Egyptian Woodworks Monograph

The Industrial Modernisation Centre - IMC The Chamber of Woodworking Industries - CWI

Egyptian Woodworks Monograph

Prepared by:

Arab African Centre for Marketing & Consultancy Services – AAC

October 2003

The opinions, figures and estimates set forth in this document are the responsibility of the author and should not necessarily be considered as reflecting the views or carrying the endorsement of the Industrial Modernisation Centre. Mention of firm names or commercial products does not imply endorsement of the Industrial Modernisation Centre. Material in this document may be freely quoted or reprinted, but acknowledgement is requested. This document has not been formally edited.

Woodworks Monograph – AAC 1

Executive Summary

A) Background Information

Perhaps one of the largest obstacles inhibiting the growth of the Egyptian furniture and woodworks sector is the lack of updated accurate and comprehensive data on the sector. Furthermore, available data is not accessible to the different groups involved in the industry and its related sub sectors. In this context, the "Woodworks Monograph" project was formulated by the Industrial Modernisation Centre (IMC) in response to the request made by the Chamber of Woodworking Industries. The scope of the assignment involved conducting the following tasks by the consultant (Arab African Centre for Marketing and Consultancy Services – AAC) under the supervision of IMC and the Chamber of Woodworking Industries (CWI):

1) The compilation of all available information and data on the furniture and woodworking industry in Egypt during the past 5 years as well as attempting to resolve the existing inconsistencies within collected data.

2) The contribution to the improvement of the availability and accessibility of the information about the woodworks sector by identifying information gaps and offering suggestions on how such information may be obtained.

B) Methodology Given the size and complexity of the furniture and woodworks sector, the methodology developed by the project team to achieve the above mentioned objectives involved conducting research on the sector including:

A) Primary Research: the collection of first hand information through meetings and interviews with representatives of over 40 government authorities and information providers

B) Desk Research: All secondary data sources that are relevant to the scope of the study were

collected and investigated. This information included all published data from official authorities and NGOs, relevant studies and reports conducted by other organizations, information available on the Internet and finally the information available at AAC

C) Analysis: The information gathered through this research process was assembled in a tabular

format to facilitate information retrieval and utilization. Furthermore the compiled data was analyzed and inconsistencies within the gathered information and information gathering techniques were identified. Finally, the project team came up with recommendations for the improvement of information gathering and processing techniques as well as means of filling the information gaps about the furniture and woodworks sector.


C) Summary of Findings

Number of Entities

According to statistics gathered from the General Organization for Industrialization – GOFI, the total number of furniture and woodworks factories provided is 2503, with Damietta having the largest number of factories at 565, followed by Sharkeya at 515, Cairo at 481, and Giza at 156. Data obtained from the Industrial Registry on the other hand indicate that the total number of furniture and woodworks factories is 1910, of which 515 are situated in Sharkeya, 506 established in Damietta and 285 in Cairo. It is worth pointing out however, that both these sources only include in their statistics "industrial" entities that comply with the Ministry of Industry's definition for industrial establishments. It follows that workshops and small factories that do not abide with this categorization are excluded from the above mentioned statistics.

Data obtained from the Commercial Registry indicates that the total number of companies producing furniture and woodworks final commodities is 54,097. Furthermore, the total numbers of furniture and woodworks wholesalers and retailers registered at the commercial registry are 8,012 and 37,017 respectively. The number of factories producing intermediate products (feeding industries) is 8213. It follows that the total number of furniture and woodworks entities registered at the commercial registry is 107,339.

According to the Ministry of Local Development, the total number of workshops registered with furniture and woodworks cooperatives is 89,612. Damietta has the highest concentration of workshops – 23,082, followed by Cairo – 14,163, followed by Dakahleya- 6,973 then Giza – 6,656.

An overall analysis of the data presented by different sources brings to light discrepancies in the data collection and information gathering process, ranging from incoherent methodologies to inconsistencies within the gathered data. Despite gaps and inconsistencies in the information gathered, certain assertions can be made about the furniture and woodworks industry in Egypt. Such include the following:

1. Cairo, Damietta, and Sharkeya are the centers of furniture and woodworks activity in Egypt 2. In terms of number of entities, furniture and woodworks activity is primarily dominated by

micro, small and medium sized enterprises – M/SMEs, however an investigation of production capacity is necessary in order to identify the market shares of large producers vis-à-vis M/SMEs.

3. Furniture and woodworks activity is primarily run by the private sector.

Estimation of the Aggregate Number of Furniture and Woodworks Entities in Egypt Based on the foregoing analysis of the statistics obtained from the various government organizations, it has been observed that:

1- There is no single source of information in Egypt that provides comprehensive statistics regarding the total number of furniture and woodworks industrial establishments

2- The statistics obtained from the different organizations are overlapping and inconsistent;

making it impossible to come up with an accurate figure for the total number of entities operating in the sector


Calculation of the Total Number of Registered and Unregistered Furniture and Woodworking Entities

Source No. of Entities Industrial Entities - Commercial Registry 60,465

Difference Between Commercial Registry Statistics & Ministry of Local Development Statistics - Industrial Entities 31,881 Wholesalers - Commercial Registry 8,012

Retailers - Commercial Registry 38,017 Total 138,375

Based on the calculation presented above, the total number of furniture and woodworks entities registered with the Egyptian government is estimated to be 138,375. It is widely known however; that the sector is dominated by informal entities that are not registered with any of the government organizations mentioned in this report. According to Economist Dr. Heba Handousa, the informal sector represents 77% of the non-agricultural private sector in Egypt. Given that the furniture and woodworks sector is highly dominated by informal activity, it is believed that the informal sector represents at least 40% of the activities undertaken by the industry i.e. 55,350 entities. Based on this assumption, the total number of furniture and woodworks entities would reach 193,725. It is worth noting however that these estimations are indicative and that in order to reach a more accurate figure that serves as an accurate representation of the size of the sector, extensive research that involves conducting extensive field research is required. Calculations of the Value of Investment in the Furniture and Woodworks Sector Value of Investment for Registered Factories and Workshops Interviews with members of the Chamber of Woodworking and other key figures in the sector has revealed that in order to operate, the smallest woodworks workshop requires more or less an invested capital of L.E. 5,000. It follows that the total value of investment within the woodworking industry would at least be L.E. 691 million (L.E. 5,000 x 138,375). It is worth noting however, that a considerable number of furniture and woodworking entities operate on a large and sophisticated scale that necessitate investments worth over L.E 10 million. According to members of the Chamber of Woodworks, there are at least 100 factories operating on such a scale. Taking this into consideration would increase investments by L.E. 1 Billion (L.E. 10 million x 100 factories). The estimated value of investment would thus be L.E. 1,691 million. Imports

Egyptian imports of wood and wood products HS 1992 (Code # 44) as reported by the Egyptian government, have increased from US$ 606,400,000 in 1999 to US$617,000,000 in 2000. This trend however was dramatically reversed in 2001 when imports decreased by 7.5% due to poor economic conditions. This was followed by another decline of 4% in 2002. Egypt's main sources of wood inputs are in descending order, Russia, Finland, Sweden, Romania and Indonesia. A comparison between Egyptian and Foreign Sources of Statistics for Imports of Raw Wood and Wood Products (HS1996 Code # 44) presented a shared general trend of Egyptian imports over the years, (increase in


imports in 2000, and a decline in 2001). However there is a large disparity in the figures, the numbers provided by the Ministry of Foreign Trade - MOFT being much larger than those presented by United States Statistics Division - UNSTATS. This discrepancy is partly a result of the fact that upon the inspection of the imported product, the Customs Authority usually modifies the prices (adjustment for under invoicing). Furthermore, the Egyptian Customs Authority does not abide with the international coding and documentation systems developed by the United Nations, which also results in a discrepancy in statistics.

Egyptian imports of Wooden Furniture as presented by the Ministry of Foreign Trade (MOFT) from 1999- 2002 have generally been on the rise (US$ 6.1 million in 1999, US$ 9 million in 2002) with a decrease in 2001. In general the largest percentage of imports fell within the Other Wooden Furniture Category (US$3.3 million in 1999, US5.3 million in 2000, US$4.9 million in 2001 and US$6.6 million in 2002). The second largest category of wood furniture imports is office furniture to be followed by bedroom furniture then kitchen furniture.

Total Egyptian imports of Furniture, lighting, signs, prefabricated buildings (HS1992 Code # 94) obtained from Egyptian sources revealed a decline in total imports during 1999 and 2000 followed by an exceptional increase in 2001 and a small increase in 2002. Noticeable increases were found in the categories of 'wooden furniture' and 'office furniture'. Foreign statistics on the other hand revealed that imports of this product group have undergone a general decline with the 1999 being the only exception. The main sources of imports are the European Union, Europe (other) and North America- NAFTA. While the overall trend appears to be the same, there are large statistics disparities between the two sources of information with the Foreign Statistics (UNSTATS) being much higher than those of CAPMAS and MOFT.

Exports

According to the Ministry of Foreign Trade (MOFT) Egyptian exports of wood and wood products (HS 1996 Code 44) have gone through several fluctuations over the period 1998-2001. Exports decreased from US$ 3.8 million in 1998 to US 2.4 million in 1999 to reach US$ 3.6 million in 2000 and US$ 5.8 million in 2001. The data obtained from the United Nations Statistics Division covering Egyptian exports of the abovementioned product group also indicated that overall, exports have declined throughout the period, from US$ 4.5 million in 1999 to US 4.2 million in 2000 and US$ 3.2 million in 2001. The greatest amount of Egyptian exports according to both sources is received by the European Union followed by the Arab region and Asia.

Data obtained from MOFT on Egyptian exports of Furniture, lighting, signs, and prefabricated buildings (HS 1996 Code 94) revealed that exports have witnessed an overall increase between 1998 and 2002. Total exports increased from US$ 18.31 million in 1998 to US$ 19.25 million in 1999. This was followed by a decline to US$ 18.65 million in 2000 followed by a further decline to US$ 16.5 million in 2001. In 2002 however, total exports witnessed a significant increase to US$ 21.62 million. The largest amounts went to Arab countries followed by the European Union and North America –NAFTA. According to the United Nations Statistics Division Egyptian exports of the abovementioned product group have increased from US$ 49 million in 1998 to US$ 58 million in 2001.

Observations on Imports and Exports Statistics A general examination of the statistics gathered on imports and exports reveals the following:

1- The system used by the Customs and Tax Authorities and CAPMAS are unreliable, raising questions regarding the accuracy of the data being published. The Customs Authority does not abide with the international coding, classification and documentation systems developed the United Nations. As a consequence, statistics forwarded to the CAPMAS tend to be lacking in


terms of reliability, making statistics published by government authorities are inaccurate and unrepresentative of actual trade flows.

2- A comparison between Egyptian and International statistics on Egyptian trade in wood and

wood products (HS 1996 code 44) and furniture and prefabricated buildings (HS 1996 code 94) has indeed revealed great discrepancies with foreign statistics usually presenting Egyptian imports and exports to be much higher than the statistics provided by Egyptian authorities. These discrepancies could also be a result of one or a combination of the following factors:

a. Under invoicing by exporters and importers b. Inaccurate documentation by the government authorities

3- Furthermore, a comparison between the figures reported for the money value of exported

wooden furniture and the quantity exported are unreasonable. For example, the export value of wooden furniture (HS Code 9403600000) was US$6.2 million in 1999. This value corresponded to exported quantity of 4,224 ton. It follows, that on average, the price of 1 ton of wooden furniture exports is US$ 1,467. This figure is very low not only when the costs of inputs and production are considered but also when a comparison is made with the prices of wooden furniture products sold in both the local and international market. The same phenomenon can be depicted with other kinds of furniture as well. This discrepancy between the quantity of exports and the money value can be explained by the fact that to evade payment of custom duties, most exporters do not report the actual value of their exports. According to the Chamber of Woodworks, the real value of exports is sometimes 10 times as high as the reported value.

Labor Number of Registered Workers

According to the General Organization for Industrialization – GOFI, the total number of workers in the sector is 34,765, with Cairo (14,881 workers) having the largest number followed by Giza (4,637 workers) and Alexandria (3,375 workers). According to data obtained from the Industrial Registry, the total number is 10,094 workers of which the number of workers employed by furniture factories (code 3321) is 6,571, almost two times as large as the number of workers in factories registered as woodworks producers (code 3311) which amounted to 3,523. Furthermore, Sharkeya has the largest number of workers in both categories totaling 6,412 workers. Cairo, which ranks second, has a total number of workers of 3,211. Damietta on the other hand has a total of 1600 workers. A possible explanation for the discrepancies in the data presented above is that GOFI's statistics are based on a field survey conducted in 2003. The industrial registry database on the other hand only includes the number of workers declared by the factories during their application for a registration with the industrial registry. It can therefore be concluded that the data obtained from GOFI is more comprehensive than that provided by the Industrial Registry.

The total number of workers employed by workshops registered with furniture and woodworks cooperatives is 204,052. The hierarchy of governerates in descending order is Damietta (56,174 workers), Cairo (32,448 workers), Giza (14,928 workers) followed by Dakahleya (14,499 workers), Alexandria (11,607 workers), Gharbeya (10,630 workers) and Sharkeya (10,387 workers).

As with the number of entities, the available statistics covering number of workers employed by the furniture and woodworks sector can not serve as an actual representation of the labor force available to the sector. In this context, the following calculation has been made to come up with an indicative figure that would guide policy makers and businessmen in their planning and business development activities.


Estimation for the Total Number of Workers in the Furniture and Woodworks Industry Interviews with owners of factories and workshops have revealed that on average each

woodworks factory or workshop requires at least 5 workers in order to operate effectively. Furthermore, there is a considerable number of medium sized and large factories that employ larger numbers of workers (15 to over 100 employees). Based on the calculation made by the project team, the total number of furniture and woodworks entities was estimated to be 193,725. It therefore follows that the number of labor employed by the sector is at least 968,625 (number of entities x 5 workers). Graduates from Industrial Schools and Vocational Training Centres

Data provided by the Ministry of Education indicated that the total number of graduates from

industrial school related to furniture and woodworking increased from 90,959 in 1998 to 92,476 in 1999 and 94,072 in 2000. This was followed by a decrease to 91,786 in 2001 to be followed by a significant increase to 95,289 in 2002. According to the Ministry of Local Development, the overall number of vocational training centres' graduates with training in carpentry and furniture (5,989) is much larger than the number for trainees in inlaying and finishing (858). Furthermore, the total number of trainees has generally been declining with few fluctuations in the middle. In total, the number of trainees declined from 350 in 1995-1996 to 209 in 2002-2003. The number of graduates from the faculty of Applied Arts– Interior Design and Furniture Section also declined from 360 graduates in 1999-2000 to 155 in 2002-2003.

Value of Taxes charged on the Furniture & Woodworks Sector

According to the Ministry of Finance, the total value of taxes paid by the sector increased gradually from L.E. 39 million in 98/99 to reach L.E. 54 million in 2002/2003. The total amount of taxes paid by the wood furniture industry is higher than that paid by other furniture sub sectors. In 1998-1999 the total amount paid the wood furniture was L.E. 23 million while taxes paid by furniture (other) amounted to L.E. 16 million. The same trend prevails over the designated period with the wood furniture sub sector paying L.E. 32 million in 2002-2003 and the furniture (other) sub sector paying L.E. 22 million. Furthermore, the total number of furniture and woodworks tax payers are 108,825 entities while the estimated number of furniture and woodworks producers and traders is at least 193,725 (as indicated in section 2.13.2 of this report). It follows that 56% (if not less) of the sector bears the tax burden of the whole sector. Government and Household Consumption

According to the Ministry of Planning, during fiscal years 2000-2001 and 2001-2002, local production of wood furniture and wood works represented 98% of total consumption (imports represent less than 2%). Household consumption represents the largest market segment totaling L.E. 1,550 million in 2000-2001 and L.E. 1,756 million in 2001-2002. Household expenditure on wood furniture and woodworks is expected to rise even further in 2002-2003 and 2003-2004 to reach L.E. 1,851 million and L.E. 1947 million respectively. The second largest market segment is Intermediate Agents amounting to L.E. 236.7 million in 2000-2001 and L.E. 270 million in 2001-2002. It is forecasted that the value devoted to intermediaries will rise to L.E. 313.3 million and L.E. 329.5 million in 2002-2003 and 2003-2004 respectively. Government expenditure has also increased; from L.E. 30 million in 2000-2001 to L.E. 35.1 million in 2001-2002. Estimates for the Value of Tourist Industry's Consumption

Estimates of the value of furniture and woodworks consumption by the tourism industry

indicate that during the year 2002 and 2003 the total value of expenditure on hotel furnishing and refurbishment was around L.E. 1.2 Billion of which L.E. 612 million was allocated to furnishing


newly established rooms and L.E. 598 million was spent on refurbishment of existing rooms. It is worth pointing out that statistics covering the tourism industry's consumption of furniture were not available. The project team has therefore come up with the above mentioned estimates based on the capacity of hotels operating in Egypt.

International Industry for Furniture

World furniture production is estimated to be worth around US$180 billion a year. Around 60% of world’s furniture production takes place in just seven industrialized countries: the US, Germany, Italy, France, the UK, Japan and Canada. The European Union produces an estimated $65 billion a year, while the United States is the biggest single producer with around $45 billion output. Italy, Germany and Japan are trailing with amounts almost equal to $17-18 billion. France, the UK and Canada all record output levels between $5-7 billion.

Furniture production in emerging countries currently amounts to only 21% of the world total value. However, there are three countries (China, Mexico and Poland) where production is increasing rapidly thanks to recent investments in new plants especially designed and built for exports. The leading importers of furniture are the United States, Germany, France, the United Kingdom, Japan and Canada. The major exporters are Italy, Canada, Germany, China, the United States, Poland and France. Conclusions & Recommendations

The process of collecting, analyzing, and distributing data and statistics by information and statistics agencies, associations, and government departments is conducted through traditional techniques (using manual files systems, storing cabinets etc.). We are thus still very far away from using a ‘paper-less’ form of information collection and distribution. It is worth noting that according to recent estimation, “January 2003”, 90% of total statistics and information are produced by the government and government affiliated associations and agencies. Presidential resolution no. 2915 issued in 1964 is still the main resolution that governs data and statistics collection and publication. This resolution stipulates that the only legally recognized source of statistics is the Central Agency for Public Mobilization and Statistics – CAPMAS. It follows that no ministry or governmental department, public or private sector can issue or distribute any data without previous consent from CAPMAS. This resolution imposes very high degrees of restriction and hinders the development of data and statistics collection and distribution process in Egypt.

Against this background and in an attempt to improve the availability and reliability of data,

the National Democratic Party ‘Policies Secertariat’ appointed a team of experts who are currently studying the means and methods of modifying existing laws and regulation. The outcome of this will be compiled into a draft to be presented to parliament in the next session as part of the new ‘Freedom of Information Act’. An approval of this draft will hopefully bring forth more accurate and comprehensive data especially with regards to taxes, customs, licenses, information from the Commercial Registry the Investment Authority, the Ministry of International Cooperation etc. The development of more accurate and comprehensive data will place Egypt in a position where it is able to make sound decisions with regards to all aspects of society.

Discussions with key figures in the information sector including H.E. Dr. Ehab Elwy the Head

of the Central Agency for Public Mobilization and Statistics - CAPMAS, Dr. Raafat Radwan, the Head of the Information and Decision Support Centre – IDCS and Dr. Mostafa M. Mostafa, Consultant at the National Institute for Planning revealed that there is a general awareness of the importance of conducting sectoral studies based on the compilation of first hand information. These officials however confirmed that this study undertaken by the IMC and the Chamber of Woodworks is


the first initiative of its kind not only on the level of the furniture and woodworks sector but on the level of the Egyptian industry as whole. It should therefore serve as pilot project to be replicated in other major industrial sectors.

In this context, the project team proposes the development of a strategy for collecting and

compiling data on the furniture and woodworks industry that is based on the joint vision of the governmental bodies, representatives from the private sectors and NGOs. Such a strategy necessitates the establishment of a committee that includes experts from the tax and customs authorities, finance and monetary sectors, as well as industrialists and business associations etc. It is perceived that this strategy would result in the formulation and implementation of a pilot project for the furniture and woodworks sector that introduces state of the art data collection and sharing techniques. Such an initiative should eventually be applied on the level of the industrial sector as a whole.

The development of any industrial sector requires the implementation of a set of information

related activities to assist it in becoming more competitive in the local and international market. In other words, the compilation and processing of general information should serve as a first stage to be followed by the development and implementation of a comprehensive prioritized research plan. Areas requiring further investigation and research include the production capacity of the sector, the used furniture market, the ship building industry, the impact of demographic patterns on furniture and woodworks consumption, feeding industries etc.


Table of Contents

1. Introduction 1.1 Background Information 1.2 The Assignment 1.3 The Assignment Objectives 1.4 Methodology 2. Entities 2.1 Main sources of Information 2.2 Summary of Findings 2.3 Furniture and woodworks entities registered at the Industrial Registry 2.4 Furniture and woodworks entities according to the Industrial Map 2.5 Woodworking & furniture manufacturing entities according to the

General Organization for Industrialization (GOFI) 2.6 Comparison between data obtained from the Industrial Map and

The General Organization for Industrialization (GOFI) 2.7 Comparison between number of entities registered at the Industrial

Registry and the General Organization for Industrialization (GOFI) 2.8 Number of furniture and woodworks factories, workshops and traders according to

the Commercial Registry. 2.9 Furniture and woodworks feeding industries. 2.10 Workshops registered with furniture and woodworks cooperatives. 2.11 Number of Industrial Entities: Comparison between Commercial Registry Statistics and Ministry of Local Development Statistics 2.12 Factories affiliated to the National Organization for Military Production & the Arab Organization for Industrialization. 2.13 Estimation of the Aggregate Number of Furniture and Woodworks Entities in

Egypt. 3. Imports and Exports 3.1 Main sources of information 3.2 Summary of findings 3.3 Imports 3.3.1 Imports of wood and wood products HS 1992 Code # 44 3.3.2 Egyptian imports of furniture, HS 1992 # Code 44 3.3.3 Egyptian imports of intermediate products (feeding industries) 3.4 Exports 3.4.1 Exports of wood, wood products, wood charcoal – HS 1992 # 44 3.4.2 Egyptian exports of furniture, lightings, signs, prefabricated buildings

(HS 1996 Code # 44) 3.4.3 Furniture and woodworks entities benefiting from the drawback system 3.5 Observations and Recommendations

4. Labor 4.1 Main sources of information 4.2 Summary of Findings 4.3 The number of workers in the furniture and woodworks industry

1112131414

171717202426

27

29

31

414346

48

49

515252

58587487

9393

106120

121122122124


4.3.1 Workers in the furniture and woodworks industrial entities- GOFI 4.3.2 Workers in the furniture and woodworks industrial entities- Industrial Registry 4.3.3 Comparison between the figures for labor provided by GOFI and the Industrial

Registry 4.3.4 Number of workers registered with furniture and woodworks cooperatives –

Ministry of Local Development. 4.3.5 Furniture and woodworking entities and workers registered at Ministry

Of Insurance and Social Securities. 4.3.6 Estimation of the Total Number of Workers Employed by the Sector 4.4 Number of skilled workers and graduates with training of relevance to the

furniture and wood works industry 5. Customs and Taxes 5.1 Main sources of information 5.2 Summary of Findings 5.3 Customs, duties, sales tax, service fees paid by importers of wood and wood

products and furniture. 5.4 General Taxes 6. Consumption 6.1 Main sources of information 6.2 Summary of Findings 6.3 Local consumption of furniture and woodworks 6.4 Tourism capacity and consumption of woodworks and furniture 6.5 General overview of the International Furniture Market

7. Conclusion and Recommendation 8. Annex 1: List of Abbreviations

9. Annex 2: List of Tables

10. Annex 3: List of Egyptian Exporters of Wooden Furniture

11. Annex 4: List of Exporters Utilizing the Draw Back System

12. Annex 5: Forest products terminology

124125127

128

129

130131

139140140142

148

150151151152154158

183

185

186

190

196

199

1. Introduction



1. Introduction

This report, compiled by the Arab African Centre for Marketing and Consultancy services is representative of one of the preliminary efforts to create a comprehensive and updated source of information on the Woodworks sector in Egypt. This report is presented to the Industrial Modernisation Centre and the Chamber of Woodworks as fulfillment of the information requested in the terms of reference stipulated in the contract # DGIB/EGY/B7-4100/97/0733 initiated by IMC.

