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little japan on the delta by m. scott bortot the sleepy city of damietta boasts an outstanding success story of egyptian exports. prosperity, however, hasn’t been evenly spread. mohamed
al shata’s business has seen some good times, but that was several
years back. these days, the small retail shop in the back alleys of
damietta where he sells unfinished chairs receives a fraction of the
customers it once did. “in one day i might make £e 12, but
that’s on a good day,” al shata said. “a lot of days i don’t
make anything. it wasn’t like this before the factories sprung
up.” the
factories al shata refers to are export-oriented operations that
have emerged over the past 20 years to produce large volumes of
fully finished wooden furniture. mostly located on the outskirts of
old damietta and in the new damietta port-project area, the
factories are considered an egyptian export success story. while
this has been great for the exporting factories, it has put the
squeeze on many traditional damietta furniture-manufacturing
operations. their trade, which developed as an offshoot of
damietta’s once flourishing wooden ship-building industry, is in
the midst of a major transformation because of changing economic and
social circumstances. located
on egypt’s mediterranean coast, the city has had its share of up
and downs brought about by local and international players. but
whether it was being sacked by crusading knights or having its share
of the sea trade usurped by government policies favoring alexandria,
damietta has always managed to thrive. a rising sun dubbed
by locals as “the japan of the middle east” or “the hollywood
of the furniture-making industry,” the city has received praise
from president hosni mubarak, who said he wanted to see a hundred
cities like it in egypt. the importance of damietta as a symbol of
high-quality exports cannot be understated. those
involved in the industry say damietta is responsible for at least 90
percent of the wooden furniture manufactured in the country. in
2000, according to capmas statistics, wooden furniture exports
earned nearly $9.5 million, up from 1997 when they brought in some
$6.4 million. while the united states is the largest recipient of
egyptian wooden furniture, other major importers include italy and
france. regionally, saudi arabia imports the most. and
these exports are going up. but at the same time, the smaller
producers who deal with the local market say the growth of large
factories has hurt their businesses. although it could not be
confirmed, small manufacturers said the factories would offer a
worker slightly higher pay and – because their orders are larger
and often more predictable – a more steady income. this, according
to the small manufacturers, draws good craftsmen to factories, which
in turn hurts the overall quality of the industry. another
concern has been the emergence of modern, lavish showrooms. many
exporters have also set up local operations, with large showrooms
along the roads leading into the city. ideally situated, the
showrooms can nab customers on the way into damietta before they
reach the traditional furniture district. the
traditional industry involves a series of workshop operations –
carpenters, carvers, painters and upholsterers – requiring
customer input at every stage of the process. showrooms, on the
other hand, offer ready-made products, making shopping less time
consuming. “one
of the reasons i chose showrooms is that they exhibit finished
products,” customer mohamed abdel fatah, a suez resident, said.
“in the downtown area, you just aren’t sure of what the finished
product will look like after the different stages of painting,
varnishing or adding decoration.” making
things simpler for customers is an inevitable trend in a changing
society, some in the industry said. in the past, people were able to
take a long time in custom-designing their furniture. according to
alaa hamam, owner of el-riad mobil furniture, the showrooms have
appeared to address the needs of a new generation of customers.
“in the past – let’s say 20 years ago – there weren’t a
lot of big showrooms,” he said. some
showrooms offer specialty furniture, tailored according to customer
suggestions. “but nowadays,” hamam said, “they usually offer
pre-made furniture, because people’s lifestyles have changed.” old world charm despite
the changes, there are still customers who prefer to visit old
damietta, either because they like the traditional process or
because they find the workshops more affordable. when they are
directly involved in the procedure, customers can bargain to get the
cheapest price at every stage. some bring pictures of items they
want replicated, and in some cases, shoppers will invite carpenters
to their home to design furniture to fit a certain space. knowing
that the craftsmen have learned the trade passed down by their
forefathers, customers gladly heed their advice. the
presence of many highly skilled craftsmen in one area creates a lot
of competition, and this keeps prices down too. small workshops with
no more than a handful of workers strive constantly to produce
high-quality items that will help spread their reputations outside
the city. yet
according to life-long furniture maker hassan al mureeh, co-owner of
the trade workshop for furniture manufacturing, all the competition
creates an equilibrium, because the industry produces furniture for
people from all walks of life. “we compete with each other in
terms of quality. one guy might have cheaper prices, but this is
partly because his work isn’t as good, or perhaps his designs
aren’t as attractive,” al mureeh said. “but it all balances
out between us in the end.” but
there is little balance between small producers like himself and the
larger furniture factories and their showroom outlets. while he has
several workers in his shop, a big factory might have up to 75,
carrying out all the steps in the furniture-making process under one
roof. with the whole process contained in one space, the quality of
the product can be monitored from beginning to end, making it easy
for foreign importers wanting regular shipments of damietta
furniture. ahmed
waly, general manager of the damietta chamber of commerce, said that
sound pricing strategies as well as good quality had helped to
expand exports. the boom in furniture exports (and the subsequent
emergence of large local showrooms) was also partly due to
government encouragement. “we began looking at foreign markets
during that time, and things really took off because the furniture
we produce is very competitive due to its high quality and
relatively low prices,” he said. onerous duties all
is not well, however. a report recently produced by the chamber of
wood manufacturers (excerpts of which al wafd published on november
18), said that the industry, despite its great reputation, needs
help. one of the report’s recommendations was that import duties
be reduced on wood. most of the wood used in damietta furniture is
imported from romania, yugoslavia and russia, and its price after
customs affects everything in the industry. the
report’s other major suggestion for the government was to revoke
the sales tax. scrapping
the sales tax would be a sure way to drum up support among furniture
merchants and manufacturers. sources in the industry say that since
the tax was implemented in the middle of last year, small
manufacturers and retailers have been barely able to make ends meet.
