in testing, research and innovation for the furniture supply chain. "This way, clients can go there and test the quality of the different products in order to make an informed purchase decision, said Ahmed Helmy.