1.1. Background Information

Perhaps one of the largest obstacles inhibiting the growth of the Egyptian furniture and woodworks sector is the lack of updated, accurate and comprehensive data on the sector. Furthermore, available data is not accessible to the different groups involved in the industry and its related sub sectors. This problem can be broken down to three distinct but interrelated issues that need to be dealt with, including:

1. Existing data is unreliable, dated, and inconsistent. 2. Existing data is largely inaccessible to those involved in the sector. 3. Information gaps on the sector are too large, rendering most projects groundless in their

research base. A. Reliability of Existing Data The primary source of industry-level statistics is the Central Agency for Public Mobilization and Statistics - CAPMAS. This information often times needs to be supplemented by industry data from other government organizations such as the Ministry of Industry and Technological Development – MITD and its affiliated organizations, the Ministry of Foreign Trade – MOFT, local government authorities in the governorates, non government organizations such as chambers, federations and NGOs. Information is also made available by international development agencies such as the UNIDO. Problematic Data Gathering Methodology in Egypt The unreliability of existing data in Egypt is the direct result of a lacking system of coherent information gathering. While different governmental and non-governmental organizations collect and produce data on the sector, they do so with different classifications, thus resulting in a situation where categories of gathered information from different sources overlap and are ultimately not subject to comparison. Secondly a very large percentage of groups involved in the woodworks sector in Egypt are not officially registered at the competent government authorities and are thus not taken into account in national reports and statistics. The predicted size of the informal sector is so large as to render existing data unreliable and not representative of the actual size and scope of activities of the furniture and woodworks sector. The lack of reliable information about the existing competition, available resources both technical and human, input markets, the regulatory and policy environment etc. has in turn been a major obstacle towards the development and expansion of the sector as it makes it difficult for both local and international investors to make sound decisions. Finally, existing information is dated and does not take into account the changes of a rapidly globalizing and technologically advancing world. B. Inaccessibility of Existing Data The inaccessibility of information in Egypt exists on a twofold level:

1) Information in the form of statistics and reports on the sector are produced by very few organizations, mostly governmental that do not make the information easily accessible.


2) There is a lack of networking between the various groups involved in producing information on the sector and its related industries.

The lack of a networking mechanism between government authorities and information centres: The absence of a cooperation mechanism in information gathering and sharing among the various government and non-government authorities poses a large obstacle to the realization and implementation of coherent projects in the sector. The problem of networking exists on two levels that are largely related and reinforce each other. Firstly, the bureaucratic procedures of data collection from various governmental organizations are often tedious, time consuming, complex and costly. This largely limits the ability of those involved in the sector in making well informed decisions about their business strategies since producers and traders do not have the time or financial resources required to obtain updated information. It is also important to note that often times, information related to the sector are classified and are therefore inaccessible to the private sector. Secondly non-governmental organizations and the private sector tend to rely on their own sources of information on the sector and do not share their information with others. C. Information gaps on the sector are too large, rendering most projects groundless in their

research base. The overall result of the above mentioned factors is the existence of wide information gaps as well as the lack of a coherent understanding and presentation of the furniture and woodworks sector. For example, the information about the woodworks market for inputs, different sub-sectors, and service providers as well as human and technical resources is largely unavailable. The existence of such information gaps also raises the question of how this problem could be tackled as it brings to light the deficiencies in information gathering techniques and unmasks the tantamount importance of coming up with a mechanism that penetrates the informal sector.

1.2. The Assignment In light of the foregoing situation analysis, it became clear that a rapid, radical and extensive restructuring of the information gathering and compilation process employed by the furniture and woodworks industry is required in order to enable the sector to survive and succeed both in the local and international market. In this context, this assignment which aims at gathering the highly fragmented statistics and data published about the sector during the past 5 years was formulated by the Industrial Modernisation Centre (IMC) in response to the request made by the Chamber for Furniture and Woodworks. The terms of the contract stipulated that the consultant (Arab African Centre for Marketing and Consultancy Services – AAC) is to conduct the assignment under the supervision of IMC and the Chamber of Woodworks Industries (CWI).


1.3. Assignment Objectives This assignment has been formulated with the following main objectives: 1) The compilation of all available information and data on the Egyptian furniture and woodworking industry produced during the past 5 years as well as attempting to resolve the existing inconsistencies within collected data.

2) The contribution to the improvement of the availability and accessibility of information covering the woodworks sector by identifying information gaps and offering suggestions on how such information may be obtained.

The output of this assignment is to be compiled in a way that would facilitate its utilization by:

• Local and foreign investors manufacturers, traders and distributors in their decision making

process • Government officials in their planning and strategy development process • Industrial Development Organizations including IMC that will be enabled to formulate and

implement assistance programs that are in line with the needs of the industry

1.4. Methodology Given the size and complexity of the industrial sector, the methodology developed by the project team to achieve the above mentioned objectives involved conducting research on the furniture and woodworks industry that includes both primary and secondary research as well as analysis: b) Primary Research: The primary research undertaken involved the collection of first hand

information through meetings and interviews with representatives of government authorities and information providers including the following:

• Mr. Mohammed Abdel Gawad, the Commercial Registry • Dr. Fawzy Al-Refaii, the Academy for Scientific Research • The Arab Labor Organization • Mr. Taha Al-Shazly, the Wood Products Council • Mrs. Aisha Abdel Hady, Labor Representative /Egyptian Parliament • Gen. Mo'men Mekheimar, Head of the Trade Information Center • Dr. Mahmoud Eissa, Head of the General Authority for Standardization • Dr. Ali Abdel Nabi Mahmoud, the General Authority for Industrial Supervision • Mr. Sayed Taha, the Construction and Woodworking Labor Union • Gen. Mohamed Al Banaa, Head of the General Authority for Monitoring Exports and

Imports • The International Trade Point • The Ministry of Insurance and Social Affairs • Chem. Mohamed Helal, Head of the Agency of Production Sufficiency • Dr. Hussein Omran, First Under-Secretary, Ministry of Foreign Trade • Dr. Hany Al-Nazer, The National Research Institute • General Eng. Abdel-Moneim Al Shabkashi, Head of the General Authority for

Governmental Services • Mr. Mohamed Haroun, Ministry of Local Development


• Dr. Eng. Mohamed Abdel-Sallam El Husseiny, First Under-Secretary, Ministry of Manpower and Emigration

• Dr. Rafaat Radwan, Head of the Information and Decision Support Center (IDSC • Gen. Ehab Elwy, Head of the Central Authority for Public Mobilization and Statistics

– CAPMAS • Mr. Ahmed Waly, Head of Wood and Woodworking Chamber – Damietta • Dr. Ismael Awaad, Head of Furniture Department, Faculty of Applied Arts • Eng. Samia Zaki First undersecretary, General Authority for Industrialization –

Information Center • Dr. Mostafa Ahmed Mostafa, National Planning Institute • Dr. Bahaa El Din El Rayes, First Under-Secretary, Ministry of Industry and

Technological Development • Eng. Abbas Zaki, Temporary Head of the Chamber of Commerce • Mr. Mohamed Abdel- Reheem, First Under-Secretary/ General Association for

Investment and Free-trade Zones • Mr. Mohammed Al Sebai, Chairman of the Co-operative Productive Union

c) Desk Research: All secondary data sources that are relevant to the scope of the study were

collected and investigated. This information included all published data from: • Official authorities such as: the Central Agency for Public Mobilization and Statistics,

Relevant Ministries, Customs Department, Chamber of Commerce and Industry, and Embassies

• The information database available at AAC • Available data on the Internet • Relevant studies and reports conducted by other organizations

d) Analysis: The information gathered through this research process was assembled in a tabular

format to facilitate information retrieval and utilization. Furthermore the compiled data was analyzed and inconsistencies within the gathered information and information gathering techniques were identified. Finally, the project team came up with recommendations for the improvement of information gathering and processing techniques as well as means of filling the information gaps about the furniture and woodworks sector.

2. Entities



2. Entities 2.1. Main Sources of Information: The material gathered on the Furniture and Woodworking entities (factories and traders) was accumulated from a variety of sources including the following:

• The Industrial Registry Database • The Commercial Registry Database • The Information and Decision Support Centre Database • The Central Agency for Public Mobilization and Statistics • The General Organization for Industrialization • The Ministry of Local Development

Data has also been requested from other organizations that for a variety of reasons were unable to provide the required information. Such organizations include:

• The Chamber of Woodworks in Damietta • The Civil Registry

2.2. Summary of Findings

The section on entities presents data on the numbers of registered factories and workshops involved in the furniture and woodworks industry as well as the numbers of cooperatives and their geographic distribution, numbers of retailers and wholesalers. Information tackling each of the above mentioned components of the industry are presented separately. Furthermore, a comparison is made between data that follows a similar categorization in order to illustrate the inconsistencies from one source of information to another.

An overall analysis of the data obtained brings to light discrepancies in the data collection and information gathering process, ranging from incoherent methodologies to inconsistencies within the gathered data. Despite gaps and inconsistencies in the information gathered, certain assertions can be made about the furniture and woodworks industry in Egypt. Such include the following:

1. Cairo, Damietta, and Sharkeya are the centers of furniture and woodworks activity in Egypt 2. In terms of number of entities, furniture and woodworks activity is primarily dominated by

SMEs, however an investigation of production capacity is necessary in order to identify the market shares of large producers vs. SMEs.

3. Furniture and woodworks activity is primarily run by the private sector.

The Industrial Map and GOFI

According to information obtained from both the Industrial map and the General Organization for Industrialization – GOFI, Cairo, Damietta and Sharkeya appear as being the main centers of furniture and woodworks production with some disparities in the figures given. The Industrial Map classified information according to the size of entities, namely factories that employ more than 10 workers and factories that employ less than 10 workers. Based on this classification, Cairo emerged as having the largest number of factories (614), followed by Dammietta (527 factories) and Sharkeya (432 factories), El Monofeya (167 factories), Asuit (165 factories) and Gharbeya (106 factories). The GOFI study on the other hand presents Damieta as having the largest number of factories at 565, followed by Sharkeya at 515, Cairo at 481, and Giza at 156. The total number of factories presented by the Industrial Map is 2,465 while the total number of factories provided by the GOFI is 2,503. It is important to note that regardless of the different data gathering methodologies and the number


disparities, it is obvious that Cairo, Damieta, and Sharkeya are the centers of furniture and woodworks industry and that the sector is dominated primarily by SMEs. The Industrial Registry

Data obtained from the Industrial Registry also confirmed the above-mentioned trends however there were large number discrepancies between the sources in terms of the total number of entities. According to GOFI, the total number of furniture and woodworks factories is 2,501 while the number of factories obtained from the Industrial Registry is 1910, a difference of 599 (24%). Furthermore, the hierarchy of governorates in terms of number of entities in descending order according to GOFI is Damietta (565), Sharkeya (515) and Cairo (461), the Industrial Registry on the other hand presents Sharkeya (510) as having the largest number of entities followed by Damietta (506) and Cairo (285). Such number disparities should not exist since both sources are affiliates of the Ministry of Industry and presumably follow the same definition and classification of industrial entities.

The Commercial Registry

The data provided by the Commercial Registry also confirms the above-mentioned trends. According to the Commercial Registry, Cairo has the largest number of factories with capital more than L.E 50,000. Dammietta, however has the largest number of factories with capital less than L.E 50,000. The information revealed that there is a total of 54,097 companies producing furniture and woodworks final commodities, of which the production of wooden home furniture has the largest number of listed producers. The total number of furniture and woodworks wholesalers registered at the commercial registry is 8,012 of which 324 entities have invested capital worth more than L.E. 50,000 and 7688 have invested capital worth less than L.E. 50,000. The total number of furniture and woodworks retailers is 38,017, of which 783 have invested capital of more than L.E. 50,000 and 37234 with invested capital of less than L.E. 50,000. The Commercial Registry which was the only source that provided information on the furniture and woodworks feeding industries, revealed that there are a total of 8213 registered companies engaged in the production of intermediate products for the furniture and woodworks industry. It is worth noting however that this number does not reflect the actual size of this market segment since a large percentage of the furniture and woodworks producers of intermediate commodities are unregistered micro-enterprises that are therefore not accounted for in the Commercial Registry data base.

Entities Registered with Furniture and Woodworks Cooperatives

Information on the number of cooperatives and workshops registered with furniture and woodworks cooperatives reveals that Damietta has the highest concentration of workshops – 23,082, followed by Cairo – 14,163, followed by Dakahleya- 6,973 then Giza – 6,656.

Military Production of Furniture and Woodworks

Information on factories affiliated to the National Organization for Military Production and the Arab Organization for Industrialization revealed that Factory No. 54 had the highest value of production at L.E. 2,700,000 and employed 122 workers. The Motor Company's has the second highest value of production, employing 170 workers and producing furniture and woodworks commodities worth L.E. 1,965,000. The third highest value of production in this category is L.E. 1,250,000 by the Aviation Company which employs 135 workers.

Estimation of the Aggregate Number of Furniture and Woodworks Entities in Egypt

Based on the foregoing analysis of the statistics on entities obtained from the various government organizations, it has been observed that:


1- There is no single source of information in Egypt that provides comprehensive statistics regarding the total number of furniture and woodworks industrial establishments

2- The statistics obtained from the different organizations are overlapping and inconsistent; making it impossible to come up with an accurate figure for the total number of entities operating in the sector

Calculation of the Total Number of Woodworks and Furniture Entities Source No. of Entities Industrial Entities - Commercial Registry 60,465

Difference Between Commercial Registry Statistics & Ministry of Local Development Statistics - Industrial Entities 31,881 Wholesalers - Commercial Registry 8,012


Difference Between Commercial Registry Statistics & Ministry of Local Development Statistics = Number of entities registered at woodworks cooperatives – Number of entities registered at the Commercial Registry

Calculation of the Total Number of Registered and Unregistered Furniture and Woodworking Entities

Based on the calculation presented above, the total number of furniture and woodworks entities registered with the Egyptian government is estimated to be 138,375. It is widely known however, that the sector is dominated by informal entities that are not registered with any of the government organizations mentioned in this report. According to Economist Dr. Heba Handousa, the informal sector represents 77% of the non-agricultural private sector in Egypt1. Given that the furniture and woodworks sector is highly dominated by informal activity, it is believed that the informal furniture and wood works sector represents at least 40% of the activities undertaken by the industry i.e. 55,350 entities. Based on this assumption, the total number of furniture and woodworks entities would reach 193,725. It is worth noting however that these estimations are indicative and that in order to reach a more accurate figure that serves as an accurate representation of the size of the sector, extensive research is required. Calculations of the Value of Investment in the Furniture and Woodworks Sector Value of Investment for Registered Factories and Workshops

Interviews with members of the Chamber of Woodworking and other key figures in the sector has revealed that in order to operate, the smallest woodworks workshop requires more or less an invested capital of L.E. 5,000. It follows that the total value of investment within the woodworking industry would at least be L.E. 691 million. It is worth noting however, that a considerable number of furniture and woodworking entities operate on a large and sophisticated scale that necessitate investments worth over L.E 10 million. According to members of the Chamber of Woodworks, there are at least 100 factories operating on such a scale. Taking this into consideration would increase investments by L.E. 1 Billion (L.E. 10 million x 100 factories). The estimated value of investment would thus be L.E. 1,691 million.

1 Hebba Handousa "Employment, Budget Priorities and Microenterprises" The Egyptian Centre for Economic Studies, Working Paper No. 69 – June 2002


2.3. Furniture and Woodworks Entities Registered at the Industrial Registry 2.3.1 Introduction: This section illustrates the methodology used in collecting data regarding the number of factories registered at the Industrial Registry, the collected data presented in tabular and chart format, as well as a brief statistical analysis of the information obtained. Data Collection Process In response to the request made, the Industrial Registry has provided the following:

• Woodworks factories (ISIC Code 3311) o Total number of factories classified according to geographic location o Detailed list of factories including names and contact information

• Furniture factories (ISIC Code 3321) o Total number of factories classified according to geographic location o Detailed list of factories including names and contact information

• Upholstery Factories (ISIC Code 3322) o List of factories including names and contact information

It is worth noting that the following information has also been requested, however, it has been revealed that the way the Industrial Registry database has been developed does not allow for the retrieval of such information.

• The number of all registered factories serving as feeding industries to the furniture and woodworks

• number of factories registered over the period 1999 – 2003 (this information would have assisted the project team in determining the sector's rate of expansion)

2.3.2 General Analysis

In August 2003 the total number of Egyptian furniture and woodworking factories registered at the Industrial Registry was 1910, of which 985 factories were registered as woodworking factories (ISIC Code 3311) and 925 (ISIC Code 3321) were registered as furniture factories. The geographic locations with the highest concentration of furniture and woodworking factories in descending order are Sharkeya (510) and Damietta (506). While Sharkeya has the largest number of woodworks factories (267) followed by Damietta (219), Cairo (124), Daqahleya (74) and Giza (68); Damietta has the largest number of furniture factories (287) followed by Sharkeya (243), Cairo (161), Assuit (49) and Daqahleya (35).

The following tables and charts contain detailed statistics about the furniture and woodworks factories and their geographic distribution.

Table 1: Furniture & Woodworks Factories Registered

at the Industrial Registry

Governorate Woodworks

Factories (ISIC Code

3311)

Furniture Factories (ISIC

Code 3321)

Total Furniture & Woodworks

Factories

Sharkeya 267 243 510 Damietta 219 287 506 Cairo 124 161 285 Daqahleya 74 35 109 Giza 68 31 99 Assuit 44 49 93 Alexandria 42 24 66 Qalubeya 32 10 42 Sohag 7 34 41 El Menya 14 22 36 Gharbeya 20 10 30 Port Said 11 7 18 El Beheira 11 2 13 Ismailia 10 2 12 Other 48 2 50 Total 985 925 1910

Source: Industrial Registry Database (August 2003)

Graph 1: Geographic Distribution of Furniture & Woodworks Factories Registered at the Industrial Registry

Sharkeya26%

Gharbeya2%

Other3%

Ismailia1%Qalubeya

2%

El Beheira1%

El Menya2% Port Said

1%

Cairo15%

Daqahleya6%

Sohag2%

Damietta26%

Giza5%

Assuit5%

Alexandria3%


Table 2 : Woodworks Factories (ISIC code: 3311)

Registered at the Industrial Registry

Governorate Number of Entities

Percentage of total

Sharkeya 267 27.11% Damietta 219 22.23% Cairo 124 12.59% Giza 68 6.90% Alexandria 42 4.26% Dakahleya 74 7.51% Asuit 44 4.47% Port Said 11 1.12% Kalubeya 32 3.25% Gharbeya 20 2.03% Menya 14 1.42% Beheira 11 1.12% Ismailia 10 1.02% Red Sea 9 0.91% Kafr Al-Sheikh 8 0.81% Other 32 3.25%

Total 985 100.00% Industrial Registry Database (August 2003)

Graph 2: Geographic Distribution of woodworks Factories (ISIC code: 3311) Registered at the Industrial Registry

Menya1%Kalubeya

3%

Gharbeya2%

Asuit4%

Beheira1% Ismailia

1%

Port Said1%

Dakahleya8%

Alexandria4%

Giza7%

Cairo13%

Damietta22%

Sharkeya28%

Red Sea1%

Kafr Al-Sheikh1% Other

3%


Table 3 : Furniture Factories (ISIC code: 3321) Registered at the Industrial

Registry

Governorate Number of Entities

Percentage of total

Damietta 287 31.03% Sharkeya 243 26.27% Cairo 161 17.41% Assuit 49 5.30% Daqahleya 35 3.78% Sohag 34 3.68% Giza 31 3.35% Alexandria 24 2.59% El Minya 22 2.38% Kalubeya 10 1.08% Gharbeya 10 1.08% Port Said 7 0.76% Other 12 1.30% Total 925 100.00%

Industrial Registry Database (August 2003)

Graph 3 : Geographic Distribution of Furniture Factories (ISIC code: 3321) Registered at the Industrial Registry

El Minya2%

Alexandria3%Giza

3%

Daqahleya4%

Assuit5%

Sharkeya26%

Kalubeya1%

Port Said1%Other

1%Damietta

32%

Cairo17%

Sohag4%

Gharbeya1%



2.4. Furniture and Woodworks Entities according to the Industrial Map

2.4.1 Introduction: The Industrial Map is the output of a survey conducted by the General Organization for Industrialization and the Information Decision Support Centre in 2001. The survey which covered all of the main industrial sectors including furniture and woodworking is compiled in a CD that includes general statistics about each sector as well as the details and contact information of industrial companies. 2.4.2 General Analysis The following table which provides the geographic distribution of factories differentiated according to the number of workers employed reveals that the total number of factories employing less than 10 workers (1955 factories) is almost 4 times larger than the number of factories employing more than 10 workers (501 factories). Furthermore, Cairo (614 factories), Dammietta (527 factories) and Sharkeya (432 factories) are the centers of furniture and woodworks production followed by Al Monofeya (167 factories), Asuit (165 factories) and Gharbeya (106 factories).

Table 4 : Woodworks and Furniture Manufacturing entities Listed at the Industrial Map

Governorate

Factories with less than 10 workers (SMEs)

% of SMEs Factories with more than 10

workers Total

Cairo 432 70% 182 614 Dammietta 481 91% 46 527 Sharkeya 362 84% 70 432 Al Monofeya 146 87% 21 167 Asuit 144 87% 21 165 Al Gharbeya 95 90% 11 106 Giza 64 66% 33 97 Qalubeya 28 48% 30 58 Alexandria 17 32% 36 53 Dakahleya 36 72% 14 50 Menya 39 87% 6 45 Aswan 20 83% 4 24 Port Said 16 70% 7 23 Kafr El Sheikh 17 89% 2 19 Red Sea 14 88% 2 16 Other 31 66% 16 47

Total 1955 80% 501 2456 Source: Industrial Map (IDSC & GOFI)


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Cairo

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mie

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onof

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a

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ya

Asw

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Said

Kafr

El S

heikh

Red

Sea

Oth

er

Graph 4 : Geographic Distribution of Total Woodworks and Furniture Manufacturers listed at the Industrial Map

Industrial Map (IDSC & GOFI) 2.4.3 Comparison between Woodworks & Furniture Manufacturers with less and more than 10 workers According to the Industrial Map, Cairo (182 factories) has the largest number of furniture and woodworks factories with more than 10 workers, followed by Sharkeya (70 factories) Dammietta (46 factories) and Giza (33 factories). On the other hand, Dammietta (481 factories) has the largest number of furniture and woodworks factories and workshops employing less than 10 workers followed by Cairo (432 factories), Sharkeya (362) El Monofeya (146) and Assuit (144).

050

100150200250300350400450500

Cairo

Dam

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Shar

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Al M

onof

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heikh

Red

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Oth

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Graph 5: Comparison between Woodworks & Furniture Manufacturers withLess and More than 10

Factories w ith less than 10 w orkers (SMEs) Factories w ith more than 10 w orkers

2.5 Woodworking & Wood Furniture Manufacturing entities according to the General Organization for Industrialization – GOFI In 2003, GOFI conducted a survey with the aim of updating the information presented in the Industrial Map. The following table presents some of the results of this initiative namely the number of manufacturers of furniture and woodworks classified by geographic locations.

