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Oriental Weavers collects EGP 51m in outstanding dues of export subsidy The company has three-part plan to stimulate exports by purchasing new machines, entering new markets in Gulf, Asia
Oriental Weavers has collected arrears from the government's export subsidy worth EGP 51m, according to Oriental Weavers' investment report. The company has not ruled out re-considering the prices of their products in light of the increase in production costs. It will also focus on promoting innovation and marketing products with high profit margins in foreign markets. Oriental Weavers said, in its investment report, that the company's plan during 2016 includes promoting exports by expanding the company's work in African, Asian, European and Gulf markets. The report pointed out that the company aims to strengthen its presence in the markets in which it currently exists, such as North America, which grew by 9% owing to rising demand and the company's recent marketing campaigns. Oriental Weavers also improved in European markets, such as Italy and Greece. The company confirmed that it hopes to purchase new spinning machines and looms this year to produce new "Gobelin" carpets, to meet the growing demand for these products abroad. Oriental Weavers has faced several challenges in foreign markets during 2015, leading to an annual decline of 8% in exports. These challenges include the devaluation of the euro against other currencies, an average price decline of 5-8% abroad, a decline of sale rates of a major client in export markets, and the political and economic instability of markets, such as Libya, Yemen, Iraq, Russia, and Ukraine. Oriental Wavers also confirmed that its plan will include enhancing its strong position in the domestic market, in which sales grew by 15% over the past year. This growth comes as a result of the expansion of the company's exhibitions by opening nine new exhibitions to reach 231 in total. The report added that the company is optimistic that its sales growth in the domestic market will continue owing to the diverse demographics and the expansion of the investment market in real estate development, and public and private sector projects. Oriental Weavers' 2015 revenues rose to EGP 5.88bn, compared to EGP 5.81bn in 2014, while its net profits fell to EGP 339.1m, compared to EGP 377.5m in 2014. Beltone Bank's report said that Oriental Weavers reduced its prices abroad by 5-8% on average due to the decline in polyethylene's price, the basic raw material in production, which was affected by the lower oil prices. Beltone expects that the devaluation of the pound against the dollar will ease the pressure on the company's exports. The report explained that exports account for 55% of the company's sales, but the company's budget includes debts in dollar and it imports polypropylene from abroad.