“the
new sales tax has really hurt the industry in damietta, and many
small factories have shut down because of it,” said furniture
retailer magdy el seyuffi, manager of saada furniture, near
cairo’s citadel. waly
of the damietta chamber, however, toed the government line,
insisting that the sales tax is not a burden on either customer or
merchant. rather, he said, the damietta industry is facing problems
because of a general slowdown in the economy. abdel
meguid al iraqi, owner of several workshops in damietta, agreed. for
him, the general economic slump is hurting the furniture industry
more than any other factor. “money is so tight today,” he said.
“people need to buy meat for their families, they need clothes,
and private lessons are a necessity for children. so buying
furniture is tenth on people’s list of priorities, and we are
feeling it.” for
instance, labor and materials might bring the price of a certain
item to £e 30,000, but customers are only prepared to spend £e
20,000, al iraqi said. if an item is sold for less than cost, then a
huge loss is incurred. but if something that expensive fails to sell
at all, it could spell disaster. “and, if i close down, a chain
reaction starts, affecting manufacturers and others related to the
industry as well,” he said. cash on delivery....usually legal
and planning issues are also stunting the growth of the furniture
business, al iraqi and others said. for example, no known legal
apparatus covers dealings between furniture producers and customers
with regard to delivery. after choosing furniture, most customers
leave a deposit and promise to pay on receipt of the goods at a
future date. some
customers, however, try not to pay once the goods have arrived.
truckers are instructed not to unload the goods – no matter how
much customers plead – until payment is made. if the person who
placed the original order does not go through with the purchase, the
merchant is usually forced to unload the goods at a showroom. there
is no way to recoup the entire cost. “if
i want to make a contract, i have no legal guarantees that it will
be carried out,” al iraqi said. “if a guy wants some pieces
shipped and says he will pay the remainder on arrival but doesn’t
pay, what is my legal recourse? none really.” payment
risks “stop us from expanding easily into other areas,” he
added. exporters
sometimes encounter similar problems, according to hamam of el-riad
mobil. while acknowledging that the export market from damietta was
in good shape, he said it could much better if there were more
clarity about legal issues concerning interaction with foreign
buyers. much like at the local level, there is no legal recourse if
furniture has been made and an overseas customer decides not to pay
the remainder owed. hamam
also recalled what happened to some furniture producers after the
iraqi invasion of kuwait in 1990. although this was an unusual
situation, it highlighted the lack of legal recourse for producers.
“there were heavy losses in the furniture market after iraq
invaded kuwait,” he said. “things had been sent there, and the
money for them just never came.” some
export-oriented businesses in damietta have found ways to address
the problem – but doing so is costly. the domiat egypt company has
been doing business for years with foreign customers and has
dealings with several european and middle eastern countries as well
as extensive operations in the united states. according
to the company’s accountant, most clients are reliable, but the
damietta producer has sometimes had to resort to legal proceedings
to secure its rights. “we have gotten lawyers in other countries
to go after customers who don’t pay, but it costs a lot of
money,” he said. a craft without equal apart
from the occasional unreliable client, the domiat egypt company has
achieved genuine success in the furniture export trade. employing a
relatively large staff of 55, the company still uses the same
methods for ensuring customer satisfaction as the small workshops
do. mohamed
issa, one of the company’s co-owners, explained that domiat
egypt’s speciality is replicating antique furniture. the firm’s
big break came 15 years ago, when a dutch furniture agent wandered
into what was then the issa family’s small workshop in old
damietta and requested some special wooden bars carved with a unique
pattern. “he had gone all over egypt looking for someone to do the
job for him,” issa said. “in the end, my father said that we
could do it, and we did. after that, we started having two or three
contracts a month.” business
took off, continuing almost without a glitch until last year’s
september 11 attacks in the united states. even that setback, issa
added, was only temporary, and sales to the united states are now on
the rise again. is
there any competition that can challenge the damietta furniture
industry at home or abroad? not likely, according to practically
anyone in the industry, from factory managers like issa to
back-alley carpenters like hassan al mureeh. “we
are artists, and nothing from the outside can cut into our
market,” al mureeh said. they used to say that about ramadan lanterns,
too.
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