Woodworking and Furniture factories Registered at GOFI:5able T

Governorate No. of Entities Registered at GOFI

Damietta 565 Sharkeya 515 Cairo 461 Giza 156 Dakahleya 134 Alexandria 108 Gharbeya 93 Kalubeya 79 Beheira 30 Monofeya 29 Port Said 29 Kafr Al-Sheikh 19 Ismailia 15 Suez 6 Other 264

Total 2503

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Dam

ietta

Sharkeya

Cairo

Giza

Dakahleya

Alexandria

Gharbeya

Kalubeya

Beheira

Monofeya

Port S

aid

Kafr Al-S

heikh

Ismailia

Suez

Other

Graph 6: Furniture & Woodworking Factories Registered at GOFI



2.6 Comparison between data obtained from the Industrial Map and the General Organization for Industrialization - GOFI 2.6.1 Introduction: This section compares the figures provided by the Industrial Map (2001), on the number of furniture and woodworks entities with the figures provided by the GOFI/MITD (2003), in order to deduce a general trend on the furniture and woodworks industry. The following table and chart illustrate the disparities in the numbers obtained from the abovementioned sources of information. 2.6.2 General Analysis According to the statistics provided by the Industrial Map, Cairo had the largest number of factories (614), followed by Damietta (527), Sharkeya (432), and El Monofeya (167). The data obtained from GOFI presents Damieta as having the largest number of factories at 565, followed by Sharkeya at 515, Cairo at 481, and Giza at 156. The total number of factories presented by the Industrial Map is 2465 and the total number of factories provided by the MITD is 2503. Table 6: Discrepancies between data obtained from the Industrial Map and GOFI on

the total number of furniture and woodworks factories Governorate Industrial

Map GOFI Discrepancies

Cairo 614 461 153 Alexandria 53 108 -55 Port Said 23 29 -6 Suez 5 6 -1 Damietta 527 565 -38 Dakahleya 50 134 -84 Sharkeya 432 515 -83 Kalubeya 58 79 -21 Kafr Al-Sheikh 19 19 0 Gharbeya 106 93 13 Monofeya 167 29 138 Beheira 2 30 -28 Ismailia 6 15 -9 Giza 97 156 -59 Beni Sweif 8 11 -3 Al Fayoum 6 6 0 Menya 45 44 1 Asuit 165 102 63 Sohag 6 47 -41 Qena 8 10 -2 Aswan 24 24 0 Red Sea 16 9 7 the New Valley 2 1 1 Matrouh 4 1 3 North Sinai 13 10 3

Total 2456 2504 -48

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700

Cairo

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keya

Mon

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Ghar

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swan

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- ShRe

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aNo

rth S

inai

Othe

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Graph 7: Discrepancies between no. of entities registered at the Industrial Map & GOFI

Industrial Map GOFI

2.6.3 Observations Based on the information presented above, it has been observed that:

If the data presented above is taken as being reflective of the furniture and woodworks industry, it would appear that the hierarchy of furniture and woodworks centers has changed over the past two years. In 2001, Cairo appeared to be the center with 614 factories, followed by Damietta with 527 factories, Sharkeya with 432 factories. In 2003 the number of reported factories in Dammietta was 565 factories, Sharkeya - 515 factories, Cairo - 461 factories, Giza - 156 factories and Alexandria - 108 factories. It follows that according to the MITD survey Dammietta is currently the new center of furniture and woodworks production. El Monofeya has been dropped out of the hierarchy and is replaced by Cairo. Furthermore, Giza witnessed tremendous growth in the number of factories from 97 factories in 2001, to 156 factories in 2003. A similar increase occurred in Alexandria where the number of factories increased from 53 in 2001 to 108 in 2003. The statistics presented above also point to a general increase in the number of factories in all the governorates with the exception of Cairo and Gharbeya, that witnessed a decrease of 153 and 13 factories respectively. This decrease could be attributed to the following reasons:

• Some of the factories may have closed down. • A large proportion of unregistered factories may have been overlooked in 2003

It is important to note however that even though there is an overall increase in the number of factories between 2001 and 2003, one can not determine whether the sector is growing or not for the following reasons:

• The information provided does not specify the yearly size of the sector • It is difficult to identify a trend over such a short time span (a period of 2 years). • The increase of factories from 2001-2003 does not directly imply an increase in the

sector since these factories may have been overlooked in the first survey.



2.7 Comparison between no. of entities registered at the Industrial Registry & the General Organization for Industrialization 2.7.1 Introduction: The following table and charts compare statistics obtained from the General Organization for Industrialization (GOFI) with those obtained from the Industrial Registry. 2.7.2 General analysis: Given that both these organizations are affiliates of the Ministry of Industry and since they both follow similar methodologies in classifying entities, there should have been little discrepancies in the statistics obtained. However, a review of the data revealed that according to GOFI, the total number of furniture and woodworks factories is 2501 while the number of factories obtained from the Industrial Registry is 1910, a difference of 599. Furthermore, the hierarchy of governorates in terms of number of entities in descending order according to GOFI is Damietta , Sharkeya and Cairo, the Industrial Registry on the other hand presents Sharkeya as having the largest number of entities followed by Damietta and Cairo. GOFI data indicates that Damietta has 565 factories while the data obtained from the industrial registry indicates that it has 506 factories, a difference of 59 factories. The discrepancy in Cairo is even larger, as the number obtained from GOFI was 461 while the number obtained from the industrial registry was 285, a difference of 176. Table 7: Discrepancies between data obtained from the Industrial Registry and GOFI

Governorate No. of Entities

Registered at the GOFI

No. of Entities Registered at the Industrial

Registry Difference

Sharkeya 515 510 5 Damietta 565 506 59 Cairo 461 285 176 Daqahleya 134 109 25 Giza 156 99 57 Assuit 102 93 9 Alexandria 108 66 42 Qalubeya 79 42 37 Sohag 47 41 6 El Menya 44 36 8 Gharbeya 93 30 63 Port Said 29 18 11 El Beheira 30 13 17 Ismailia 15 12 3 Other 123 50 73

Total 2501 1910 591


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keya

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ietta

Cairo

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El M

enya

Ghar

beya

Port

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El B

ehei

raIsm

ailia

Othe

r

Graph 8 : Discrepancies between no. of entities registered at GOFI and the Industrial Registery

No. of Entities Registered at the GOFI No. of Entities Registered at the Industrial Registry

2.7.3 Observations Based on the information presented above, it has been observed that the discrepancy between the figures provided by GOFI and the Industrial Registry is very large. Such disparities could be a result of the following factors:

• The GOFI survey which indicates a larger number of factories on both the aggregate level and governorate level may have taken factories that are not registered with the Industrial Registry into account.

The consequences of such disparities with respects to this component of the assignment are the following:

a) The number disparity between the two sources alters the hierarchy of furniture and woodworks centers. According to the Industrial Registry, Sharkeya has the largest number of factories, to be followed by Damietta, Cairo then Dakahleya. According to GOFI, Damieta has the largest number of factories followed by Sharkeya, Cairo then Giza. This discrepancy demonstrates that we cannot calculate the size of the furniture and woodworks industry, nor can we specifically pin-point the size of activity within each governorate.

b) The only trend that can be deduced is that Damietta, Sharkeya, and Cairo emerge as having

the largest identified number of factories working within them.


2.8 Number of Furniture and Woodworks Factories, Workshops and Traders According to the Commercial Registry

2.8.1 Introduction This section provides an illustration of the methodology used in collecting data regarding the number of factories registered at the Commercial Registry, brief statistical analysis of the information obtained, as well as the collected data presented in tabular and chart form. Data Collection Process

The information presented below has been obtained from the Information and Decision Support Centre database (IDSC) which includes information about the total number of manufacturers and traders registered until the end of the year 2002. This information includes:

• The number of furniture and woodworks manufacturers classified by geographic location • The number of furniture and woodworks manufacturers classified by product • The number of retailers and wholesalers classified by geographic location • The number of entities producing intermediate products (feeding industries) classified by

product Furthermore, a list of industrial factories producing furniture and woodworks products including the names of owners and contact information has been obtained. 2.8.2 General Analysis Manufacturers According to the Commercial Registry database, Damietta emerges as having the largest total number of manufacturers 13097, followed by Cairo at 8402, Dakahleya at 4350, and Alexandria at 4182. It is important to note that in Dammietta 13077 of the manufacturers have a reported invested capital of less than L.E. 50,000 and only 20 companies have investments worth more than L.E. 50,000. In Cairo on the other hand, 252 of the registered factories have capital investments worth more than L.E. 50,000 and 8150 companies have capital investment worth less than L.E. 50,000. This discrepancy in number indicates that while Dammietta has a larger number of producers on the aggregate level, Cairo hosts a larger number of producers with declared invested capital worth more than L.E. 50,000. Furthermore, a considerable percentage of the activity of the furniture and woodworks industry takes place on a small and micro-level. It is important to note however, that in order to come up with the actual contribution of SMEs versus larger scale factories, statistics regarding the production capacity of each of these sectors is necessary. Unfortunately such data and especially the total production of SMEs is lacking.

2.8.3 Factories Registered at the Commercial Registry The following table illustrates the geographic distribution of furniture and woodworks producers categorized by geographic location. The statistics differentiate between entities with capital more than L.E. 50,000 and capital less than L.E. 50,000. An analysis of the statistics reveals that Damietta emerges as having the largest total number of entities 13097, followed by Cairo at 8402, Dakahleya at 4350, and Alexandria at 4182. It also shows that there is a large difference in the total number within each category, with the category "entities with capital less than L.E. 50,000" having a much larger total number of entities than the category "entities with capital more than L.E. 50,000".

Table 8: Furniture and woodworks factories registered at the commercial registery (With capital > 50,000 L.E. and capital < 50,000)

Governorate Number of factories with Capital > 50,000 L.E.

Number of factories with Capital < 50,000 L.E. Total

Aswan 20 796 816 Asiout 42 2026 2068 Alexandria 121 4061 4182 Ismailia 19 514 533 Red Sea 2 212 214 Beheira 11 1257 1268 Giza 183 2100 2283 Dakahleya 37 4313 4350 Suez 5 892 897 Sharkeya 80 3507 3587 Gharbeya 25 4619 4644 Fayoum 2 1072 1074 Cairo 252 8150 8402 Qaloubeya 39 1887 1926 Monofeya 48 2412 2460 Menya 16 1757 1773 New Valley 3 300 303 Beni Sweif 1 996 997 Port Said 9 595 604 South Sinai 1 27 28 Damietta 20 13077 13097 Sohag 30 2002 2032 North Sinai 1 185 186 Qena 8 1484 1492 Kafr El Sheikh 11 1089 1100 Matrouh 2 147 149

Total 988 59477 60465


Aswan1% Asiout

3%Qena

2%Sohag3%

New Valley1%

Monofeya4% Cairo

14%

Matrouh0%

Alexandria7%

Giza4%

Dakahleya7%

Beheira2%

Red Sea0%

Ismailia1%

Suez1%

Sharkeya6%

Gharbeya8%Fayoum

2%

Damietta22%

Port Said1%

Beni Sweif2%

Menya3%

Qaloubeya3%

Kafr El Sheikh2%

Graph 9 : Geographic Distribution of Furniture and Woodworking factories and workshops registered at the commercial registry

2.8.3.1 Factories and Workshops with Capital Larger than L.E. 50,000 According to the Commercial Registry Database, Cairo (252 companies) emerges as having the largest number of factories with investments of more than L.E. 50,000, followed by Giza (183 companies), Alexandria (121 companies) and Sharkeya (80 companies). This category is broken down into Investment Companies with Cairo having 48, to be followed by Giza 41, then Assuit at 25. Similarly, Cairo had the largest number of private sector companies 203, to be followed by Giza at 142, and Alexandria at 106.

) ,00050Capital >(Furniture and Woodworking Factories : 9Table Registered at the Commercial Registry

Governorate Investment Company Private Public Total

Cairo 48 203 1 252 Giza 41 142 183 Alexandria 15 106 121 Sharkeya 22 58 80 Monofeya 7 41 48 Asiout 25 17 42 Qaloubeya 3 36 39 Dakahleya 1 36 37 Sohag 2 28 30 Gharbeya 25 25 Damietta 3 17 20 Aswan 20 20 Ismailia 3 16 19 Menya 9 7 16 Beheira 3 8 11 Kafr El Sheikh 2 9 11 Port Said 6 3 9 Other 6 19 25

Total 196 791 1 988

Graph 10: Geographic Distribution of factories with capital > L.E. 50,000 registered at the commercial registry

Menya2%

Beheira1%

Ismailia2%Aswan

2%Damietta2%

Sohag3%

Gharbeya3%

Qaloubeya4%

Dakahleya4%

Asiout4% Monofeya

5% Sharkeya8%

Cairo26%

Giza19%

Alexandria12%

Kafr El Sheikh1%

Port Said1%Other3%


2.8.3.2 Factories and Workshops with Capital Less than L.E. 50,000 Within the category of entities with invested capital less than L.E 50,000, Damietta has the largest total number of entities (13,077), followed by Cairo 8,150, Gharbeya 4,619, and Dakahleya 4,313. While Damietta has the largest number of private entities estimated at 13,065, followed by Cairo at 8,089, Gharbeya (4,606), then Alexandria at 4,045; Cairo has the largest number of investment companies 59, followed by Giza 25, Alexandria 15 and Gharbeya 13. According to the Commercial Registry Database, Cairo, Gharbeya, and Ismalia are the only three governorates that have cooperative societies (one in each). Furthermore, Dakahleya emerges as having the largest number of multinationals (2 factories), followed equally by each of Alexandria, Port Said, Cairo, and Damietta that include one multinational each. It is important to note that the total number of cooperatives reported appears to be unrealistically small, suggesting that there might be central cooperatives and other affiliates in some governorates that are not registered with the Commercial Registry.

registered at the ) ,00050Capital <(Furniture and woodworking factories : 10Table Commercial Registry

Furniture and Woodworking factories and workshops (Capital < 50,000 L.E.)

Governorate Investment Cooperative Societies Private Multinational Total

Damietta 11 13065 1 13077Cairo 59 1 8089 1 8150 Dakahleya 8 4303 2 4313 Gharbeya 13 4606 4619 Alexandria 15 4045 1 4061 Sharkeya 12 3495 3507 Monofeya 9 2403 2412 Giza 25 2075 2100 Asiout 8 2018 2026 Menya 2 1755 1757 Qena 7 1477 1484 Sohag 7 1995 2002 Qaloubeya 9 1 1877 1887 Beheira 1 1256 1257 Kafr El Sheikh 4 1085 1089 Fayoum 11 1061 1072 Beni Sweif 2 994 996 Suez 6 886 892 Aswan 1 795 796 Other 10 1 1968 1980

Total 220 3 59248 6 59477

Graph 11: Geographic Distribution of factories with capital < L.E. 50,000 registered at the

commercial registry

Beheira2%

Kafr El Sheikh2%

Fayoum2%

Beni Sw eif2%

Qaloubeya3%

Sohag3%

Other3%

Asw an1%

Suez1%

Gharbeya8%

Dakahleya7%

Cairo14%

Damietta22%

Alexandria7%

Sharkeya6%

Monofeya4%

Asiout3%

Giza4%

Menya3%

Qena2%



2.8.4. Furniture and Woodworks Companies Classified by Product According to the Commercial Registry, there is a total of 54,097 companies producing furniture and woodworks final commodities, (producers of intermediate commodities are not included in the following table) of which the production of wooden home furniture has the largest number of listed producers, a total of 13,730 companies, followed by carpentry workshops, 11,541, wood and woodworking activities, 10,767 wood cutting, sawing and sanding 3,492 and furniture finishing 3,483. It is worth noting that to avoid duplication; each company is registered once under its main area of production. In other words, companies registered under the production of wooden home furniture could be engaged in the manufacturing of other products as well. Another problem with the numbers is that the terminology used in classifying companies is ambiguous making it difficult to determine the scope of work of companies.

Table 11: Furniture & Woodworks Entities classified by Product Category

Activity Investment Company

Cooperati-ve

Societies Private Multinational Public Total

Wooden home furniture 99 13628 3 13730 Carpentry workshops 42 2 11496 1 11541 Wood and woodworking activities 36 10729 1 1 10767 Wood cutting, sawing and sanding 7 3485 3492 Furniture finishing 6 3477 3483

Un-mechanized carpentry workshops 4 3003 1 3008 Wooden doors and windows manufacturing 28 1113 1141 Wood and woodworking activities 28 1 989 1018

Furniture parts manufacturing 24 790 814 Wood sawing for production of wood blocks 2 800 802

Wood and wooden furniture manufacturing - other activities 17 570 587

Glass photo frames manufacturing 3 571 574

Wooden photo frames manufacturing 4 565 569 Wooden chairs manufacturing 5 235 240

Other wood and woodworking activities 5 125 235

Furniture and fixtures 34 177 211

Ship building and maintenance 196

Wooden kitchen furniture 7 144 151

Bamboo furniture 145 145

Wood carving products 111 111 Wooden baskets, boxes and utensils 2 106 108 Broomsticks and floor coverings 105

Wood and cork products 5 97 102

Wooden kitchen equipment 87 87

Floating hotels Boats, ferries, yachts and sailboats building and maintenance 85 Furniture mending, renovation and restoration 1 79 80

Furniture and fixtures for schools 4 75 79

Mechanized melamine production 70

School equipment 59 59

Wooden shoe frames 2 52 54

Umbrellas and walking sticks 53

Wooden flooring manufacturing 5 47 52


Category

Activity Investment Company

Cooperati-ve

Societies Private Multinational Public Total

Coffin manufacturing 37 37

Carriage, push-carts and hand carts 37

Furniture and fixtures for buildings and houses 1 35 36

Wooden clothes hangers manufacturing 1 27 28

Music instruments 29

Pencils 15 Medical and surgical tables - Hospital furniture 7 Other 7 152 159

Total 379 3 53006 6 1 54097Source: Commercial Registry

Observations: An examination of the data presented above reveals that in general, the number of entities registered within each product category tends to be small in comparison to the overall size of the market (demand and consumption) as well as the growth trends of the industrial sector as a whole. For example:

• The figure for entities producing furniture and fixtures for schools (79 entities) is far too small to satisfy local market needs.

• The number of factories producing furniture fixtures for buildings and houses (36 entities) is too small to satisfy the construction sector.

• The number of factories involved in the production of medical and surgical tables – hospital furniture (7 entities) is far too small to satisfy both public and private hospital requirements.

These low figures can be a result of a combination of the following factors: 1- A significant proportion of entities do not register with the commercial registry 2- The actual number of entities might actually be small in comparison to the market segment they cater for

Graph 12: Distribution of furniture and woodworking entities registered at the commercial registry by product

1%1%1%1%2%2%2%6%

6%

25%

21%

20%

6%

1%>1%

Wooden home furniture Carpentry w orkshopsWood and w oodw orking activities Wood cutting, saw ing and sandingFurniture f inishing Un-mechanized carpentry w orkshopsWooden doors and w indow s manufacturing Wood and w oodw orking activitiesFurniture parts manufacturing Wood saw ing for production of w ood blocksWood and w ooden furniture manufacturing - other activities Glass photo frames manufacturingWooden photo frames manufacturing Wooden chairs manufacturingOther w ood and w oodw orking activities Furniture and fixtures Ship building and maintainance Wooden kitchen furnitureBamboo furniture Wood carving productsWooden baskets, boxes and utensils Broomsticks and floor coveringsWood and cork products Wooden kitchen equipmentFloating hotels Boats, ferries, yachts and sailboats building and maintainnce Furniture mending, renovation and restoration Furniture and fixtures for schools Mechanized milamine productionOther

2.8.5 Furniture and Woodworking Wholesalers and Retailers Classified by Geographic Location 2.8.5.1 Furniture and Woodworking Wholesalers classified by geographic location The total number of furniture and woodworks wholesalers registered at the Commercial Registry is 8,012 of which 324 entities have invested capital worth more than L.E. 50,000 and 7688 have invested capital worth less than L.E. 50,000. Cairo has the largest number of entities (1,373) followed by Alexandria (949), Qena (645), Dakahleya (559), Gharbeya (526), Giza (449) and (Damietta (440). The concentration of SMEs varies from one geographic location to another, however, in general, the number of wholesalers with invested capital worth more than L.E. 50,000 is less than 10%.

Table 12: Furniture and Woodworking Wholesalers registered at the Commercial Registry (Capital > 50,000 L.E.) (Capital < 50,000 L.E.)

Governorate Investment Private Multinational Total Investment Cooperative Societies Private Public Total Grand Total

Wholesalers Aswan 8 8 1 143 144 152 Asiout 1 8 9 256 256 265 Alexandria 5 44 49 900 900 949 Ismailia 9 9 2 96 98 107 Red Sea 1 1 24 24 25 Beheira 3 3 214 214 217 Giza 14 53 67 5 377 382 449 Dakahleya 20 1 21 538 538 559 Suez 3 107 110 110 Sharkeya 1 14 15 418 418 433 Gharbeya 15 15 1 510 511 526 Fayoum 1 1 10 216 226 227 Cairo 8 58 66 6 1301 1307 1373 Qaloubeya 20 20 1 283 284 304 Monofeya 4 5 9 248 248 257 Menya 1 1 200 200 201 New Valley 2 2 11 11 13 Beni Sweif 1 102 103 103 Port Said 2 2 4 85 1 87 91 South Sinai 1 5 6 6 Damietta 8 8 1 431 432 440 Sohag 9 9 1 319 320 329

(Capital > 50,000 L.E.) (Capital < 50,000 L.E.) North Sinai 2 2 51 51 53 Qena 2 2 3 640 643 645 Kafr El Sheikh 3 3 162 1 163 166 Matrouh 12 12 12

Total 35 288 1 324 36 1 7649 2 7688 8012

Graph 13: Geographic Distribution of Furniture and Woodworking Wholesalers registered at the commercial registry

Port Said1%

Sohag4%

North Sinai1%

Qena8%

Kafr El Sheikh2%

Aswan2% Asiout

3%

Beheira3%

Giza6%

Dakahleya7%Suez

1%Sharkeya

5%Gharbeya7%

Fayoum3%

Monofeya3%

Qaloubeya4% Cairo

17%

Alexandria12%

Menya3%

Beni Sweif1%

Damietta5%

Ismailia1%


2.8.5.2 Furniture and Woodworking Retailers Classified by Geographic Location

The total number of furniture and woodworks retailers is 38,017, of which 783 have invested capital of more than L.E. 50,000 and 37234 with invested capital of less than L.E. 50,000. Cairo has the largest number of retailers (7899) followed by Dammietta (7899), Alexandria (4169), Gharbeya (2443) and Dakahleya (2442). It is important to note that as with the case of wholesalers, regardless of the geographic location, the majority of retailers are privately owned. Furthermore, the percentage of SMEs is over 90%.

Table 13: Furniture and Woodworking Retailers registered at the commercial registry (Capital > 50,000 L.E.) (Capital < 50,000 L.E.)

Governorate Investment Cooperative Societies Private Public Total Investm-

ent Private Multinat-ional Public Total Total

Retailers Aswan 16 16 5 447 452 468 Asiout 4 6 10 6 1427 2 1435 1445 Alexandria 6 123 129 22 4016 2 4040 4169 Ismailia 12 12 3 573 576 588 Red Sea 1 1 108 108 109 Beheira 11 11 5 1111 1116 1127 Giza 7 1 155 163 12 1841 1853 2016 Dakahleya 23 23 3 2413 3 2419 2442 Suez 4 4 6 830 836 840 Sharkeya 2 23 25 4 1820 1 1825 1850 Gharbeya 21 21 11 2411 2422 2443 Fayoum 2 2 3 838 841 843 Cairo 9 239 1 249 54 7590 6 7650 7899 Qaloubeya 23 23 8 1188 1196 1219 Monofeya 11 11 2 926 928 939 Menya 1 8 9 3 780 783 792 New Valley 1 1 99 99 100 Beni Sweif 3 3 4 792 796 799 Port Said 13 13 1 716 1 718 731 South Sinai 1 1 22 22 23 Damietta 1 21 22 13 4451 4464 4486 Sohag 23 23 2 958 960 983 North Sinai 2 2 1 226 2 229 231 Qena 3 3 3 656 659 662 Kafr El Sheikh 5 5 4 719 723 728 Matrouh 1 1 2 82 84 85

Total 30 1 751 1 783 177 37040 12 3 37234 38017


Graph 14: Geographic Distribution of Furniture and Woodworking Retailers registered at the commercial registry

Qena2%

Sohag3%

North Sinai1%

Kafr El Sheikh2% Aswan

1% Asiout4%

Port Said2%

Damietta12%

Beni Sweif2%Menya

2%

Monofeya2%

Qaloubeya3%

Alexandria11%

Beheira3%

Dakahleya6%

Suez2%Sharkeya

5%Gharbeya6%

Cairo21%

Fayoum2%

Giza5%

Ismailia2%


2.9 Furniture and Woodworks Feeding Industries According to the Commercial Registry database, there are a total of 8213 companies engaged in the production of intermediate products for the furniture and woodworks industry. Out of this total number, 5681 companies are engaged in various forms of upholstery activities, 698 produce paints and varnishes and 512 are engaged in furniture gilding. Furthermore there are 123 producing woodworking machinery, 126 producing accessories and fixtures and 126 companies producing adhesives and glues. It is worth noting however, that a large percentage of the furniture and woodworks feeding industry are unregistered micro-enterprises that are not accounted for in the commercial registry data base. It follows that the numbers presented above do not provide an accurate representation of the sector.

Table: 14 Furniture & Woodworks Feeding Industries

Activity Total Number of Entities

Upholstery 1687

Furniture Upholstering 2452

Car seats upholstering 1089 Paints and varnishes 597 Upholstery – Other Activities 93 Furniture Gilding 512 Mattresses and cushions upholstering 453 Spinning and weaving equipment 258 Nails 221 Plywood and straw manufacturing 139 Woodworking machinery 123 Shoes and Floors varnishes 89 Veneer wood manufacturing 69 Adhesives 68 Pasting materials other than adhesives 58 Door locks 50 Abrasives 48 Sponge mattresses 41 Furniture and fixtures other than metal and upholstery 38

Doors and other Hinges 36

Pressed and particle board manufacturing 26


Activity Total Number of Entities

Door Knobs 18 Furniture packaging and packing 14 Glues 13 Furniture and metal polishers 12 Panel board manufacturing 9

Total 8213

Graph 15: Distribution of Wood and woodworking Feeding entities registered at the commercial registry classified by product

0%

1% 0%1% 1%0% 0% 0% 0%0%

0%0%

1%1%

1%1%

1%2%

3%

3%

6%

6%

7%13%

30%

21%

Upholstery Furniture UpholsteringCar seats upholstering Paints and varnishesFurniture Gilding Mattresses and cushions upholsteringSpinning and weaving equipment NailsPlywood and straw manufacturing Woodworking machineryUpholstery - other activities Shoes and Floors varnishesVeneer wood manufacturing AdhesivesPasting materials other than adhesives Door locksAbrasives Sponge mattresses Furniture and fixtures other than metal and upholstery Doors and other HingesPressed and particle board manufacturing Door KnobsFurniture packaging and packing GluesFurniture and metal polishers Panel board manufacturing

Observations: An examination of the data presented above reveals that in general, the number of entities registered within each product category tends to be small in comparison to the overall size of the market (demand and consumption) as well as the growth trends of the industrial sector as a whole. For example:

• the number of factories involved in car seats upholstering is very small compared to automobile production as a whole.

• The number of factories producing mattresses, and cushions upholstering are very few compared to the increasing size of the population.

These low figures can be a result of a combination of the following factors: 1- A significant proportion of entities do not register with the commercial registry 2- The actual number of entities might actually be small in comparison to the market segment they cater for


2.10 Workshops Registered with Furniture & Woodworks Cooperatives The following table presents figures on the number of workshops registered with cooperatives in all governorates according to the Ministry of local development. The data provided, reveals that the total number of workshops is 89,612. Damietta has the highest concentration of workshops – 23,082, followed by Cairo – 14,163, followed by Dakahleya- 6,973 then Giza – 6,656. It is important to note the large difference in the number of workshops between Damietta and Cairo (difference of 8919 workshops). Such data enables us to locate and map woodworking and furniture activities as well as to geographically place and identify the size of the entities involved in the sector. Table 15: Numbers of Workshops registered in Furniture & Woodworks Cooperatives

Governorate No. of Workshops Cairo 14163Alexandria 5600Port Said 469Suez 730Dammieta 23082Dakahleya 6973Sharkeya 4812Qalubeya 3887Kafr El Sheikh 1783Gharbeya 4599El Monofeya 2705El Beheira 3174Ismalia 728Giza 6656Beni Sueif 880Fayoum 2073Menya 1933Assuit 1360Sohag 1399Qena 1107Aswan 655Luxor 347Red Sea 119New Valley 105Matrouh 104North Sinai 151Sothern Sinai 18Total 89612

Source: Ministry of Local Development


Graph 16: No. of Furniture & Woodworks Workshops registered with the Cooperative Socieities

Kafr El Sheikh; 1783Sohag; 1399

Assuit; 1360

Qena; 1107

Beni Sueif; 880Suez; 730

Ismalia; 728

Asw an; 655 Luxor; 347Port Said; 469

Alexandria; 5600

Sharkeya; 4812 Giza; 6656Gharbeya; 4599

Qalubeya; 3887

El Beheira; 3174

El Monofeya; 2705

Fayoum; 2073Menya; 1933

Cairo; 14163

Dakahleya; 6973

Matrouh; 104

New Valley; 105

Red Sea; 119

Dammieta; 23082Sothern Sinai; 18

North Sinai; 151

2.10.1 Number of Furniture Cooperatives per Governorate The following table presents figures obtained from the Ministry of Local Development on the number of furniture cooperatives per governorate. According to this data, the highest concentration of cooperatives is located in Giza (5), followed by Cairo (4) and Kafr El Sheikh (4), followed by Dakahleya (3), then Damietta (2). The remaining listed governorates have one cooperative each. It is interesting to note that despite the fact that Damietta has the largest number of workshops registered with cooperatives as illustrated in table 15, it only has two cooperative societies within it.

Table 16: Number of Furniture Cooperatives/ Governorate

Governorate No. Cooperative Societies

Cairo 4Giza 5Alexandria 1Monofeya 1Gharbeya 1Kafr El Sheikh 4Dammieta 2Dakahleya 3North Sinai 1Port Said 1Ismalia 1Suez 1Sharkeya 1Fayoum 1Menya 1Assuit 1Sohag 1Total 30


Graph 17:

Furniture Cooperatives Societies per Governerate

Cairo; 4

Giza; 5

Alexandria; 1

Monofeya; 1

Gharbeya; 1

Dakahleya; 3

North Sinai; 1

Port Said; 1

Ismalia; 1

Suez; 1

Sharkeya; 1

Fayoum; 1

Menya; 1

Assuit; 1

Sohag; 1

Dammieta; 2Kafr El Sheikh; 4

Observations on the Number of Cooperatives and Entities Registered with them: An examination of the data collected from the Ministry of Local Development on the number of cooperatives and entities registered with them reveals the following: • The number of workshops registered in cooperative societies is very large when compared to the number of cooperatives. For example, in Damietta there are only two cooperatives catering for 23,082 workshops. In Cairo on the other hand there are 4 cooperatives catering for 14,163 workshops. A similar trend can be detected with regards to all the other major governorates. • When we compare these figures with the table 10 provided by the Commercial Registry, large disparities become apparent. According to table 10 on ‘Furniture and Woodworking factories (capital less than L.E 50,000 and capital more than L.E 50,000) the total number of cooperatives is three, with one in each of Damietta, Cairo, and one in the category of ‘other’. Such discrepancies between sources illustrates that further research is needed on this particular aspect of ‘entities’. • It is important to note that the cooperative law and its regulations are currently under discussion by the Shaab council for amendments requested by the various parties working in this field.


2.11 Number of Industrial Entities: Comparison between Commercial Registry Statistics and Ministry of Local Development Statistics

A comparison between the data provided by the Commercial Registry and the Ministry of Local Development on the number of entities (factories and workshops) reveals huge discrepancies in the number of industrial entities both on the aggregate level and the level of each governorate. According to the Ministry of Local Development, the total number of workshops is 89,612 while the number of factories and workshops registered at the Commercial Registry is 60,465; a difference of 31,881. A possible explanation for this discrepancy is that while a considerable number of entities registered at the Commercial Registry are also registered with furniture and woodworks cooperatives; not all entities are registered with both organizations.

Table 17: Comparison Between Statistics on Workshops obtained from the Commercial Registry and the Ministry of Local Development

Governorate

No. of Workshops Ministry of Local Development

No. of Factories & Workshops - Commercial Registry Difference

Dammieta 23082 13097 9985 Cairo 14163 8402 5761 Dakahleya 6973 4350 2623 Giza 6656 2283 4373 Alexandria 5600 4182 1418 Sharkeya 4812 3587 1225 Gharbeya 4599 4644 Qalubeya 3887 1926 1961 El Beheira 3174 1268 1906 El Monofeya 2705 2460 245 Fayoum 2073 1074 999 Menya 1933 1773 160 Kafr El Sheikh 1783 1100 683 Sohag 1399 2032 Assuit 1360 2068 Qena 1107 1492 Beni Sueif 880 997 Suez 730 897 Ismalia 728 533 195 Aswan 655 816 Port Said 469 604 Luxor 347 347 North Sinai 151 186 Red Sea 119 214 New Valley 105 303 Matrouh 104 149 Sothern Sinai 18 28 Total 89612 60465 31881


An Examination of the figures received from the Ministry of Local Development and the Commercial Registry reveals great discrepancies. In most cases, the figure provided by the Ministry of local Development is larger than that provided by the Commercial Registry. For example, the number of workshops registered with furniture and woodworks cooperatives in Dammietta, Cairo and Dakhahleya are 23,082, 14,163 and 6,973 respectively. The number of entities registered at the commercial registry is 13,097 for Dammietta, 8,402 for Cairo and 4,350 in Dakahleya. The same phenomenon prevails in most of the other governorates as well. Graph 18:

0

5000

10000

15000

20000

25000

No.

of E

ntiti

es

Damm

ieta

Cairo

Dakahleya

Giza

Alexandria

Sharkeya

Gharbeya

Qalubeya

El Beheira

El Monofeya

Fayoum

Menya

Kafr El Sheikh

Sohag

Assuit

Qena

Beni Sueif

Suez

Ismalia

Asw

an

Port Said

Luxor

North Sinai

Red Sea

New V

alley

Matrouh

Sothern Sinai

Comparison Between Statistics on Entities (Commercial Registry Vs. Cooperatives)

No. of Workshops Ministry of Local Development No. of Factories & Workshops - Commercial Registry


2.12 Factories affiliated to the National Organization for Military Production & the Arab Organization for Industrialization. There are five affiliates of the National Organization of Military Production and the Arab Organization for Industrialization engaged in the production of furniture and woodworks. During the fiscal year 2002-2003, Factory No. 54 had the highest value of production at L.E. 2,700,000 and employed 122 workers. It is worth pointing out that Factory No. 54 has entered into an agreement with the Ministry of Managerial Development and the Ministry of Local Development for the manufacturing of Kiosks. In 2002, 15 Kiosks with the value of L.E. 241,200 have been manufactured. In 2003, 196 kiosks with the value of L.E. 3,156,000 have been manufactured. To date, total sales of this project were 330 kiosks with the value of L.E. 5,314,000. The Motor Company's which has the second highest value of production, employed 170 workers and produced furniture and woodworks commodities worth L.E. 1,965,000 during 2002-2003. The third highest value of production in this category was L.E. 1,250,000 by the Aviation Company which employs 135 workers. Figures for Sakr and Kader companies on the other hand were L.E. 810,000; 70 employees and L.E. 595,000; 45 employees respectively.

Table 18: Military Production of Furniture & Woodworks, Fiscal Year 2002-2003

Name of Company Planned

Production Actual

Production Sales Number of

Employees Aviation Company

1,250,000

1,155,000

996,000

135

Sakr Company 750,000 810,000 760,000 70 Motor Company 2,000,000 1,965,000 1,905,000 170 Kader Company 600,000 595,000 605,000 45 Factory No. 54 2,700,000 122

Value in L.E

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Val

ue in

L.E

.

Aviation CompanySakr Company

Motor Company

Kader Company

Factory No. 54

Graph 19: Military Production of Furniture & Woodworks


2.13 Estimation of the Aggregate Number of Furniture and Woodworks Entities in Egypt. 2.13.1 Calculation of the Total Number of Woodworks and Furniture Entities Registered with the Egyptian Government

Based on the foregoing analysis of the statistics obtained from the various government organizations, it has been observed that:

1. There is no single source of information in Egypt that provides comprehensive statistics regarding the total number of furniture and woodworks industrial establishments

2. The statistics obtained from the different organizations namely the Ministry of Industry, the Commercial Registry, the Central Agency for Public Mobilization and Statistics and the Ministry of Local Development are overlapping and inconsistent; making it impossible to come up with an accurate figure for the total number of entities operating in the sector

3. The most comprehensive figures were provided by the Commercial Registry and the Ministry of Local Development. However, adding up the figures would result in duplication in numbers since a considerable number of workshops registered with furniture and woodworks cooperatives (Ministry of Local Development) are also registered with the Commercial Registry.

In this context, the following calculation is made to come up with an indicative estimation of the total number of entities operating in the sector.

Table 19: Calculation of the Total Number of Woodworks and Furniture Entities Source No. of Entities

Industrial Entities - Commercial Registry 60,465

Difference Between Commercial Registry Statistics & Ministry of Local Development Statistics - Industrial Entities 31,881

Wholesalers - Commercial Registry 8,012


It is worth pointing out that:

1- Statistics provided by the Ministry of Industry have not been used in calculating the total number of entities based on the fact that most of these entities are also registered at the Commercial Registry. Including them would thus result in duplication of numbers.

2- The difference between the number of entities registered at the furniture and

woodworks cooperatives and the number of entities registered at the Commercial Registry has been arrived at using the following formula:

Difference = Number of entities registered at woodworks cooperatives – Number of entities registered at the Commercial Registry


2.13.2 Calculation of the Total Number of Registered and Unregistered Furniture and Woodworking Entities

Based on the calculation presented in the previous page, the total number of furniture and woodworks entities registered with the Egyptian government is estimated to be 138,375. It is widely known however, that the sector is dominated by informal entities that are not registered with any of the government organizations mentioned in this report. It is therefore perceived that the actual total number of entities is much larger. According to Economist Dr. Heba Handousa, the informal sector represents 77% of the non-agricultural private sector in Egypt2. Given that the furniture and woodworks sector is highly dominated by informal activity, it is believed that the informal furniture and wood works sector represents at least 40% of the activities undertaken by the industry i.e. 55,350 entities. Based on this assumption, the total number of furniture and woodworks entities would reach 193,725 (138,375 registered entities + 55,350 unregistered entities). It is worth noting however that these estimations are indicative and that in order to reach a more accurate figure that serves as an accurate representation of the size of the sector, extensive research is required. 2.13.3 Calculations of the Value of Investment in the Furniture and Woodworks Sector

Value of Investment for Registered Factories and Workshops Interviews with members of the Chamber of Woodworking and other key figures in the sector has revealed that in order to operate, the smallest woodworks workshop requires more or less an invested capital of at L.E. 5,000. It follows that the total value of investment within the woodworking industry would at least be L.E. 691 million.

Total number of registered entities x minimum capital investment = value of investment 138,375 entities x L.E. 5,000 = L.E. 691 million

It is worth noting however, that a considerable number of furniture and woodworking entities operate on a large and sophisticated scale that necessitate investments worth over L.E 10 million. According to members of the Chamber of Woodworks, there are at least 100 factories operating on such a scale. Taking this into consideration would increase investments by L.E. 1 Billion (L.E. 10 million x 100 factories). The estimated value of investment would thus be L.E. 1,691 million.

Value of investment for total number of registered entities + Value of investment for largest 100 factories

L.E. 691 million + L.E. 1,000 million = L.E. 1,691 million Value of investment for unregistered workshops Based on the estimations presented earlier, the size of the informal furniture and woodworks sector is 55,350 entities. Given that the minimum capital requirements to operate within the sector were estimated at L.E. 5,000, the value of investment within the informal sector would be L.E. 277 million.

Estimated Number of Informal Entities x Minimum Capital Required for Operation 55,350 entities x L.E. 5,000 = L.E. 277 million

It would thus be safe to presume that the total value of investment in the furniture and woodworks sector is at least L.E. 2 Billion if not more. Estimates of Investment for Registered Entities + Estimates of Investment for Unregistered Entities L.E. 1, 691 million + L.E. 277 million = LE. 1, 968 million

2 Hebba Handousa "Employment, Budget Priorities and Microenterprises" The Egyptian Centre for Economic Studies, Working Paper No. 69 – June 2002


3. Imports & Exports

51

52

3. Imports and Exports of Wood, Wood Products and Furniture

3.1 Main Sources of Information: The material gathered on the imports and exports of wood, wood products and furniture were accumulated from a variety of sources including the following:

• The Central Agency for Public Mobilization and Statistics – CAPMAS • The Ministry of Foreign Trade – MOFT • The International Trade Point – ITP • The International Trade Centre – ITC • The United Nations Statistics Division – UNSTATS • The Kompass

It is worth noting that:

• Information provided by MOFT and ITP have originally been obtained from CAPMAS, making it ultimately the sole Egyptian source of statistics covering imports and exports.

• Statistics covering imports and exports from a "foreign perspective" have been primarily obtained from the United Nations Statistics Division – UNSTATS website which lists the flow of trade in commodities as reported by each of the UN member states.

3.2Summary of Findings 3.2.1 Imports

Data on the Egyptian imports of furniture and woodworks collected from the above mentioned organizations was divided into three main categories namely Egyptian Imports of Wood and Wood Products – HS 1996 (Code # 44),Egyptian Imports of Furniture, HS1996 (Code# 94) and Egyptian Imports of intermediary products. Egyptian Imports of Wood & Wood Products (HS 1996 Code 44) as Reported by Egyptian Organizations

Egyptian Imports of wood as reported by the Egyptian government, have increased from US$ 606,400,000 in 1999 to US$ 617,000,000 in 2000. This trend however was dramatically reversed in 2001 when imports decreased by 7.5% due to poor economic conditions. This was followed by a 4% decline in 2002. The data obtained reveals that Egypt's main sources of wood inputs in descending order are, Russia, Finland, Sweden, Romania and Indonesia. It is worth noting that while a general trend may be deduced from the given data, this trend hides discrepancies between the different types of raw wood. Within this general trend there have been some increases in the importation of certain products over the years such as veneer ply sheets, fiberboard, and panel board. The increase in importation of certain products versus the decrease in others may be attributed to the following:

• The scarcity of wood and the deteriorating exchange rate has lead to a considerable increase in prices, resulting in decreased importation and consequently decreased consumption of natural wood.

• Although the demand for artificial wood is still considerably low, the increase in the prices of natural wood, and changes in consumer tastes have increased the demand for this category.

Egyptian Imports of Wood & Wood Products (HS 1996 Code 44) as Reported by the United Nations Statistics Division Egyptian Imports of Raw Wood and Wood Products (HS1996 Code # 44) as Reported by Foreign Sources revealed that there has been a general decline in total imports between 1999 and

53

2002 (with only the year 2000 witnessing an increase). The data obtained presented Europe (both EU and Non EU as being the main source of Egyptian imports followed by Asia then the Arab countries. Comparison between Egyptian and Foreign Data

A Comparison between Egyptian and Foreign Sources of Statistics for Imports of Raw Wood and Wood Products (HS1996 Code # 44) presented a shared general trend of Egyptian imports over the years, (increase in imports in 2000, and a decline in 2001). However there is a large disparity in the figures, the numbers provided by the MOFT being much larger than those presented by UNSTATS. Egyptian Imports of Furniture, HS1996 Code# 94 Egyptian Imports of Wooden Furniture – Egyptian Statistics

Data on Egyptian Imports of Wooden Furniture as presented by the Ministry of Foreign Trade (MOFT) revealed that from 1999- 2002, Egyptian imports of wooden furniture have generally been on the rise (US$ 6.1 million in 1999, US$ 9 million in 2002) with a decrease in 2001. In general the largest percentage of imports fell within the Other Wooden Furniture Category (US$3.3 million in 1999, US5.3 million in 2000, US$4.9 million in 2001 and US$6.6 million in 2002). The data also reveals that the second largest category of wood furniture imports is office furniture to be followed bedroom furniture then kitchen furniture.

Data on Egyptian Imports of Wooden Furniture obtained from the CAPMAS and ITP also revealed that the period from 1999 to 2002 witnessed an overall increase in imports, with the years 2001 witnessing a slight decline. Egypt's main sources of imports as shown by the data are Italy and the United States. Egyptian Imports of Furniture, Lighting, Signs and Prefabricated Buildings, HS1992 Code# 94 – Egyptian Statistics

Total Egyptian imports of Furniture, lighting, signs, prefabricated buildings (HS1992 Code # 94) obtained from Egyptian sources revealed a decline in total imports during 1999 and 2000 followed by an exceptional increase in 2001 and a small increase in 2002. Noticeable increases were found in the categories of 'wooden furniture and office furniture', 'Chandeliers and Other lighting Fixtures' and of 'Prefabricated buildings and Other Materials. Comparison between Egyptian and Foreign Data

The comparison between the Egyptian statistics and the foreign statistic on Egyptian imports of Furniture, HS1996 Code # 94 revealed that these sources are similar in terms of the general trend they provide. Overall, according to both sources, there has been a decline in the amounts imported, with the year 2000 witnessing the only increase in imports. Also according to both sources, the main sources of imports are the European Union, Europe (other) and North America- NAFTA. While the overall trend appears to be the same, there are large number disparities between the two sources of information with the Foreign Statistics (UNSTATS) being much higher than those of CAPMAS and MOFT. Data about Egyptian imports of intermediate products including paints, adhesives, abrasives, nails etc are also provided

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3.2.2 Exports The data included in this report on the Egyptian exports of furniture and woodworks is divided into two main categories mainly Egyptian exports of Wood and Wood Products – HS 1996 (Code # 44) and Egyptian exports of Furniture, Lighting, Signs and Prefabricated Buildings HS1996 (Code# 94). Egyptian Exports of Wood and Wood Products (HS 1996 Code 44) Classified by Region – as reported by the Egyptian Government

An analysis of the data reveals that overall, Egyptian exports of wood, wood products and charcoal have gone through several fluctuations over the designated period; decreasing from US$ 3.8 million in 1998 to US$ 2.4 million in 1999. This decline was followed by an increase to US$ 3.6 million in 2000 and US$ 5.8 in 2001. Total exports decreased again in 2002 to reach US$ 3.3 million. A comparison of the values of 1998 and 2002 reveal an overall decline of 11%. Egyptian Exports of Wood, Wood Products (HS 1996 Code 44) Classified by Region as reported by the Egyptian Government

In 1998 the Arab Region (US$ 1.61 million) was the larges export market for wood and wood products followed by Asia (US$ 0.97 million) and the EU (US$0.6 million). In 1999, the Arab Region (US$1.29 million) was again the largest market followed by the EU (US$0.44 million), Asia (US$.09 million) and North America (US$ 0.08 million). In 2000, the Arab Region (US$ 1.29 million) was the largest market followed by the EU (US$1.38 million) and Asia (US$ 0.22 million). The trend was changed in 2001 where North America imported the highest value (US $ 2.08 million) followed by the EU (US$ 1.61 million) and the Arab Region (US$ 1.61 million). In 2002, the Arab Region regained its position as the largest export market (US$ 2.4 million) followed by the EU (US$ 0.51 million) and North America (US$ 0.04 million). Egyptian Exports of Raw wood and Wood products (HS1996 Code # 44) as Reported by the United Nations Statistics Division (UNSTATS)

The data obtained from the United Nations Statistics Division covering Egyptian exports of raw wood and wood products by region and by country indicated that overall, exports have declined throughout the period, with total exports in 1999 amounting to $ 4,494, 557, declining to $ 4,232,796 in 2000 and $ 3,158,473 in 2001. The data reveals that the greatest amount of Egyptian exports is received by the European Union (US$ 1.9 million in 1999, US$ 1.2 million in 2000 and US$ 1.1 million in 2001) and the Arab region (US$ 1.3 million in 1999, US$ 1.6 million in 2000 and US$ 1.1 million in 2001). Asia is also an important market for Egyptian wood and wood products, with total exports of US$ 0.8 million in 1999, US$ 0.6 million in 2000 and US$ 0.3 million in 2002.

Comparison between Egyptian and Foreign Sources of Statistics for Exports of Raw Wood and Wood Products (HS1996 Code # 44)

According to both the Ministry of Foreign trade and the United Nations Statistics Division, Egyptian exports of wood, and wood products have declined between 1999 and 2001, however the figures from both sources display large discrepancies with respects to their presentation of the decline. Statistics obtained from the Ministry of Foreign Trade indicate that exports increased from US$ 2.4 million in 1999 to reach US$ 3.6 million in 2000. This was followed by an increase to US$ 5.8 million in 2001. The United Nations Statistics Division on the other hand indicated that exports decreased from US$4.5 million in 1999 to US$ 4.2 million in 2000 and US$ 3.158 million in 2001. Such discrepancies could be a result of several factors including the fact that the statistics obtained from MOFT were more comprehensive in terms of the countries reported. On the other hand, UNSTATS

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data included only countries that hold a membership at the United Nations. In this context, an analysis on a region and country level is necessary to come up with a more reliable analysis. Egyptian Exports of Furniture Lighting, Signs, Prefabricated Buildings (HS 1996 Code# 94) Egyptian Exports of Wooden Furniture Classified by Product

The data obtained from the CAPMAS and ITP on Egyptian exports of wooden furniture reveals that during the period of 1999-2002 there has been an overall increase in total exports from US$ 15.1 million in 1999 to US$ 18.4 million in 2002. It is worth noting however that there was a decline in exports in the year 2000 (US$ 14.3 million) and 2001 (US$ 12.8 million). An examination of the exportation patterns of specific products reveals that exports of both Office furniture and 'Bedroom Furniture' increased steadily over the designated period. The category of 'Wood furniture – Other' on the other hand dropped significantly over the period. Egyptian Exports of Wooden Furniture Classified by country

It has been observed that Saudi Arabia and the United States are among Egypt's main export markets. It is worth noting however that export patterns have been different for both countries over the designated period. While exports to Saudi Arabia have witnessed an overall increase, exports to the United States have generally declined over the period.

Egyptian Exports of Furniture Lighting, Signs, Prefabricated Buildings classified by Region (HS 1996 Code # 94) – Egyptian Statistics

The data on Egyptian exports of Furniture, lighting, signs, and prefabricated buildings revealed that exports have witnessed an overall increase between 1998 and 2002. Total exports increased from US$ 18.31 million in 1998 US$ 19.25 million in 1999. This was followed by a decline to US$ 18.65 million in 2000 followed by a further decline to US$ 16.5 million in 2001. In 2002 however, total exports witnessed a significant increase to US$ 21.62 million in 2002. The largest amounts are exported went to Arab countries followed by the European Union and North America –NAFTA.

Egyptian Exports of Furniture Lighting, Signs, Prefabricated Buildings classified by Region – Foreign Statistics

According to the United Nations Statistics Division website, Egyptian exports of Furniture, lighting, signs and prefabricated building (HS 1996 Code # 94) have increased between 1998 and 2001. In 1998 total exports amounted to $ 48,925,823, this was followed by an increase in 1999 to $ 56,758,604, followed by an increase in 2000 to $ 57,266,055, followed by a slight decline in 2001 to $ 56,357,316. Comparison between Egyptian and Foreign Sources of Statistics for Exports of Furniture Lighting, Signs, Prefabricated Buildings (HS1996 Code # 94) A comparison of the data provided by the Ministry of Foreign Trade and the United Nations Statistics Division on Egyptian exports of Furniture, Lighting, Signs and Prefabricated Buildings reveals large discrepancies between the sources not only in terms of the figure provided for each region, but also in terms of the general pattern of exportation as a whole. UNSTATS statistics for total exports are higher than those provided by MOFT by 210 % in 1999, 107% in 2000 and 242% in 2001.

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3.2.3 Observations & Recommendations Observations Having gone through a process of information gathering, it has been realized that:

1- While the Ministry of Foreign Trade issues publications tackling the Egyptian trade flows on both the aggregate and commodity level, statistics are obtained from the Central Agency for Public Mobilization and Statistics

2- The data published by CAMPAS covering trade flows is initially obtained from the General Tax Authority – Ministry of Finance

A general examination of the statistics gathered on imports and exports reveals the following:

1- The system used by the Customs and Tax Authorities and CAPMAS are unreliable, raising questions regarding the accuracy of the data being published. The Customs Authority does not abide with the international coding and classification system while documenting trade flows. As a consequence, statistics forwarded to the CAPMAS tend to be lacking in terms of reliability, making statistics published by government authorities inaccurate and unrepresentative of actual trade flows.

2- A comparison between Egyptian and International sources statistics on Egyptian trade in wood and wood products (HS 1996 code 44) and furniture and prefabricated buildings (HS 1996 code 94) has indeed revealed great discrepancies with foreign statistics usually presenting Egyptian imports and exports to be much higher than the statistics provided by Egyptian authorities. These discrepancies could also be a result of one or a combination of the following factors:

a. Under invoicing by exporters and importers b. Price adjustments at the customs authorities of importing countries which result in

number discrepancies with the official statistics produced by the exporting countries c. Inaccurate documentation by the government authorities

3- A comparison between the figures reported for the money value of exported wooden furniture

and the quantity exported revealed that statistics are unreasonable. For example, the export value of wooden furniture (HS Code 9403600000) was US$6.2 million in 1999. This value corresponded to exported quantity of 4,224 ton. It follows, that on average, the price of 1 ton of wooden furniture exports is US$ 1,467. This figure is very low when compared to the input prices and cost of production. The same phenomenon can be depicted with other kinds of furniture as well. This discrepancy between the quantity of exports and the money value can be explained by the fact that to evade payment of custom duties, most exporters do not report the actual value of their exports. According to the Chamber of Woodworks, the real value of exports is sometimes 10 times as high as the reported value.

Recommendations Measures should be taken by the Egyptian government to improve the process of information gathering and processing. This in turn entails the following:

1- the development of a documentation system at the customs and tax authority that is in line with international standards and practices formulated by the United Nations

2- the provision of technical and financial support to the CAPMAS in order to upgrade the information gathering and processing techniques that are currently being utilized

3.3 Imports

57

58

3.3. Imports 3.3.1 Imports of Wood and Wood Products – HS 1996 Code # 44 A. Egyptian Imports of Wood and Wood Products classified by Product, HS1996 Code # 44

The statistics presented below which illustrate Egypt's imports of wood and wood products over the period 1998-2002 have been obtained from the Ministry of Foreign Trade Information Department (MOFT). It is worth noting however that statistics following the same classification have also been obtained from the International Trade Point (ITP) and CAPMAS. With the exception of a few minor discrepancies, the data obtained from the above-mentioned organizations was consistent. The general trend for the importation of wood and wood products for the period 1998-2002, reveals an overall decline in imports. Coniferous Lumber: Imports of Coniferous Lumber declined from US$443.3 million in 1998 to US$369.3 million in 1999. This was followed by an increase to US$ 388 million in 2000, which was followed by steady declines to US$ 321.6 million and US$ 311 million in 2001 and 2002 respectively. Overall the amount of imports of Coniferous lumber in 2002 were lower by 30% when compared to 1998. Beech Lumber: There was also a decline in the imported Beech lumber lengthwise chipped from US$ 91.66 million in 1998 to US$ 80.35 million in 1999, followed by a steady increase in 2000 and 2001 to US$80.35 million and US$88.2 million respectively. This increase was followed by a decline to US$ 83 million in 2002. Overall the amount of imports were lower in 2002 by 9.5% when compared to 1998. Plywood: With regards to plywood, there was a decline from US$74.18 million in 1998 to US$54.5 in 1999, followed by a steady increase in imports to US$63.16 million, US$72 million and US$75.31 million in 2000, 2001 and 2002 respectively. However, the increase in imports in 2002 is minimal (1.5%) when compared to 1998. Veneer Ply sheets: There was a decline in the imported veneer ply sheets from US$14.07 million in 1998 to US$ 12.22 million in 1999, followed by a further decline to US 12.08 million in 2000, and an increase to US$17.15 million and US$ 20.31 million in 2001 and 2002 respectively. Overall there has been an increase in the imports of this category of wood with the amount of imports in 2002 being 44.4% higher than the amount imported in 1998. Coniferous Logs & Poles: Imports of logs and poles, witnessed an increase in the value of imports from US$30.52 million in 1998 to US$ 31.99 million in 1999, followed by steady declines to US$ 25.17 million, US$18.17 million and US$ 17.52 million in 2000, 2001, and 2002 respectively. Overall there has been a decline of 42.6% in the value of imports in 2002 when compared to those of 1998. Fiberboard: With regards to Fiberboard, there was a slight decline from US$2.47 million in 1998 to US$ 2.44 million in 1999, followed by a steady increase to US$8.21 million, US$8.93 million and US$ 10.96 million in 2000, 2001 and 2002 respectively. Overall, this category witnessed significant increase in the value of imports over the designated period. Oak: Imports of Oak lumber witnessed an increase from US$10.78 million in 1998 to US$ 15.05 million in 1999, followed by a decline to US$9.55 million and US$ 7.33 million in 2000 and 2001. This decline was followed by an increase to US$8.7 million in 2002. However, there is an overall

59

decline in the imports of this category of wood, when the amount imported in 1998 is compared to the amount imported in 2002. Panels: The importation of panel board witnessed a similar trend i.e. an increase in imports from US$ 4.84 million in 1998 to US$ 6.53 million in 1999, followed by a decline to US$4.67 million in 2000, followed by an increase to US$8.47 million in 2001, followed by a decline to US$ 6.07 million in 2002. However, there is an overall increase in the value of imports by 135% when comparing the statistics of 2002 versus those of 1998. Main Trends: The two following main trends can be depicted from the information presented below:

• Natural sources of wood such as oak and lumber remain the most highly demanded sources of wood inputs for the Egyptian furniture and woodworks industry

• The scarcity of wood and deteriorating exchange rate has lead to a considerable increase in prices resulting in decreased importation and consequently decreased consumption of natural wood.

• Although the demand for artificial wood is still considerably low, the increase in the prices of natural wood and changes in consumer tastes have increased the demand for this category.

Table 20: Egyptian Imports of wood, wood products, wood, classified by Product, HS1996 Code # 44

Code Product Name 98 99 2000 2001 2002

4407100000

Lumber, coniferous (softwood) thickness < 6 mm 443.40 369.32 388.05 321.56 311.23

4407920000

Beech lumber, lengthwise chipped, thickness > 6mm 91.66 80.35 83.20 88.00 82.97

4412190000

Plywood consisting solely of sheets of wood, each ply not exceeding 6 mm thickness, not conifer or tropical 74.18 54.45 63.16 72.02 75.31

4408909000

Veneer, ply sheet, not conifer or tropical, <6 mm thick 14.07 12.22 12.08 17.15 20.31

4403201000

Logs, poles, coniferous not treated or painted, squared 30.52 31.99 25.14 18.17 17.52

4411210000

Fiberboard of a density exceeding 0.5 g/cm3 but not exceeding 0.8 g/cm3; Not mechanically worked or surface covered 2.47 2.44 8.21 8.93 10.96

4407910000

Oak lumber, lengthwise chipped, thickness > 6mm 10.78 15.05 9.55 7.33 8.70

4412290000

Panels with at least one outer ply of non-coniferous wood 4.84 6.53 4.67 8.47 6.07

Other 35.03 32.15 23.09 23.53 16.44

Total/US$ 706.95 604.50 617.15 565.16 549.51

Total/ton 2,096,572 5,037 5,9176 69,384 76,354 Source: MOFT

Graph 20:

0.00

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98 99 2000 2001 2002

Egyptian Imports of Wood, Wood products & Charcoal (HS 1996 Code 44)

4407100000 4407920000 4412190000 4408909000 4403201000 4411210000 4407910000

4412290000 Other

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61

Egyptian imports of wood classified by country as reported by the Egyptian Government Total imports of Wood inputs have increased from US$ 606,400,000 in 1999 to US$617,000,000 in 2000. This trend has been reversed where due to negative economic conditions imports decreased by 7.5% to US$ 571,100,000 in 2001 and 4% to US$ 549,500,000 in 2002. It is worth noting however that this general trend hides discrepancies between the different types of raw wood. For example, while imports of lengthwise chipped wood, conifer lumber and oak witnessed a decrease, imports of beech wood remained steady. In addition although imports of fiberboard represent only a small percentage of total imports, it has witnessed a steady increase especially in 2001 and 2002. Furthermore, statistics indicate that Russia is the only country witnessing a steady increase in the total amounts of wood exports to Egypt. Egypt's main sources of wood inputs in descending order are, Russia, Finland, Sweden, Romania and Indonesia. The following table illustrates Egypt's imports of various types of wood over the period 1999-2002 categorized by country of origin.

Table 21: Egyptian Imports of Each type of raw wood classified by country (US$ 000,000) Type of wood

Country Year

Lengthwise chipped

wood

Beech wood Plywood

Conifer lumber

squared & unsquared

Ply sheets (Not

tropical)

Oak

Fiberboard (worked &

not worked)

Other Total

1999 87.3 1.6 17.4 0.1 0.1 0.5 0.7 2.6 110.3 2000 102.2 0.5 21.6 0 0 0.1 1.2 0.7 126.3 2001 99.3 2.3 27.6 0 0 0 1.9 0.9 132

Russia

2002 115 0.3 29.2 0.5 0 0.2 2.2 0.6 148 1999 104 0.8 0.4 19.4 0 0.6 0 0.4 125.6 2000 98.4 0.1 0.2 17.3 0.1 0.2 0 0.2 116.5 2001 86.7 0.9 0.1 12.6 0 0 0 0 100.3

Finland

2002 75.5 0.3 0.1 12.7 0 0 0 0 88.6 1999 133.9 0.4 0 2.5 0.1 0 0.7 0 137.6 2000 118.1 0 0 1.3 0 0 0 2 121.4 2001 90.3 0.9 0 3 0 0 0.2 0 94.4

Sweden

2002 74 0 0 1.4 0 0 0.1 0.5 76 1999 33.8 41 4.8 6.7 0.7 3.9 0.1 2.1 93.1 2000 36.7 55.1 8.2 3.2 0 0.5 0.1 2.1 105.9 2001 18 54.6 5.1 0.2 0 0.6 0.8 1.4 80.7

Romania

2002 17.2 51.5 4.2 0 0 0.6 3 0.3 76.8 1999 0.4 2.5 26.9 0 0.6 0.1 1.9 6.6 39 2000 0 0.1 26.3 0 0 0 0 7.2 33.6 2001 0 0.1 25.5 0 0 0 2.5 7.5 35.6

Indonesia

2002 0 0 18.3 0 0 0 0.3 6 24.6 1999 0 0 1.4 0 0 0 0.7 0.1 2.2 2000 1.3 0 2 0 0 0 0 0 3.3 2001 0 0.8 11.2 0 0 0 1 0.2 13.2

Malaysia

2002 0 0 21.6 0 0 0 0.2 0.2 22 1999 0 3.2 0 0 0 2 0 0.1 5.3 2000 0.1 6.6 0 0 0 1.8 0 0 8.5 2001 0.6 8 0 0 0 2.5 0.1 0 11.2

Croatia

2002 1.5 15.4 0 0.1 0 4.2 0.1 0 21.3 1999 4 0 0 0.4 0 0 0 0 4.4 2000 11 0 0 0.2 0 0 0 0 11.2 2001 10 0.2 0 0.4 0 0 0 0.4 11

Estonia

2002 18 0 0 2 0 0 0 0 20

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Type of wood

Lengthwise chipped

wood

Beech wood Plywood

Conifer lumber

squared & unsquared

Ply sheets (Not

tropical)

Oak

Fiberboard (worked &

not worked)

Other Total

1999 0.8 0 0 0.3 2.1 6.5 0 1.5 11.2 2000 2.7 0.2 0.3 0 3.5 4.1 0.2 1.6 12.6 2001 2.7 0 0 0 4.1 2.4 0 0.7 9.9

USA

2002 1 0 0 0 5.3 1.5 0.2 0.3 8.3 1999 1 11 0 0 0 0.6 0 0.4 13 2000 0 10 0 0 0 1 0 0 11 2001 0 9.8 0.1 0.1 0 0.3 0 0 10.3

Bosnia and

Herzegovina 2002 0 6.5 0 0 0 0.2 0 0.3 7 1999 0.1 0.4 0.1 0 0.7 0 0 0.1 1.4 2000 0 0.1 0.1 0 1.6 0 0 0.2 2 2001 0.1 0 0 0 5.7 0 1.1 0.1 7

Turkey

2002 0.1 0 0 0 6.3 0 0 0 6.4 1999 0 0.7 0.3 0 2.4 0 0.2 1.8 5.4 2000 0 0 0.1 0 3 0 0.1 2.5 5.7 2001 0 0 0 0 3 0 2 0 5

Spain

2002 0 0.2 0 0 2.4 0 3 0 5.6 1999 0 1.1 0 0 0 0 0 0 1.1 2000 6.4 1.2 0 0 0 0.3 0 0.1 8 2001 0.5 0.2 0 0 0 0 0 0.1 0.8

Czech Republic

2002 3.4 1 0 0.3 0 0.5 0 0 5.2 1999 13.9 17 3.4 4.7 5.3 1 0 11.5 56.8 2000 11.7 9.3 3.5 3.1 3.9 1.6 0 18 51.1 2001 21.5 10.8 6.1 2.8 4.7 1.6 2.9 9.3 59.7

Other

2002 6.3 8.8 3.3 2.9 6.3 1.5 4.6 6 39.7 1999 379.2 79.7 54.7 34.1 12 15.2 4.3 27.2 606.4 2000 388.6 83.2 62.3 25.1 12.1 9.6 1.6 34.6 617.1 2001 329.7 88.6 75.7 19.1 17.5 7.4 12.5 20.6 571.1

Total

2002 312 84 76.7 19.9 20.3 8.7 13.7 14.2 549.5 Source: General Organization for Industrialization- GOFI Graph 21:

Total Egyptian Imports of Raw Wood

0

100

200

300

400

500

600

700

1999 2000 2001 2002

US$0

00,00

0

Lengthw ise chipped w ood Beech w ood Plyw ood

Conifer lumber squared and unsquared Ply sheets (Not tropical) Oak

Fiberboard (w orked & not w orked) Other Total

B. 1 Egyptian Imports of Lengthwise Chipped Wood

According to Egyptian statistics, in 1999 Egypt imported the bulk of its length-wise chipped wood from Sweden (US$133,900,000), to be followed by Finland (US$104,000,000), followed by Russia (US$87,300,000), then by Romania at (US$33,800,000). For the year 2000, the hierarchy of countries changed with Sweden remaining the highest source (US$118,100,000), to be followed by Russian (US$102,200,000), Finland (US$984,000,000) and Romania (US$3,800,000). For the year the 2001, Egypt imported the greatest amount from Russia (US$9,300,000) followed by Sweden (US$90,300,000), Finland (US$86,700,000) and Romania at (US$18,000,000). In 2002, the bulk of imports came again from Russia at (US$115,000,000), followed by Finland (US$75,500,000), Sweden at US$74,000,000 then by Romania at US$17,200,000. It follows that Egypt's main sources of length-wise chipped wood are primarily Russia, Sweden, Finland, and Romania; with Finland and Sweden alternating their positions from one year to another. Graph 22:

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1999 2000 2001 2002

Imports of Lenghtwise Chipped Wood from Main Trading Partners

Russia Finland Sweden Romania Estonia USA Total

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B.2 Egyptian Imports of Beachwood In 1999, the greatest amount of Beachwood imports was from Romania at US$41,000,000, followed by Bosnia and Herzegovina at US$11,000,000, followed by Croatia at US$ 3,200,000, Indonesia at (US$2,500,000) then by Russia at US$ 800,000. For the year 2000, the greatest amount of imports was from Romania at US$55,100,000, followed by Bosnia and Herzegovina at US$10,000,000, Croatia at US$6,600,000. In 2001, the greatest amount of Beech wood was imported from Romania at US$51,500,000, followed by Croatia at US$15,400,000, followed by Bosnia and Herzegovina at US$9,800,000. It follows that Egypt's main source of beech wood is Romania to be followed by Croatia and Bosnia and Herzegovina. Furthermore importation of beech wood over the period 1999-2002 has been fairly consistent with a slight increase of US$3,500,000 million between 1999 and 2000, another increase of US$5,400,000 between 2000 and 2001, and a decrease of US$4,600,000 between 2001 and 2002. Graph 23:

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90

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1999 2000 2001 2002

Imports of Beech Wood - Main Trading Countries

Romania Croatia Bosnia and Herzegovina

Russia Total

64

B.3 Egyptian Imports of Plywood In 1999, the greatest amount of Plywood imports was from Indonesia at US$26,900,000, to be followed by Russia at US$17,400,000, Romania at US$4,800,000, then Malaysia at US$1,400,000. For the year 2000, the greatest amount of imports was from Indonesia at US$26,300,000, followed by Russia at US$21,600,000, Romania at US$8,200,000, then Malaysia at US$2,000,000. For the year 2001, the greatest amount of imports was from Russia, US$27,600,000 and Indonesia at US$25,500,000. In 2002, the largest amount was imported again from Russia followed by Malaysia and Indonesia. These statistics indicate that the demand for plywood has generally been rising over the past few years. Graph 24:

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80

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1999 2000 2001 2002

Egyptian Imports of Plywood - Main Trading Partners

Russia Romania Indonesia Malaysia Total

65

B.4 Comparison between Statistics Provided by MOFT & the General Organization for Military Production – GOFI on Egyptian Imports of Wood and Wood Products- HS 1996 Code 44

An examination of the statistics covering Egyptian imports of wood and wood products provided by the Ministry of Foreign Trade and GOFI revealed some discrepancies in the values. For example, the value of total imports provided by the Ministry of Foreign Trade (table 20) in million dollars were 604.4, 617.1, 565.2 and 549.5 in 1999, 2000, 2001 and 2002 respectively. According to GOFI, on the other hand, the figures were 606.4 in 1999, 617.1 in 2000, 571.1 in 2001 and 549.5 in 2002.

Table 22: Egyptian Imports of Wood, Wood Products, Wood Charchoal - HS 1996 Code 44 (MOFT Vs. CAPMAS)

Year GOFI MOFT 1999 606.4 604.5 2000 617.1 617.15 2001 571.1 565.1 2002 549.5 549.5

Value in US$ 000,000 Graph 25:

500

520

540

560

580

600

620

Val

ue in

US

$ 00

0,00

0

1999 2000 2001 2002

Comparison between MOFT & GOFI Statistics covering Egyptian of Imports of Wood (HS

1996 Code 44)

MOFT GOFI

66

67

B. Egyptian Imports of Raw Wood and Wood Products Classified by region (HS1996 Code #

44) as Reported by Foreign Sources The statistics presented in table 23 have been obtained from the United Nations Statistics Division website which includes data covering the flows of commodity trade as reported by each UN member. The reported exports of wood and wood products of each of these countries have been compiled according to region to facilitate its analysis. An examination of the data has revealed the following overall trends: 1. There has been a general decline in total imports between 1999 and 2002 (with only the year 2000 witnessing an increase). 2. The main source of Egyptian imports is Europe (both EU and Non EU countries) followed by Asia.

Some Important Figures:

Imports from the EU have witnessed a slight decline from US$ 154.4 million in 1999 to US$147 million in 2000 followed by an increase to US$154.3 million in 2001. Given that the statistics of all EU countries for 2002 are not yet available, it is difficult to come up with a general trend for that year. However, taking the reported countries as an indicator, it would appear that the general trend has been a slight increase in Egyptian imports from some countries such as Austria were imports increased from US$ 198,804 in 2001 to US$ 258,359 in 2002 and France were imports increased from US$2,150,053 in 2001 to 2,788,988 in 2002. There was also a decline in the imports from some major trading partners including Finland where imports decreased from US$67,549,168 in 2001 to US$61,008,536 in 2002. Imports from Sweden decreased from US$67,549,168 in 2001 to US$ 61,008,536 in 2002 and imports from the United Kingdom declined from US$1,075,703 to US$677,646 between 2001 and 2002. Main Trading Partners:

The main EU exporters of wood and wood products to Egypt throughout the years are Finland, Estonia, Spain, Latvia and Sweden. It is important to note that while these countries witnessed a steady decline in their exports to Egypt, this decline, is somewhat compensated by an increase in imports from other countries such as France, Greece and Portugal.

The year 2000 witnessed a considerable increase in imports from European countries (non-EU); from US$ 141,776,533 in 1999 to US$158,181,287 in 2000. This increase was followed by a steady decline to US$147,550,559 in 2001. Regional trends cannot be deduced for 2002 due to unavailability of statistics for Romania and Russia which are among the most important trading partners in this region.

Egypt's total imports from Asia (excluding Arab countries) witnessed an increase from US$ 38,270,299 in 1999 to US$ 44,938,399 in 2000, to be followed by a mild decline to US$ 42,349,267 in 2001. A regional trend for the year 2002 can not be derived due to lack of information on a considerable number of countries. Egypt's main sources of imports from this region are China, Indonesia, and Malaysia.

Imports from North America and Latin America have witnessed a similar trend i.e. an increase in 2000 followed a decrease in 2001 and 2002. Egypt's imports of wood and wood products from Arab

68

countries and Africa represent a very small percentage of total imports. The main sources of imports from these regions are Lebanon, Zambia and Gabon.

Table 23: Egyptian Imports of Raw wood and wood products Classified by Country (HS1996 Code # 44) – UNSTATS

Region 1999 2000 2001 2002

European Union 154,366,849 147,319,861 154,308,239 133,877,124 Austria 364,803 44,709 198,804 258,359 Belgium 2,716,068 1,996,001 1,886,436 NA Czech republic 77,544 60,354 115,446 70,999 Denmark 48,828 2,636 0 22,662 Estonia 8,962,539 10,680,692 7,235,817 9,276,300 Finland 105,998,952 92,790,848 67,549,168 61,008,536 France 1,662,572 1,743,096 2,156,053 2,778,988 Germany 4,037,780 3,626,279 4,931,455 NA Greece 657,121 1,031,674 351,478 NA Hungary 118,200 1,116,000 436,000 NA Italy 5,525,381 8,059,617 4,645,102 4,015,866 Latvia 7,919,868 14,541,258 12,321,515 10,790,788 Netherlands 375,058 218,511 164,796 NA Poland 0 314,000 94,000 0 Portugal 109,187 1,816,409 206,280 NA Slovakia 5,194 0 564 0 Spain 8,580,003 8,111,157 4,749,070 NA Sweden 6,633,322 4, 769,175 46,190,552 44,976,980 United Kingdom 574,429 1,166,620 1,075,703 677,646 Europe(Other) 141,776,533 158,181,287 147,550,559 12,583,888 Belarus 0 67,500 1,219,700 257,799 Bulagaria 411,877 320,943 NA NA Croatia 5,553,153 6,210,860 6,213,313 7,407,663 Norway 74,331 0 23,896 482,964 Romania 45,365,000 63,122,000 56,194,000 NA Russia 88,537,296 86,912,072 79,322,064 NA Switzerland 202,697 360,964 177,014 151,591 Macedonia 137,578 106,054 123,740 NA Turkey 1,494,601 1,080,894 4,276,832 4,283,871

Asia (excluding Arab countries) 38,270,299 44,938,399 42,349,267 58,361 China 1,237,159 1,950,497 807,178 NA Georgia 48,212 0 0 NA Hong Kong 235,607 145,697 200,361 0 India 50,725 9,483 97,219 NA Indonesia 32,501,304 34,096,428 28,828,124 NA Iran 48,490 28,913 18,619 NA Israel 25,000 21,000 0 0 Japan 21,509 0 49,014 0 Malaysia 3,907,259 8,542,732 12,309,777 NA Philippines NA 18,550 3,823 NA

Region 1999 2000 2001 2002

Korea 44,231 33,679 631 NA Singapore 17,612 36,536 0 58,361 Sri Lanka 72,654 NA 20,077 NA Thailand 60,537 54,884 14,444 NA Arab Countries 16,132 872,018 101,810 0 Jordan 2,115 4,557 4,000 NA Lebanon 14,017 867,461 97,810 NA

North America - NAFTA 10,294,756 12,148,838 7,653,019 6,990,096 Canada 1,567,269 644,637 634,768 281,839 Mexico 110,623 1,573 514 NA USA 8,616,864 11,502,628 7,017,737 6,708,257

Africa (excluding Arab countries) 138,285 109,053 35,377 5,683 Gabon 132,581 0 NA NA Tanzania 3,708 16,054 1,213 NA Zambia 1,996 92,999 34,164 5,683 Latin America 6,422,925 8,991,048 6,501,774 0 Argentina 0 6,050 1,169 NA Bolivia 530,950 875,871 484,551 NA Brazil 3,207,287 2,269,010 1,583,338 NA Chile 2,684,688 5,840,117 4,428,119 NA Colombia 0 0 4,597 0 Australia 3,142 0 11,275

Total in US $ 351,288,921 372,560,504 358,511,320

Source: United Nations Statistics Division Graph 26:

0

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40,000,000

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100,000,000

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140,000,000

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99 2000 2001

Egyptian Imports of Wood, Wood Products & Charcoal (HS1996 Code#44) - UNSTATS

European Union Europe (Other)Asia (excluding Arab countries) Arab Countries

North America - NAFTA Africa (excluding Arab countries)Latin America Australia

69

70

D. Comparison between Egyptian and Foreign Sources of Statistics for Imports of Raw Wood and Wood Products (HS1996 Code # 44) This section compares between the statistics provided by Egyptian Ministry of Foreign Trade and the data obtained from the United Nations Statistics Division (UNSTATS) website for the period 1999-2001. While the general trend of Egyptian imports over the years is the same for the two sources (increase in imports in 2000, and a decline in 2001), there is a large disparity in the values, the numbers provided by the MOFT being much larger than those presented by UNSTATS. According to the UN Statistics Division website total Egyptian imports were US$ 344.7 million in 1999, US$ 372.6 million in 2000 and US$ 215.8 million in 2001. Egyptian statistics on the other hand indicate that imports totaled US$ 604.5 million, US$ 601.2 million and US$565.2 million in 1999, 2000 and 2001 respectively. It is important to note however, that while Egyptian statistics were reported on both regional and country basis; foreign statistics were reported only on a country basis. In this context, the project team compiled the foreign statistics into regions which opened a margin of error given that a disparity in classification might have taken place. Furthermore, while the statistics provided by Egyptian sources covered the period 1998-2002 comprehensively, a considerable number of foreign countries especially Arab and African countries did not report there imports for the years 2001 and 2002. It follows that a relatively accurate comparison can be made for years 1999 and 2000. However, for the years 2001 and 2002 only general trends can be derived. Taking the above mentioned factors into consideration, the following general trends can be depicted:

• The sources of imports in descending order according to both sources is the European Union, followed Europe (Other), Asia (excluding Arab countries), Arab countries, North America - NAFTA, Latin America & Other, and finally Africa (excluding the Arab countries)

• There are discrepancies between values of imports reported by Egyptian sources of information and the values reported by Egypt's main trading partners.

Table 24: Egyptian imports of raw wood and wood products by region,

HS1996 Code # 44 - UNSTATS & MOFT

99 2000 2001 Region UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT

European Union 147.734 282.440 147.320 260.290 108.118 215.750Europe - Other 141.777 45.670 158.181 41.870 147.551 61.050

Asia (excluding Arab countries) 38.270 0.240 44.938 1.010 42.349 1.480

Arab Countries 0.016 15.920 0.872 15.290 0.102 10.650 North America - NAFTA 10.295 250.470 12.149 288.830 7.653 261.140Africa (excluding Arab

countries) 0.138 1.050 0.109 1.790 0.035 1.380 Latin America & Other 6.426 8.690 8.991 8.070 6.513 13.710 Total in US$ 000,000 344.656 604.480 372.561 617.150 312.321 565.160

Graph 27:

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lue

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Year

Egyptian Total Imports of wood, articles of wood and wood charcoal - UNSTATS & MOFT

UNSTATS MOFT

71

72

E. Comparison of Imports from Major Trading Partners The following table and charts illustrate the import values for wood and wood products (HS 1996 Code 44) from Egypt's major trading partners as provided by the Ministry of Foreign Trade and the United Nations Statistics Division. A comparison of these statistics reveals great discrepancies in the values even on a country by country basis. For instance, imports of wood from Finland as reported by Egypt are US$ 125.6 million in 1999, US116.5 million in 2000, US$ 100.3 million in 2001 and US$ 88.6 million in 2002. Egyptian imports as reported by Finland on the other hand are US$ 106 million in 1999, US$93 million in 2000, US$ 67.5 million in 2001 and US$ 61 million in 2002. Imports from Russia were 110.3 in 1999, 126.3 in 2000 and 132 in 2001 according to Egyptian statistics. According to United Nations statistics (as reported by Russia), the figures were US$88.5 million, US$87million, US$79 million in 1999, 2000 and 2001 respectively. Such discrepancies could be attributed to one or more of the following scenarios:

• Under invoicing by foreign exporters (which is usually done upon the request of the Egyptian importers in an attempt to reduce the custom duties paid in Egypt). The Egyptian authorities on other hand take corrective measures through actual product appraisal. The resulting outcome would be discrepancies between the statistics issued by Egyptian authorities and country of product origin

• Unfair product valuation and over pricing by Egyptian customs authority in order to increase the amount of taxes being paid by Egyptian importers. This would result in discrepancies between Egyptian statistics that are based on product appraisal and foreign statistics that are based on the invoice issued by the exporter.

• Over invoicing by the Egyptian importers, who in order to increase the amount of money refunded received through the Draw Back System report an increased value of their imports.

Table 25: Imports of Wood & Wood Products from Major Trading Partners

Country Year Egyptian Statistics UNSTATS

1999 110.3 88.5 2000 126.3 86.9 Russia

2001 132 79.3 1999 125.6 106 2000 116.5 92.8 Finland

2001 100.3 67.5 1999 137.6 6.6 2000 121.4 4.8 Sweden

2001 94.4 46.1 1999 93.1 45.4 2000 105.9 63.1 Romania

2001 80.7 56.2 1999 11.2 8.1 2000 12.6 11.5 USA 2001 9.9 7

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Graph 28: Imports of Wood & Wood Products (HS 1996 Code 44) from Finland

Egyptian Statistics UNSTATS

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Graph 29: Imports of Wood & Wood Products (HS1996 Code 44) from Romania


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Graph 30: Egyptian Imports of Wood & Wood Products (HS 1996 Code 44) from Russia


73

3.3.2 Egyptian Imports of Furniture, HS1992 Code# 94 A. Egyptian Imports of Wooden Furniture Classified by Product (US$ 000,000) – Egyptian

Sources This section provides statistics covering Egyptian imports of wooden furniture namely office furniture, kitchen furniture, bedroom furniture and wood furniture (other). According to Egyptian statistics, during the period 1999- 2002, Egyptian imports of wooden furniture have generally been on the rise (US$ 6.1 million; 2379tons in 1999, US$ 9 million; 3783 ton in 2002) with a decrease in 2001 in terms of the money value but not in terms of quantity. In general the largest percentage of imports falls within the 'Other Wooden Furniture' Category (US$3.3 million; 1339 ton in 1999, US5.3 million; 2027 ton in 2000, US$4.9 million; 1977 ton in 2001 and US$6.6 million; 2583 ton in 2002). The data also reveals that the second largest category of wood furniture imports is office furniture to be followed by bedroom furniture and kitchen furniture. It is worth noting that the fact that the largest category "Other Wooden Furniture" is ambiguous makes it difficult to deduce changes in the demand for different products over the designated period.

Table 26: Egyptian Imports of Wooden Furniture Classified by Product

Product Name Year Product

Code 1999 2000 2001 2002

9403600000 Wooden Furniture (Other) 3.3 1339 5.3 2027 4.9 1977 6.6 2583

9403300000 Office Furniture 1.7 528 1.7 777 1.8 983 1.4 877 9403400000 Kitchen Furniture 0.4 N/A 0.5 N/A 0.4 N/A 0.5 N/A 9403500000 Bedroom Furniture 0.7 512 0.8 342 0.6 411 0.5 323

Total Imports 6.1 2379 8.3 3146 7.7 3371 9 3783

Source: CAPMAS & International Trade Point

Graph 31:

0123456789

Value

in U

S$00

0,000

1999 2000 2001 2002 2003 (Q1)

Year

Egyptian Imports of Wood Furniture Classified by Product Group (US$ 000,000)

Wooden Furniture (Miscellaneous) Office Furniture Kitchen Furniture Bedroom Furniture Total

74

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B. Egyptian Imports of Wooden Furniture Classified by country of origin The data presented in the following table reveals that the period from 1999 to 2002 witnessed an overall increase in imports, with the years 2001 witnessing a slight decline. The main sources of imports are Italy and the United States. Imports from Italy witnessed a steady decline over the years (from 1.8 in 1999 to 1.2 in 2002) despite the overall growth of imports. Imports from the United States remained relatively consistent over the designated period. China on the other hand has been witnessing a steady increase (from 0.2 in 1999 to 1.2 in 2002). Imports from Germany are also increasing (from 0.4 in 1999 to 0.9 in 2002).

Table 27: Egyptian Imports of Wooden Furniture Classified by country of origin (US$ 000,000)

Year Country 1999 2000 2001 2002 2003 (Q1)

China 0.2 0.4 0.7 1.2 0.3 Spain 0.7 0.7 0.5 0.3 0.2 Turkey 0 0.2 0.1 0.2 0.2 Malaysia 0.1 0.4 0.4 0.7 0.1 Italy 1.8 1.5 1 1.2 0.1 USA 1.2 1.2 1.2 1 0.1 Indonesia 0.3 0.3 0.6 0.3 0.1 Germany 0.4 0.7 0.4 0.9 0.1 European Union 0 0.2 0.2 0.4 0 United Arab Emirates 0.2 0.2 0.1 0.5 0 Philippines 0 0.2 0.2 0.1 0 North Vietnam 0 0 0.1 0 0 Taiwan 0.2 0.6 0.4 0 0 Australia 0 0 0 0 0 United Kingdom 0.1 0.4 0.1 0.1 0 France 0.1 0.2 0.1 0.5 0 Norway 0 0 0 0 0 Canada 0.3 0 0.1 0 0 Thailand 0 0.1 0 0.1 0 Pakistan 0.1 0.1 0.1 0 0 Saudi Arabia 0.1 0.1 0.1 0.1 0 Lebanon 0 0.3 0.4 0.1 0 India 0 0 0.1 0 0 Israel 0 0 0 0 0 Netherlands 0 0 0.1 0.1 0 South Korea 0 0.1 0.1 0 0 Syria 0 0 0.1 0.1 0 Kuwait 0 0 0 0 0 Sweden 0 0.2 0 0.5 0 Belgium 0.1 0.1 0 0.1 0 Hong Kong 0 0 0 0.1 0 Qatar 0 0 0 0 0 Oman 0 0 0.1 0 0 Mexico 0 0 0 0 0 New Zealand 0 0 0 0 0 Tunisia 0 0 0.1 0 0 Czech Republic 0 0 0 0.1 0

Total 5.9 8.2 7.4 8.7 1.2 Total Imports 6.1 8.3 7.7 9 1.3

Source: CAPMAS & International Trade Point

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C. Egyptian imports of Furniture, lighting, signs, prefabricated buildings (HS1992 Code # 94) – Egyptian Statistics

Egyptian imports of Furniture, lighting, signs, prefabricated buildings Classified by Product General Trend: The data presented in the following table covers Egyptian imports of furniture, lightings, signs and prefabricated building over the period 1998 to 2002. In general, there has been a decline in the value of total imports from US$ 59.54 million in 1998 to US$51.09 million in 2002; a decline of 14%. It is worth noting however that this trend hides fluctuations, since imports increased from US$ 57.63 million in 1999 to US$ 61.74 million in 2000 followed by a significant decline to US$46.96 million in 2000. Wooden Furniture (Other): Imports of Wooden Furniture (other) increased from US$ 3.03 million in 1998 to US$ 3.27 and US$5.3 million in 1999 and 2000 respectively. This was followed by a slight decline to US$ 4.94 million in 2001 and an increase to US$ 6.58 million in 2002. In general, imports of this category increased by US$3.55 million i.e. 117 % between 1998 and 2002. Table 28: Egyptian imports of Furniture, lighting, signs, prefabricated buildings (HS1992 Code

#94) classified by Product – Egyptian Statistics

Product Code

Product Name

1998

1999

2000

2001

2002

9405400000 Other electric lamps and lighting fittings 7.37 8.06 7.24 6.37 7.14

9403600000 Other wooden furniture 3.03 3.27 5.3 4.94 6.58

9503200000 Other metal furniture (other than office furniture)

3.29 3.36 7.88 4.09 5.85

9401909000 Seats parts 4.58 2.77 3.42 4.03 3.55

9402900000

Medical, dental, surgical & veterinary furniture

8.33 5.79 4.34 2.49 3.45

9405101000

Chandeliers and other lighting fixtures and equipment for theatre stages and studios

2.48 1.88 1.53 2.83 2.83

9406009000 Prefabricated buildings of other materials

0.69 2.33 1.16 1.9 2.09

9403900000 Furniture parts 1.32 2.59 1.35 1.41 1.99 Other 28.45 27.58 29.52 18.9 17.61 Total 59.54 57.63 61.74 46.96 51.09

Source: MOFT

Graph 32:

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98 99 2000 2001 2002

Egyptian Imports of Furniture, Lightings, signs, Prefabricated Buildings (HS 1996 Code 94)

9405400000 9403600000 9503200000 9401909000 94029000009405101000 9406009000 9403900000 Other

Metal Furniture: Imports of Metal Furniture (other than office furniture) increased from US$ 3.29 million in 1998 to US$ 3.36 and US$7.88 million in 1999 and 2000 respectively. This was followed by a decrease to US$ 4.09 million in 2001 and an increase to US$ 5.85 million in 2002. Overall, imports increased by US$ 2.56 million; 78% between 1998 and 2002. Seat Parts: Imports of seat parts decreased from US$ 4.58 million in 1998 to US$ 2.77 million in 1999, followed by an increase to US$ 3.42 million and US$ 4.03 million in 2000 and 2001 respectively. This was followed by a decrease to US$ 3.55 million in 2002. Overall, imports of seat parts decreased by 22.5 % between 1998 and 2002. Egyptian Imports of Furniture, Lightings, Signs, Prefabricated Buildings classified by Country The data presented in the following table presents total Egyptian imports of Furniture, Lightings, Signs, Prefabricated Buildings (HS 1996 Code 94) classified by country of Origin. It is worth noting that the information obtained from CAPMAS presented the value of imports in Egyptian L.E. To maintain consistency and in order to facilitate the analysis and comparison process, the values were converted by the project team into US$ using the exchange rates presented below.

Table 29: Imports of Furniture & Prefabricated Buildings (HS 1996 Code 94)

Country 1999 2000 2001 2002 Afghanistan 10,896 13,427Air Shipment 10,292 11,548 578 Albania 5,120 9,573 9,184Algeria Argentine 4,476 6,813 3,883 Australia 1,395 62,162 61,773 365,749Austria 107,276 619,787 300,922 92,441

77

78

Country 1999 2000 2001 2002 Azerbaijan 24,077 Bahrain 19,632 19,648Belgium 569,506 357,526 312,834 344,915

Bosnia & Herzegovina 182 Brazil 80,437 362,771 111,783 330,533Bulgaria 72,676 39,778 7,098 16,452Cambodia 810Canada 409,326 64,946 107,651 32,260Central Africa 21,850 Chile 971 China 7,686,511 7,590,667 7,434,279 9,399,112Costa Rica 6,457 Croatia Cyprus 68,529 87,617 24,366 26,469Czech Republic 20,038 151,619 362,472 105,476Denmark 367,956 156,023 146,390 178,868El Salvador 1,639 EU 316,355 359,763 984,310 2,516,816Finland 506,275 79,232 244,247 62,483France 3,296,656 3,436,439 1,372,420 3,953,625Germany 10,590,669 8,835,335 6,804,187 9,585,569Gibraltar 1,661 Greece 315,658 121,008 62,892 249,027Holland 754,497 298,837 193,910 473,630Hong Kong 480,111 89,843 342,983 125,798Hungary 79,931 151,263 70,566 86,031India 67,127 138,888 531,127 136,821Indonesia 550,692 726,374 1,023,964 592,396Iran 20,375 62,100 32,422 Iraq 2,290Ireland 10,639 8,952 36,859 33,076Israel 68,527 28,281 37,366Italy 9,168,154 7,710,334 5,380,340 4,983,435Japan 230,699 380,483 278,453 138,856Jordan 62,329 104,252 198,722 121,310Kenya 615Kuwait 46,936 84,553 53,479 67,376Lebanon 85,169 455,391 454,011 522,637Lithuania 3,588Malaysia 370,376 923,320 867,753 1,003,468Malta 1,040 Marine Shipment 8,140 990 2,154 Mexico 345 26,534 49,587 1,354Morocco 10,452 23,490 18,209Nepal 3,331 New Zealand 41,475 6,692 5,610Norway 342 28,747 106,276 17,069Oman 10,367 109,906 5,095Pakistan 59,226 97,836 52,799 15,932

79

Country 1999 2000 2001 2002 Palestine 8,512 Philippines 24,408 375,954 297,962 168,338Poland 88,127 152,796 78,489 281,427Portugal 4,711 19,942 12,566 29,421Qatar 60,482 20,675 2,793 23,230Romania 1,372 5,162 21,826 181Russian 7,704 8,544 23,089 471Saudi Arabia 820,022 781,738 730,762 390,138Singapore 117,775 23,527 6,216 12,227Slovakia 38,601 153 Slovenia 6,511 583 40,201South Africa 1,017,982 1,771,723 341,939 31,625South Korea 1,579,555 1,287,414 2,044,746 1,119,111Spain 2,511,298 2,753,518 2,941,512 2,802,924Sri lanka 3,030 5,497 3,004Sudan 3,507 2,934Sweden 388,830 429,054 135,492 602,601Switzerland 246,088 429,542 267,836 301,359Syria 14,890 8,645 88,791 77,409Taiwan 1,574,000 1,827,020 1,673,107 1,007,217Tanzania 26,127 Thailand 223,209 132,379 125,168 172,827Tunisia 15,645 2,957 108,760 22,115Turkey 1,095,431 913,716 907,196 886,657U.S.A 7,039,134 13,316,090 6,525,803 5,225,212UAE 534,645 1,116,903 301,537 744,010Ukraine 1,320United Kingdom 2,587,333 1,845,805 1,834,212 1,384,740Uruguay Vanuatu 1,241Vietnam 3,349 40,318 138,081 56,654Yemen 15,485 Zambia 4,778 Zimbabwe 9,373Total US$ 56,462,731 61,121,494 46,817,262 51,092,788 Exchange rate: 1 US $ =

1999 L.E. 3.40803 2000 L.E. 3.4837 2001 L.E. 3.9825 2002 L.E. 4.52

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D. Egyptian Imports of Furniture, Lighting, Signs, Prefabricated buildings (HS1996 Code #94)

Classified by Product – Foreign Statistics General Analysis: The statistics presented in the table 30 which present the total imports of furniture, lighting, signs, prefabricated buildings obtained from the United Nations Statistics Division reveal that total Egyptian imports of this product group have undergone a general decline from US$104.2 million in 1998 to US$ 87.6 million in 2002 with the year 1999 being the only exception when imports increased to reach US$ 124 million. It is worth pointing out that while the table provides figures for specific countries, the general analysis of the data will be done on a regional level. The EU: Imports from European Union, witnessed an increase from US$57.4 million in 1998 to US$ 61.7 million in 1999, followed by a gradual decrease to US$ 58 and US$ 36 million in 2000 and 2001 respectively. The overall decline in imports from this region is of considerable significance especially when comparing the value for 1998 to those of 2001. The main sources of imports in descending order are Italy, Germany, France and Spain. European Countries (non-EU): Egypt's imports from "other" European countries witnessed a decline from US$5.2 million in 1998 to US$ 3.3 million in 1999 imported, an increase to US$ 6.6 million in 2000, followed by a severe decline to US$ 1.1 million in 2001. The overall decline in imports from this region is massive when the value for 1998 is compared to that of 2001. The main sources of imports from this region are Russia, Turkey, Norway and Switzerland Asia: For the category Asia (excluding Arab countries), the year 1999 witnessed a slight increase to US$ 9.22 million from the US$ 9.21 million of the previous year. This was followed by a considerable increase to US$ 11.7 million and US$ 13.4 million in 2000 and 2001 respectively. A general increase in the imports from this area can be depicted when the data for 1998 are compared with those of 2001. The main sources of imports from this region are China, Japan, Malaysia and the Republic of Korea. Arab Countries: Imports from Arab countries, witnessed a sharp decline from US$ 1.5 million in 1998 to US$0.5 million in 1999, followed by a significant increase to US$ 4.7 million in 2000, followed by a decline to US$ 3 million in 2001.The main sources of imports for this region are Saudi Arabia, Jordan and Lebanon. NAFTA: As for the North America- NAFTA region, the year 1999 witnessed a sharp increase to US$ 48.1 million when compared to the US$ 29.3 million of 1998. This was followed by a sharp decline to US$ 18.4 million in 2000 and an increase to US$ 30.1 in 2001. The USA is the major source of imports in this region followed by Mexico and Canada.

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Table 30: Egyptian Imports of Furniture, Lighting, Signs, Prefabricated Buildings

Classified by Country ( HS1996 Code # 94) – UNSTATS

Region 98 99 2000 2001 2002European Union 57,417,674 61,672,260 57,983,343 36,026,346 20,907,722Austria 572,045 454,840 532,384 452,277 270,616Belgium 744,571 684,051 293,226 539,038 0Cyprus 39,663 275,248 147,239 97,601 0

Czech Republic 145,370 84,648 124,786 427,992 360,912Denmark 411,575 474,217 322,670 393,101 338,929Finland 606,798 559,108 314,036 338,397 122,127France 5,608,161 9,798,393 7,052,470 3,839,351 5,088,840Germany 19,538,000 14,641,395 13,204,099 8,150,163 0Greece 120,073 0 111,152 309,930 0Hungary 1,000 9,000 163,000 0 0Ireland 101,383 25,800 9,700 32,595 0Italy 20,309,226 18,525,772 22,874,936 12,697,913 12,367,171Netherlands 12,579 54,937 5,689 0 0Poland 58,000 0 95,000 178,000 113,000Portugal 48,230 3,826 29,426 0 0Slovakia 149,758 6,129 11,660 2,360Slovenia 192,453 0 13,102 0 0Spain 5,057,133 10,429,694 5,941,294 5,318,303 0Sweden 3,695,430 219,655 722,854 111,169 403,355

United Kingdom 6,226 5,425,547 6,014,620 3,140,516 1,840,412Europe (Other) 5,148,272 3,344,635 6,592,371 1,809,879 370,719Belarus 0 6,800 889 0 4,398Bulgaria 51,580 102,969 64,659 0 0Norway 62,572 141,541 2,941,991 135,831 0

Russian Federation 3,779,363 156,647 1,198,713 38,201 0Romania 0 1,000 2,000 1,000 12,000Switzerland 259,144 915,856 743,519 675,392 354,321Turkey 995,613 2,019,822 1,640,600 959,455 Asia (excluding Arab countries) 9,214,080 9,222,020 11,655,989 13,370,766 392,196China 5,003,539 4,791,086 7,266,360 8,318,803 0India 94,656 32,559 62,302 13,851 0Indonesia 112,095 648,210 997,421 1,205,878 0Iran 12,875 15,893 61,554 0 0Israel 50,000 58,000 54,000 17,000 25,000Japan 1,183,433 1,312,147 825,317 1,070,084 294,695Malaysia 372,383 1,286,048 1,750,192 924,290 0Philipinnes 289,876 203,046 252,580 364,856 0

Republic of Korea 953,802 411,521 0 0 0

Singapore 1,116,055 197,404 223,164 1,138,906 72,501Sri lanka 0 770 0 0 0

Thailand 25,366 265,336 163,099 317,098 0

82

Region 98 99 2000 2001 2002Arab Countries 1,497,383 548,416 4,664,346 2,974,384 0Algeria 0 0 5,378 0 0Jordan 130,215 161,275 170,599 266,732 0Lebanon 106,254 367,733 748,445 718,601 0Morocco 0 18,321 1,342 91,653 0Oman 10,663 1,087 171,702 265,015 0Saudi Arabia 1,250,251 3, 320,411 3,566,880 1,632,383 0

North America - NAFTA 29,303,287 48,058,425 18,433,439 30,082,527 18,951,693Canada 455,3 636,449 487,707 63,576 127,625Mexico 91,909 0 23,428 44,699 0United States 29,211,378 47,421,976 17,922,304 29,974,252 18,824,068Africa (excluding Arab countries) 5,129 575 5,829 0 0Gabon 0 575 0 0 0Kenya 5,129 0 5,829 0 0Latin America 77,501 121,366 793,147 128,479 0Brazil 69,709 119,551 792,200 127,687 0Chile 7,792 1,815 947 792 0Other 2,452 141,434 27,824 280,703 0Australia 2,452 141,434 27,824 280,703 0

Total in US $ 104,163,161 123,657,547 104,820,634 87,647,468 40,622,330Source: United Nations Statistics Division Graph 33:

0

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98 99 2000 2001

Egyptian Imports of Furniture, Lighting, Signs, Prefabricated Buildings

European Union Europe - OtherAsia (excluding Arab countries) Arab Countries

North America - NAFTA Africa (excluding Arab countries)Latin America Other

83

E. Comparison between Egyptian and Foreign Sources of Statistics for Imports of Furniture, Lighting, Signs, Prefabricated Buildings (HS1996 Code # 94)

E.1 Accuracy of Data The data provided in the table below presents a comparison between the statistics obtained from Egyptian sources (MOFT, ITP and CAPMAS) for imports of furniture, lighting, signs and prefabricated buildings (HS1996 Code # 94) with those obtained from the UN Statistics division website. The analysis which covers the period 1999 to 2001 compares between the values of imports by the main geographic regions. It is worth noting however that while Egyptian statistics were reported on a regional basis, the foreign statistics were reported on a country basis. In this context, the project team compiled the foreign statistics into regions which opened a margin of error given that a disparity in classification might have taken place. Furthermore, while the statistics provided by Egyptian sources covered the period 1998-2002 comprehensively, a considerable number of foreign countries especially Arab and African countries did not report to the United Nations their exports for the years 2001 and 2002. It follows that a relatively accurate comparison can be made for years 1999 and 2000. However, for the years 2001 and 2002 only general trends can be derived. Taking the above mentioned factors into consideration, the following observations are derived:

• Overall, according to both sources, there has been a decline in the amounts imported, with the year 2000 witnessing the only increase in imports.

• The main source of imports are the European Union, Europe (other) and North America- NAFTA

E.2 Comparison between Egyptian and Foreign Sources of Statistics

Despite the fact that the values obtained from the UN Statistics Division (UNSTATS) are not as comprehensive as those obtained from Egyptian sources, the aggregate value of imports reported by Egypt is still much lower than that reported by foreign countries. The values obtained from the UNSTATS were larger by about US$66 million in 1999, by US$106 million in 2000 and by US$ 40 million in 2001. A possible explanation for this discrepancy could be a result of inaccurate data collection and reporting by the Egyptian authorities. This discrepancy could also be a result of a process of under-invoicing through which importers do not report the real values of their imports in order to reduce the amounts of taxes paid.

Table 31: Comparison between Egyptian s Statistics (MOFT) and Foreign Statistics (UNSTATS) for Total Imports of Furniture, lighting, signs, prefabricated buildings (HS1996 Code # 94)


European Union 61.6700 31.82 57.9800 27 36.0300 19.92 Europe – Other 3.3400 0.28 69.5900 0.57 1.8100 0.58

Asia (excluding Arab countries) 9.7700 14.45 16.3000 14.82 16.3500 15.72

Arab Countries 0.5500 1.68 4.6600 2.58 2.9700 2.12

North America – NAFTA 48.0600 7.6 18.4300 13.53 30.0100 6.65

Africa (excluding Arab countries) 0.0006 1.04 0.0058 1.84 0.0000 0.38

Latin America & Other 0.2600 0.76 0.8180 1.4 0.4200 1.58

Total in US $ 000,000 123.6506 57.63 167.7838 61.74 87.59 46.95

Graph 34:

0.000020.000040.000060.000080.0000

100.0000120.0000140.0000160.0000180.0000

Valu

e US

$ 00

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99 2000 2001Year

Egyptian Total Imports of Furniture, lighting, signs, prefabricated buildings Classified by country ( HS1992

Code # 94) – UNSTATS & MOFT

UNSTATS MOFT

84

E.3 Comparison between Egyptian and Foreign Sources for Imports of Furniture, lighting, signs, prefabricated buildings (HS1996 Code # 94) by Region E. 3.1 the EU & North America Imports from the European Union witnessed a steady decline in 2000 and 2001 according to both Egyptian and foreign sources. Imports from North American -NAFTA, witnessed a decline in 2000 according to UNSTATS, but an increase according to MOFT. The year 2001 witnessed an increase in imports according to UNSTATS, and a decline according to MOFT. It is worth noting that for both regions, there is a great discrepancy between the figures obtained, with the United Nations Statistics Division reporting values that are much higher. The difference for the EU was US$30 million in 1999, US$30 million in 2000 and US$16 million in 20001. For the NAFTA, the difference between UNSTATS statistics and Egyptian statistics was US$41 million in 1999, US$ 5 million in 2000 and US$23 million in 2001. Graph 35:

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98 99 2000 2001

Comparison of Egyptian Imports of Furniture, Lighting, Signs & Prefabricated Buildings from the EU

UNSTATS MOFT

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98 99 2000 2001

Comparison of Egyptian Imports of Furniture, Lightings, Signs & Prefabricated Buildings from

NAFTA

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85

E. 3.2 Asia and Arab Countries The volume of imports from Asia (excluding Arab countries) witnessed an increase in 2000 and 2002 according to both sources. Imports from Arab countries on the other hand witnessed an increase in 2000 followed by a decrease in 2001 according to both sources. It is worth noting however that given that various Asian and Arab countries did not report their imports to the UN Statistics division a comparison of the values of imports on a regional level with those obtained from Egyptian sources is not possible. Graph 37:

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98 99 2000 2001

Comparison of Egyptian Imports of Furniture, Lightings, Signs & Prefabricated Buildings from

Asia

UNSTATS MOFT

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Countries

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86

87

3.3.3 Egyptian Imports of Intermediate Products (Feeding Industries) A. Egyptian Imports of Paints Classified by Product (US$ 000,000) The data provided in the following table covers Egyptian imports of paints over the period 1999 to the first quarter of 2003. There is an overall decline in the total amounts imported over the years, with 2002 being the only exception witnessing a small increase in imports. Imports of paints have decreased from US$23.15 million in 1999 to US$17.78 million in 2000. A further decline occurred in 2001 where imports reached its lowest at US$15.73 million followed by a slight increase to US$16.18 million in 2002. The highest value of imports goes to Paints and other based on synthetic polymers/chemically modified natural polymers dissolved in a non-aqueous medium (HS1996 Code # 32082090) followed by Varnishes including lacquers based on synthetic polymers/chemically modified natural polymers dissolved in a non-aqueous medium (HS1996 Code # 32082090).

Table 32: Egyptian Imports of Paints Year Product

Code Product Name 1999 2000 2001 2002 2003 (Q1)

3210 Paints and varnishes nes, water pigments for leather

0.48 0.93 0.76 0.76 N/A

32081010 Paints and lacquers based on polyesters dispersed or dissolved in a non-aqueous medium

0.3 0.3 0.7 0.4 0.1

32081090 Paints and sloutions based on polyesters dispersed or dissolved in a non-aqueous medium

0.2 0.2 0.3 0.5 0

32082010 Varnished based on acrylic/vinyl polymers dispersed or dissolved in a non-aqueous medium

0 0 0.1 0.1 0.1

32082090

Paints and solutions based on acrylic/vinyl polymers dispersed or dissolved in a non-aqueous medium

0.2 0.2 0.3 0.3 0

32089090

Paints and other based on synthetic polymers/chemically modified natural polymers dispersed or dissolved in a non-aqueous medium

18.2 12.6 10.5 11.8 2.4

32089010

Varnishes including lacquers based on synthetic polymers/chemically modified natural polymers dispersed or dissolved in a non-aqueous medium

2.5 1.7 1.6 1 0.3

88

Year Product Code Product Name

1999 2000 2001 2002 2003 (Q1)

32099020

Paints based on synthetic polymers/chemically modified natural polymers other than acrylic/vinyl polymers, dispersed or dissolved in an aqueous medium

0.4 0.5 0.5 0.9 0.1

32099010

Varnishes and lacquers based on synthetic polymers/chemically modified natural polymers other than acrylic/vinyl polymers, dispersed or dissolved in an aqueous medium

0.2 0 0.1 0.1 0

32091020 Paints based on acrylic/vinyl polymers dispersed or dissolved in an aqueous medium

0.2 0.1 0.2 0 0

32091010 Varnishes based on acrylic/vinyl polymers dispersed or dissolved in an aqueous medium

0.2 0.8 0.2 0.1 0

34052 Polishes, creams etc. for maintenance of woodwork

0.1 0.29 0.22 0.22 N/A

34053 Polishes etc. for coachwork, except metal polishes

0.17 0.16 0.25 0.21

Total 23.15 17.78 15.73 16.18 3.21 Source: CAPMAS & International Trade Point

Graph 39:

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1999 2000 2001 2002

Imports of Paints - Main Products

3210 32081010 32081090 32082010 32082090 32089090 3208901032099020 32099010 32091020 32091010 34052 34053

B. Egyptian Imports of Glues and Adhesives Total Egyptian imports of Glues and Adhesives have declined from US$ 4 million in 1999 to US$3 million in 2000 and US$ 2 million in 2001 to rise again to reach US$3 million in 2002. When measured in terms of both quantity and money value, imports of Albumins, albuminates and other albumin derivatives (HS1996 Code 3503) are the highest followed by Gelatin & derivatives, isinglass, glues (animal) nes (HS1996 Code 3501) and Gelatin & derivatives, isinglass, glues (animal) nes (HS1996 Code 3502).

Table 33: Egyptian Imports of Glues and Adhesives

1999 2000 2001 2002

Code Product Group QTY Value $ QTY Value $ QTY Value $ QTY Value $

3501 Gelatin & derivatives, isinglass, glues (animal) nes

474 0.23 265 0.98 207 0.95 333 1.09

3502 Casein, caseinates & casein derivatives, casein glues

0 0.00 5 0.01 27 0.06 44 0.11

3503 Albumins, albuminates and other albumin derivatives

669 3.38 454 2.01 375 1.24 386 1.37

Total 1143 4 724 3 609 2 763 3

Source: MOFT Quantity in tons Value in US$

Graph 40:

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3501 3502 3503

89

C. Imports of Tools & Machinery Imports of tools and machinery have declined consistently from US$7.68 million in 1999 to US$ 6.93 million in 2000, US$6.2 million in 2001 and US$ 5.68 million in 2002. In general the highest value was for the imports of Machine tools for wood, cork, bone, hard plastics, etc (HS 1996 Code# 8465) which was US$3.03 million in 1999, US$2.69 million in 2000, US$ 1.2 million in 2001 and US$ 1.59 in 2002. The second largest value was for the imports of Tools for pressing, stamping or punching followed by Tools for Milling.

Table 34: Imports of Tools & Machinery

1999 2000 2001 2002

Code Product Group QTY Value $ QTY Value $ QTY Value $ QTY Value $

82073 Tools for pressing, stamping or punching

239 2.34 284 2.35 174 2.24 166 1.96

82074 Tools for tapping or threading

35 0.68 40 0.56 69 0.50 25 0.39

82075 Tools for drilling, other than for rock drilling

120 1.28 76 0.69 248 1.61 208 1.41

82076 Tools for boring or broaching

20 0.26 31 0.54 11 0.19 3 0.06

82077 Tools for milling 4 0.09 2 0.10 36 0.39 24 0.27

8465 Machine tools for wood, cork, bone, hard plastics, etc

1626* 3.03 1338* 2.69 706^ 1.27 3903^ 1.59

Total 7.68 6.93 6.20 5.68

Graph 41:

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82073 82074 82075 82076 82077 8465

90

D. Egyptian Imports of Nails The value of Egyptian imports of nails has in general decreased from US$ 37.14 million in 1999 to US$ 29.23 million in 2002, with an exceptional increase of the quantity imported during 2001 which totaled the amount of US$ 57.51 million. It is worth noting that the highest value of imports both in terms of quantity and money value is of the product category Screws, bolts, nuts, rivets, washers, etc- iron, steel (HS 1996 Code # 7318). Imports of this category totaled 11,478 ton, US$ 36.33 million in 1999, 14,301 ton, US$35.81 million in 2000, 32,071 ton, US$ 56.99 million in 2001 and 17,427 ton, US$28.67 million in 2002.

Table 35: Egyptian Imports of Nails 1999 2000 2001 2002

Code Product Group Qty Value $ Qty Value $ Qty Value $ Qty Value $

7317 Nails, staples, etc, iron/steel, not office stationary

479 0.57 677 0.65 491 0.38 445 0.40

7318 Screws, bolts, nuts, rivets, washers, etc, iron, steel

11478 36.33 14301 35.81 32071 56.99 17427 28.67

7415 Copper nails, screws, bolts, pins, washers, etc

50 0.25 51 0.40 15 0.14 34031 0.16

Totals 12007 37.14 15029 36.86 32577 57.51 51903 29.23

91

Graph 42:

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1999 2000 2001 2002

Egyptian Imports of Nails

7317 7318 7415

92

3.4 Exports

93

3.4. Exports 3.4.1 Exports of Wood, and Wood Products– HS 1996 Code # 44 A. Egyptian Exports of Wood and Wood Products Classified by Region – as reported by

the Egyptian Government The following table presents data obtained from the Ministry of Foreign trade on Egyptian exports of wood and wood products classified by country and region during the period of 1998 to 2002. An analysis of the data reveals that overall, Egyptian exports of this product have gone through several fluctuations over the designated period; decreasing from US$ 3.8 million in 1998 to US$ 2.4 million in 1999. This decline was followed by an increase to US$ 3.6 million in 2000 and US$ 5.8 in 2001. Total exports decreased again in 2002 to reach US$ 3.3 million. A comparison of the values of 1998 and 2002 reveal an overall decline of 11%.

Table 36: Egyptian Exports of Wood, Wood Products & Charcoal – HS 1996 Code 44 – Classified by Country

Country 1998 1999 2000 2001 2002

Ethiopia 1054.91288 511.1Spain 2199.8 2022.0 1482.2 8002.0Australia 991.2 20617.4 1287.13724 3190.0Israel 965713.3 87558.1 202089.158 202871.6 15262.2Argentine 5475.0Bahrain 4159.3 18142.3 944.9723 6333.7 5520.6Brazil 150.0Portugal 700.978844 Libya 602312.8 509571.0 919667.308 1092644.3 974903.8Tunisia 14405.7 23078.6 8852.08256 13983.4 155343.8Algeria 43612.6 54465.1 95672.4173 92652.4 202424.6Sudan 5595.6 5630.9 25880.5293 25184.9 18558.6Iraq 13203.2 840.2 20492.9Syria 5686.3 79337.7731 35250.7 239662.2Lebanon 24024.1 35863.0 55832.3047 9073.4 12588.1Yemen 30722.4 5591.75589 4020.6 300.0Denmark 14078.8 399.6 4000.0Sweden 678.4 98.4585355 1295.2 Philippines 106.495967 Germany 174900.5 82328.3 66427.6488 77834.8 37573.7Malaysia 586.732497 Jordan 71497.9 98101.2 130213.853 53424.5 193535.4Morocco 12436.5 2013.2 4988.94853 7029.8 8985.4Saudi Arabia 495125.3 347515.8 163493.699 185064.4 478500.7United Kingdom 434.0 12095.1 1117465.91 1938.5 126770.8Norway 199.5 Austria 798.1 1163.4182 476.1 350.0India 16189.9704 U.S.A 43879.0 81583.9 49944.025 2160147.6 42734.7Japan 399.1 3559.6 2205.1

94

Country 1998 1999 2000 2001 2002 Greece 321456.1 300806.6 126825.502 104454.0 275616.6Uganda 159.6 Italy 56501.0 10330.4 6696.0 17708.0Belgium 21260.7 15711.0 5924.7352 871920.4 10898.5Tanzania 2259.9 Taiwan 5591.5 Turkey 576.6 83.6 417.659385 China South Africa 2193.6 25556.9 984.585355 3670.3 Rwanda 997.6 Russia 400.2 74136.1196 64589.3 3256.0Macedonia 9166.6 Djibouti 13495.6U.A.E 77275.1 33353.9 21151.3621 24763.1 42338.7Kuwait 56109.8 85239.4 56195.4244 14999.9 19205.1Romania 372.6 Switzerland 12394.3 301.9 389.528375 9785.3 390.0Sri Lanka 104.5 Chile Oman 1823.9 689.209748 4428.9 4473.9Ghana 2977.58131 France 2236.5 1990.6 2953.75606 502690.5 18275.7Palestine 153107.2 63619.1 24083.3022 12205.1 3226.1Cyprus 492155.3 442745.3 253614.261 192634.0 289228.3Qatar 3845.0 12619.7 10167.9249 261.1 9677.2Canada 5033.1544 South Korea 159.887476 Colombia 33919.3 Kenya 600.0Malta 7136.7 9115.9 493.153831 Mauritius Nigeria 146.7 New Zealand 2000.0Hong Kong 200.1 Holland 6323.9 13889.0 31564.4286 7107.6 7571.7Total 3,776,512.824 2,400,668.6 3,565,352.07 5,809,249 3,275,002 Exchange rate: I US$ =

1999 L.E. 3.40803 2000 L.E. 3.4837 2001 L.E. 3.9825 2002 L.E. 4.52

95

B. Egyptian Exports of Wood and Wood Products– HS 1996 Code 44 – Classified by Region

The data presented in the following table which have been obtained from the Ministry of Foreign Trade on Egyptian exports of wood and wood products reveal that in 1998 the Arab Region (US$ 1.61 million) was the larges export market followed by Asia (US$ 0.97 million) and the EU (US$0.6 million). In 1999, the Arab Region (US$1.29 million) was again the largest market followed by the EU (US$0.44 million), Asia (US$.09 million) and North America (US$ 0.08 million). In 2000, the Arab Region (US$ 1.29 million) was the largest market followed by the EU (US$1.38 million) and Asia (US$ 0.22 million). The trend changed in 2001 where North America imported the highest value (US $ 2.08 million) followed by the EU (US$ 1.61 million) and the Arab Region (US$ 1.61 million). In 2002, the Arab Region regained its position as the largest export market (US$ 2.4 million) followed by the EU (US$ 0.51 million) and North America (US$ 0.04 million).

Table 37: Egyptian Exports of Wood, Wood Products– HS 1996 Code 44 – Classified by Region

Region 98 99 2000 2001 2002European Union 0.6 0.44 1.38 1.61 0.51

Asia (excluding Arab countries) 0.97 0.09 0.22 0.19 0.02

Arab Countries 1.61 1.29 1.59 1.6 2.4

North America - NAFTA 0.04 0.08 0.06 2.08 0.04

Eastern Europe 0 0 0.08 0.07 0 Africa (excluding Arab countries) 0 0.03 0.01 0.01 0

Latin America 0.03 0 0 0.03 0.01

Other 0.52 0.47 0.25 0.2 0.3

Total in US $ 3.77 2.4 3.59 5.79 3.28 Source: MOFT Exports to the Arab Region As mentioned above, the Arab Region is one of the most important export markets for Egyptian wood and wood products. Exports to this region decreased from US$ 1.6 million in 1998 to US$ 1.29 million in 1999 to gradually increase to reach US$ 1.59 million, US$ 1.6 million and US$ 2.4 million in 2000, 2001 and 2002 respectively. From within this region Libya and Saudi Arabia are among the largest importers. Exports to Libya decreased from US$ 0.6 million in 1998 to US $0.5 million in 1999. This was followed by significant increases to US$ 0.9 million in 2000 and US$ 1.1 million in 2001. In 2002 exports to Libya fell again to reach US$ 1 million. Exports to Saudi Arabia decreased from US$ 0.5 million in 1998 to US$ 0.4 million in 1999, US$ 0.2 million in 2001. In 2002 exports increased again to reach US$ 0.5 million.

Graph 43:

0

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98 99 2000 2001 2002

Egyptian Exports of Wood, Wood Products & Charcoal

European Union Eastern Europe Asia (excluding Arab countries)Arab Countries North America - NAFTA Africa (excluding Arab countries)Latin America Other

Source: MOFT Exports to the EU Egyptian exports of Wood and Wood products to the European Union declined from US$ 0.6 million in 1998 to US$ 0.44 million in 1999, increased in 2000 (US$ 1.38 million) and 2001 (US$ 1.61 million), and declined again in 2002 (US $0.51 million). Exports to this region thus declined overall when we compare the amount exported in 1998 to the amount exported in 2002; (US$ 0.6 million vs. US$ 0.51 million). Within this region, Cyprus, Greece, and the United Kingdom are among the main importers. Egyptian exports to Cyprus in 1999 amounted to $ 442,745; this was followed by a decline in 2000 to $ 253,614, followed by a further decline in 2001 to $ 192,634. Exports to Greece in 1999 amounted to $ 3,000,806, followed by a decline in 2000 ($ 126,825), followed by a further decline in 2001 ($ 104,454). Exports to the United Kingdom in 1999 amounted to $ 12,095, this was followed by an increase in 2000 ($ 1,117,466), followed by a significant decline in 2001 ($ 1,938). Overall exports to the three countries declined over the designated period. Exports to Asia Exports to Asia (excluding Arab countries) declined over the designated period. Total exports decreased from US$ 0.97 million in 1998 to US$ 0.09 million in 1999, this was followed by an increase in 2000 (US$0.22 million), followed by a sharp decline in 2001 (US$ 0.19 million) and 2002 (US$ 0.02 million). Exports to North America Exports to North America - NAFTA fluctuated over the designated period, with the same amount of exports in 1998 and 2002. In 1999, exports to the NAFTA countries fell to US$0.08 million, this was followed by another decline in 2000 (US$0.06 million), followed by a considerable increase in 2001 (US$ 2.08), and finally a significant decline in 2002 (0.04). From within this region, the United States and Canada are the main importers of Egyptian wood products. In 1998 and 1999, the amount exported to the US was reported to be US$ 43,879 and US$ 81,583 respectively, this was followed by a decline in 2000 ($49,944), followed considerable increase in 2001 ($ 2,160,148).

96

97

C. Egyptian Exports of Wood and Wood products (HS1996 Code # 44) – United Nations Statistics Division (UNSTATS)

The data presented in the following table which was obtained from the United Nations Statistics Division illustrates figures for Egyptian exports of raw wood and wood products by region and by country during the period 1999 to 2002. Overall exports have declined throughout the period, with total exports in 1999 amounting to $ 4,494, 557, declining to $ 4,232,796 in 2000 and $ 3,158,473 in 2001. The data reveals that the greatest amount of Egyptian exports is received by the European Union (US$ 1.9 million in 1999, US$ 1.2 million in 2000 and US$ 1.1 million in 2001) and the Arab region (US$ 1.3 million in 1999, US$ 1.6 million in 2000 and US$ 1.1 million in 2001). Asia is also an important market for Egyptian wood and wood products, with total exports of US$ 0.8 million in 1999, US$ 0.6 million in 2000 and US$ 0.3 million in 2002.

Table 38: Egyptian Exports of Raw wood and Wood products– UNSTATS Region 1999 2000 2001 2002

European Union 1,947,585 1,175,965 1,083,222 Austria 22,064 7,696 1,413 9,069 Belgium 47,757 51,725 98,649 N/A Cyprus 716,703 431,448 385,533 N/A Czech Republic 1,106 0 0 0 Denmark 11,336 n/a n/a N/A France 55,833 65,239 60,008 81,144 Germany 57,697 27,759 29,550 N/A Greece 655,716 222,838 283,331 N/A Netherlands 226,612 245,325 87,770 2,533 Ireland 0 1,689 N/A N/A Italy 38,892 14,173 111,343 21,926 Malta 11,716 1,347 N/A N/A Portugal 1,272 8,110 0 N/A Spain 3,298 13,574 14,640 N/A Sweden 1,571 3,053 1,843 1,648 United Kingdom 96,012 81,989 9,142 88,989

Europe(Other) 8,445 12,081 20,788 Norway 950 0 696 920 Russian Federation 1,257 3,510 3,482 N/A Switzerland 6,238 5,589 13,162 15,688 Turkey 0 2,982 3,448 2,533

Asia (excluding Arab countries) 792,913 604,988 348,528 China 53,508 13,000 1,503 N/A Hong Kong 204,405 44,988 1,025 37,243 Israel 535,000 547,000 346,000 296,000

Arab Countries 1,334,048 1,603,056 1,043,826 Algeria 30,752 51,088 N/A N/A Bahrain N/A N/A 16,919 N/A Jordan 49,321 72,810 98,731 N/A

98

Region 1999 2000 2001 2002 Kuwait N/A N/A N/A N/A Lebanon 287,199 85,214 13,708 N/A Libya N/A N/A N/A N/A Morrocco 10,046 17,140 20,128 N/A Oman 7,890 20,149 20,674 N/A Qatar N/A N/A 17,893 N/A Saudi Arabia 771,040 1,199,800 650,264 N/A Sudan N/A N/A 14,901 N/A Tunisia 177,800 156,855 190,608 N/A United Arab Emirates N/A N/A N/A 76,641 North America - NAFTA 390,806 795,252 633,654 Canada 56,256 77,994 43,576 N/A Mexico 4,280 10,379 514 N/A USA 330,270 706,879 589,564 3,449 Africa (excluding Arab countries) 1,938 8,622 1,217

Kenya 1,036 8,011 0 0 South Africa 902 611 1,217 N/A Latin America 14,570 10,026 1,169 0 Argentina 2,316 6,050 1,169 N/A Brazil N/A 1,582 2L385 N/A Columbia 12,254 951 N/A N/A Ecuador 0 1,443 0 N/A Other 4,252 22,806 26,069 N/A

Total in US $ 4,494,557 4,232,796 3,158,473 637,783

Source: United Nations Statistics Division Exports to the EU According to the data presented in table 38, the European Union witnessed an overall steady decline over the designated period. In 1999 the amount exported totaled $ 1,947,585, this was followed by a decline in 2000 ($1,175,965), followed by a further decline in 2001 ($ 1,083,222). An analysis of the figures for the EU for 2002 is not possible given the lack of statistics on some major trading partners including Germany and Cyprus. Within the European Union, Cyprus, Greece, the Netherlands and United Kingdom import the largest amounts. Exports to Cyprus in 1999 amounted to $ 716,703, this was followed by a sharp decline in 2000 to $ 431,448, followed by a further decline in 2001 ($ 385,533). Exports to Greece in 1999 amounted to $ 655,716, this was followed by a sharp decline in 2000 ($ 222,838), followed by an increase in 2001 ($283,331). Exports to the Netherlands in 1999 amounted to $ 226,612, followed by an increase in 2000 ($245,325), followed by a significant decline in 2001 ($87,770). Exports to the United Kingdom in 1999 amounted to $ 96,012, followed by a decline in 2000 ($ 81,989), followed by a further decline to $9,142. It is worth noting however that exports to the UK increased significantly in 2002 to reach $88,989. Overall, exports to the EU witnessed a decline of 44.4% between 1999 and 2001.

Graph 44:

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European Union Europe - OtherAsia (excluding Arab countries) Arab CountriesNorth America - NAFTA Africa (excluding Arab countries)Latin America Other

Exports to Other European Countries The region 'Europe Other' on the other hand witnessed an overall increase in its amount of Egyptian imports from $8,445 in 1999 to $12,081 in the year 2000 which was followed by a sharp increase in 2001 ($ 20,788). When the figures given for 2001 are compared with those of 1999, an increase of 144% is detected in the total value of exports. Within this region, Switzerland is the country receiving the bulk of Egyptian wood products at $6,238 in 1999, $5,589 in 2000, $ 13,162 in 2001, $15,688 in 2002. Exports to Asia Egyptian exports of Wood products to Asia declined steadily throughout the designated period. In 1999 the amount exported was reported to have been $ 792,913, decreasing in 2000 to $ 604,988, further declining in 2001 to $348,528. Within this region Hong Kong and Israel receive the bulk of Egyptian exports. Egyptian exports to Hong Kong amounted to $ 204,405 in 1999, followed by dramatic declines in 2000 ($ 44,988) and 2001 ($1,025), followed by an increase in 2002 to $ 37,243. Despite the increase in 2002, exports to Hong Kong declined considerably over the period. Exports to Israel in 1999 amounted to $ 535,000, followed by an increase in 2000 ($ 547,000), followed by a sharp decline in 2001 ($ 346,000), and followed by a further decline in 2002 (296,000).

99

100

Exports to the Arab Region Exports to the Arab countries, witnessed an overall decline over the designated period. The total amount exported in 1999 amounted to $ 1,334,048, this was followed by an increase in 2000 ($ 1,603,056), followed by a decline in 2001 ($ 1,043,826). Within this region, Saudi Arabia, Tunisia, and Lebanon are the main importers of Egyptian wood products. Amounts exported to Saudi Arabia in 1999 were reported at $ 771,040, this was followed by a sharp decline in 2000 ($1,199,800), followed by a further decline in 2001 ($ 650,264). The amount exported to Tunisia in 1999 amounted to $ 177,800, this was followed by a decline in 2000 ($ 156,855), followed by a sharp increase in 2001 ($ 190,608). The amount exported to Lebanon amounted to $ 287,199 in 1999; this was followed by a sharp decrease to $ 85,214 in 2000, followed by a further decline in 2001 to 13,708. Exports to North America Exports to North America –NAFTA declined over the designated period, the amount of exports in 1999 amounting to $ 390,806, this was followed by a significant rise in exports in 2000 ($ 795,252) which was followed by a decline in 2001 ($ 633,654). Within this region, the United States and Canada are the main importers of Egyptian wood products. Exports to the United States amounting to $ 330,270 in 1999, followed by a sharp increase in 2000 ($706,879), followed by a decline in 2001 (589,564), followed by a drastic decline in 2002 ($ 3,449). Exports to Canada amounted to $ 56,256 in 1999, this was followed by an increase in 2000 ($ 77,994), followed by a sharp decline in 2001 ($ 43,576).

Exports to Africa Exports to Africa (excluding Arab countries) declined over the designated period. The amount exported in 1999 amounted $ 1,938, this was followed by a sharp rise in exports in 2000 ($ 8,622), followed by a significant decline in 2001 ($ 1,217). Within this region South Africa and Kenya appear to be the main reported importers of wood products. Exports to Kenya in 1999 were reported to be $ 1,036, this was followed by an increase in 2000 ($ 8,011); the years 2001 and 20002 were reported to not have any amounts of wood products being exported. Exports to South Africa amounted to $ 902 in 1999, this was followed by a decline in 2000 ($ 611), followed by an increase in 2001 ($ 1,217).

Exports to Latin America Exports to Latin America declined steadily over the designated period. Total exports to the region were reported to be $ 14,570 in 1999, this was followed by a decline in 2000 ($ 10,026), followed by a sharp decline in 2001 ($1,169). Within this region Argentina and Brazil are the main receivers of exports of Egyptian wood products. Exports to Argentina amounted to $ 2,316 in 1999, this was followed by a considerable increase in 2000 ($ 6,050), followed by sharp decrease in 2001 ($ 1,169). Exports to Brazil were not available for the year 1999, exports in 2000 amounted to $ 1,582, this was followed by a sharp increase in 2001 ($ 2,385).

D. Comparison between Egyptian and Foreign Sources of Statistics for Exports of Wood and Wood Products (HS1996 Code # 44)

According to both the Ministry of Foreign trade and the United Nations Statistics Division, Egyptian exports of wood, and wood products have declined between 1999 and 2001, however the figures from both sources display large discrepancies with respects to their presentation of the decline. Statistics obtained from the Ministry of Foreign Trade indicate that exports increased from USS 2.4 million in 1999 to reach US$ 3.6 million in 2000 and US$ 5.8 million in 2001. The United Nations Statistics Division on the other hand indicated that exports decreased from US$4.5 million in 1999 to US$ 4.2 million in 2000 and US$ 3.158 million in 2001. Such discrepancies could be a result of several factors including the fact that the statistics obtained from MOFT were more comprehensive in terms of the countries reported. On the other hand, UNSTATS data included only countries that hold a membership at the United Nations. Furthermore, some of the countries included did not report their statistics for the year 2001. In this context, an analysis on a regional and country level is necessary to come up with a more reliable analysis.

Table 39: Egyptian Exports of Wood by Region, HS1996 Code # 44 – UNSTATS & MOFT (US$ 000,000)


European Union 1.948 0.440 1.176 1.380 1.083 1.610 Europe - Other 0.008 0.000 0.012 0.080 0.021 0.070 Asia 0.793 0.090 0.605 0.220 0.349 0.190 Arab Countries 1.334 1.290 1.603 1.590 1.044 1.600 North America - NAFTA 0.391

0.080 0.795

0.060 0.634

2.080 Africa 0.002 0.030 0.009 0.010 0.001 0.010 Latin America & Other 0.019 0.470 0.033 0.250 0.027 0.230

Total 4.495 2.400 4.233 3.590 3.158 5.790

:45Graph

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Exports of Wood, Wood Products & Charcoal (HS 1996 Code 44) - Comparison UNSTATS Vs.

MOFT

UNSTATS MOFT

101

Exports to the EU Looking at the data provided for each region separately, larger discrepancies can be seen with regards to increases and declines in exports from year to year. According to both sources, exports to the European Union declined over the designated period, and this can be seen when we compare the amount exported in 1999 versus the amount exported in 2001. However within the overall decline there are discrepancies between both sources, according to the MOFT, exports to the European Union were US$ 0.44 million in 1999 while the UNSTATS reported total exports at US$ 1.98. In 2000 MOFT reported exports to the EU at US$1.38 million while the UNSTATS reported them at US$ 1.176 million. In 2001 the discrepancy became even larger with MOFT reporting US$ 1.6 million and the UNSTATS reporting US$ 1.1 million. Graph 46:

0.000

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Egyptian Exports of Wood & Wood Products to the EU - Comparison UNSTATS Vs. MOFT

UNSTATS MOFT

Comparison of Statistics for Main EU Trading Partners Statistics for Cyprus, Greece and the UK reveal that the values for Egyptian exports of wood and wood products as reported by these countries are much higher than the figures provided by Egyptian authorities.

Table 40: Comparison of Statistics for Main EU Trading Partners

1999 2000 2001 Country UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT

Cyprus 716,703 442,745 431,448 253,614 385,533 192,634Greece 655,716 300,806 222,838 126,825 283,331 104,454United Kingdom 96,012 12,095 81,989 117 9,142 1,938

102

Graph 47:

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alue

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Comparison: Exports of Wood & Wood Products to a Selected EU Markets

Cyprus Greece United Kingdom

According to the Egyptian Ministry of Foreign Trade – MOFT exports to Cyprus in 1999, amounted to $ 442,741, this was followed by a decline in 2000 to $ 253,614, followed by a further decline in 2001 ($ 192,634). According to UNSTATS, exports to Cyprus amounted to $ 716,703 in 1999, $ 431,448 in 2000, and $ 385,533 in 2001.

Exports to Greece also show inconsistencies, according to the MOFT, Exports to Greece in 1999 amounted to $ 655,716, this was followed by a sharp decline in 2000 ($ 222,838), followed by an increase in 2001 $ 283,331. UNSTATS reveal that exports to Greece in 1999 amounted $ 655,716, this was followed by a sharp decline in 2000 ($ 222,838), followed by an increase in 2001 ($283,331). Both sources present the same trends in exportation however with large number disparities. According to MOFT, the UK imported wood and wood products with the values of US $ 12,095, US$ 81,989 and US$ 1,938 in 1999, 2000 and 2001 respectively. The UNSTATS on the other hand reported the following figures, US$ 96,012 in 1999, US$ 81,989 and US$ 9,142 in 2001.

103

Comparison of Statistics for the Arab Region A comparison of the aggregate figures provided by the UNSTATS and MOFT for the Arab region reveals little discrepancies during 1999 and 2000, with the values of the UNSTATS being slightly higher i.e. US$ 1.33 million and US$ 1.6 million as compared to MOFT's US$ 1.29 million and US$ 1.59 million. This trend is reversed in 2001 where the UNSTATS reports the value of Egyptian Exports at US$ 1 million and MOFT reports US$ 1.6 million. It is important to note however that some Arab countries including Libya which is one of Egypt's main importers of wood and wood products are not included in the UNSTATS figures. If the figures were accounted for in the UNSTATS values, a distinctive discrepancy would be revealed with the UNSTAT aggregates becoming much higher than those provided by the MOFT. Graph 48:

0.0000.2000.4000.6000.8001.0001.2001.4001.6001.800

Value

US$

000

99 2000 2001

Egyptian Exports of Wood & Wood Products to Arab Countries - Comparison UNSTAT Vs. MOFT

UNSTATS MOFT

Comparison of Statistics for Selected Arab Countries The following table and chart presents a comparison of UNSTATS and MOFT reported export values for selected Arab countries namely Saudi Arabia, Lebanon and Tunisia. An examination of these figures reveals that there are great discrepancies between the values with the UNSTATS numbers being much higher than those provided by the MOFT. For Saudi Arabia, in 1999, UNSTATS reported Egyptian exports of wood and wood products at US$ 771,040 while the MOFT reported exports at US$ 347,516. In 2000, UNSTATS figures were US$ 1,199,800 and MOFT reported only US$ 163,494. Figures for 2001 were US$ 650,264 according to UNSTATS and US$ 185,064 according to the MOFT. Similar discrepancies can be depicted for Lebanon and Tunisia as well, with the UNSTATS reporting values that are much higher than those reported by MOFT.

Table 41: Comparison of Statistics for Selected Arab Countries

1999 2000 2001 Country UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT

Saudi Arabia 771,040 347,516 1,199,800 163,494 650,264 185,064Lebanon 287,199 35,836 85,214 55,832 13,708 9,073 Tunisia 177,800 23,078 156,855 8,852 190,608 13,983

104

Graph 49:

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UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT

1999 2000 2001

Comparison of Egyptian Exports of Wood & Wood Products to Selected Arab Markets

Saudi Arabia Lebanon Tunisia

Comparison of Statistics for the NAFTA Within the NAFTA region, the USA is the only country that imports Egyptian wood and wood products with significant values. A comparison of the figures provided by the UNSTATS and MOFT reveals huge disparities with the UNSTATS reporting higher values (US$ 706,879 in 1999 and US$ 589,564 in 2000 as compared to US$ 81,584 and US$ 49,944 as reported by the MOFT). In 2001 this trend has changed with the UNSTATS reporting only US$ 3,449 and the MOFT reporting US$ 49,944.

Table 42: Comparison of Statistics for the NAFTA 1999 2000 2001

Country UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT USA 706,879 81,584 589,564 49,944 3,449 2,160,147Canada 77,994 0 43,576 5,033 N/A N/A Mexico 10,379 N/A 514 N/A N/A N/A

Graph 50:

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Comparison of Statistics for Egyptian Exports of Wood & Wood Products to the USA

UNSTATS MOFT

105

106

3.4.2 Egyptian Exports of Furniture Lightings, Signs, Prefabricated Buildings (HS 1996

Code# 94) A. Egyptian Exports of Wooden Furniture Classified by Product

The following table presents data obtained from the CAPMAS and ITP on Egyptian exports of wooden furniture classified by product. The data reveals that during the period of 1999-2002 there has been an overall increase in total exports from US$ 15.1 million in 1999 to US$ 18.4 million in 2002. It is worth noting however that there was a decline in exports in the year 2000 (US$ 14.3 million) and 2001 (US$ 12.8 million).

Table 43: Egyptian Exports of Wooden Furniture Classified by Product 1999 2000 2001 2002 Product

Code Product Name Value US$ QTY

Value US$ QTY Value US$ QTY

Value US$ QTY

9403600000 Wooden Furniture (Other) 6.2 4224 4.5 3887 1.9 1497 1.9 1681

9403300000 Office Furniture 0.01 4 0.2 33 0.2 27 0.4 348 9403500000 Bedroom Furniture 8.9 6851 9.6 7782 10.7 9445 16.1 13701

Total 15.11 14.3 12.8 18.4 Value: US$ 000,000

Quantity: ton Source: CAPMAS & International Trade Point

A comparison between the reported money value of exported wooden furniture and the quantity exported reveals that the figures are unreasonable. For example, the export value of wooden furniture (HS Code 9403600000) was US$6.2 million in 1999. This value corresponded to exported quantity of 4,224 ton. It follows, that on average, the price of 1 ton of wooden furniture exports is US$ 1,467. This number is very low especially when the cost of production is considered. The same phenomenon can be depicted with other kinds of furniture as well. This discrepancy between the quantity of exports and the money value can be explained by the fact that to evade payment of custom duties, most exporters do not report the actual value of their exports. According to the Chamber of Woodworks, the real value of exports is sometimes 10 times as high as the reported value. An examination of the exportation patterns of specific products reveals that exports of both 'Office furniture' and 'Bedroom furniture' increased steadily over the designated period. Total exports of office furniture increased from US$0.01 million; 4 ton in 1999, to US$ 0.2 million; 33 ton in 2000. In 2001, although exports remained at US$ 0.2 million in terms of money value, the quantity exported decreased to 27 ton. This was followed by an increase to US$ 0.4 million; 348 ton in 2002. Exports of Bedroom furniture on the other hand were estimated at US$8.9 million; 6851 ton in 1999, followed by an increase in 2000 to US$9.6 million; 7,782 ton, followed by another increase in 2001 and 2002 to US$10.7million; 9445 ton and US$ 16.1 million; 13,701 ton respectively. The category of 'Wood furniture – Other on the other hand dropped significantly over the period, from US$ 6.2 million; 4224 ton in 1999, to US$ 4.5 million in 2000; 3887 ton, to US$1.9 million; 1497 ton in 2001 US$ US$ 1.9 million, 1681 ton in 2002.It is important to note that the ambiguous presentation of this category makes it difficult to observe the changes in exports with regards to specific sub-categories over time.

Graph 51:

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5

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Egyptian Exports of Wood Furniture

Wooden Furniture (Other) Off ice Furniture Bedroom Furniture

B. Egyptian Exports of Wooden Furniture Classified by country

The following table which presents data obtained from CAPMAS and ITP on Egyptian exports of wooden furniture classified according to country of destination reveals that Saudi Arabia and the United States are among Egypt's main export markets. It is worth noting however that export patterns have been different for both countries over the designated period. Exports to Saudi Arabia declined from US$ 2.2 million in 1999 to US$ 1.9 million in 2000, increased to US$ 2.2 million in 2001 and US$ 4.2 million in 2002. Overall there was an increase in the value of exports to Saudi Arabia. Exports to the United States on the other hand decreased from US$ 4.1 million in 1999 to US$ 3.7 million in 2000, followed by another decrease to US$ 3.3 million in 2001. This was followed by an increase to US$ 3.8 million in 2002. A comparison of the figures provided for 1999 and 2002 therefore reveals that exports to the United States have generally declined over the period. Figures provided for Italy show that there has been an increase from US$ 1.2 million in 1999 to US$ 1.7 million in 2000 that was followed by a decline to US$ 1 million in 2001 and an increase to US$ 1.3 million in 2002. A comparison of the values for 1999 and 2002 reveal a slight increase of exports over the designated period.

Table 44: Egyptian Exports of Wooden Furniture Classified by country

107

Country 1999 2000 2001 2002 Saudi Arabia 2.2 1.9 2.2 4.2 USA 4.1 3.7 3.3 3.8 Italy 1.2 1.7 1 1.3 France 0.8 0.7 0.9 1.6 Belgium 0.2 0.3 0.3 0.7 Lebanon 0.3 0.2 0.2 0.7 United Arab Emirates 0.6 0.5 0.6 0.6 Canada 0.2 0.4 0.3 0.5 Australia 0.2 0.2 0.2 0.2 Kuwait 0.4 0.5 0.3 0.8 Netherlands 0.3 0.3 0.3 0.3 Turkey 0.1 0 0 0 Spain 0.3 0.3 0.3 0.6 Greece 0.3 0.3 0.3 0.4 United Kingdom 0.3 0.4 0.3 0.3 Sudan 0.1 0.1 0.1 0

108

Country 1999 2000 2001 2002 Morrocco 0.1 0.1 0.1 0.2 Libya 1 0.5 0.3 0.3 Palestine 0.3 0.3 0 0 Finland 0 0 0 0.2 European Union 0 0 0 0 Algeria 0.2 0.1 0.1 0.1 Bahrain 0.2 0 0 0.1 Malta 0.1 0.1 0 0 South Africa 0.1 0 0 0 Germany 0.1 0.1 0.1 0.2 Tunisia 0.1 0.1 0.1 0.1 Qatar 0.1 0.2 0.2 0.1 Yemen 0 0 0.1 0.1 Jordan 0 0.1 0.2 0.1 Oman 0.1 0.1 0.1 0.1 Cyprus 0.1 0.1 0 0.1 Israel 0.2 0.1 0.1 0.1 Hungary 0 0 0.1 0 Ireland 0 0.1 0.2 0 Austria 0 0 0.1 0 Angola 0 0 0 0.2

Total Exports 15 14.3 12.9 18.4

Source: CAPMAS & Trade International Point

C. Egyptian exports of Furniture, Lighting, Signs, Prefabricated Buildings Classified by region (HS 1996 Code # 94) – Egyptian Statistics

The following table presents data obtained from the Ministry of Foreign Trade on Egyptian exports of furniture, lighting, signs, and prefabricated buildings classified by region. The data reveals that exports have witnessed an overall increase between 1998 and 2002. Total exports increased from US$ 18.31 million in 1998 US$ 19.25 million in 1999. This was followed by a decline to US$ 18.65 million in 2000 followed by a further decline to US$ 16.5 million in 2001. In 2002 however, total exports witnessed a significant increase to US$ 21.62 million.

Table 45: Egyptian Exports of Furniture classified by Region HS1996 Code # 94 - Egyptian Statistics

Region 98 99 2000 2001 2002European Union 4.92 4.62 5.25 4.43 6.02 Asia (excluding Arab countries) 0.34 0.47 0.49 0.37 0.52 Arab Countries 8.03 8.65 7.55 7.2 9.57 North America - NAFTA 3.69 4.64 4.34 3.78 4.45 Eastern Europe 0.43 0.12 0.05 0.22 0.13 Africa (excluding Arab countries) 0.35 0.3 0.55 0.19 0.49 Latin America 0.03 0.12 0.1 0.05 0.03 Other 0.52 0.33 0.32 0.26 0.41

Total in US $ 18.31 19.25 18.65 16.5 21.62 Source: MOFT

The largest amounts of this product group are exported to Arab countries followed by the European Union and North America –NAFTA. Exports to the Arab countries were reported to increase from US$8.03 million in 1998 to US$8.65 million in 1999, followed by a decline to US$ 7.55 million in 2000 and US$ 7.2 million in 2001. This was followed by a significant increase to US$ 9.57 million in 2002. Exports to the European Union amounted to US$4.92 million in 1998; this was followed by a decline in 1999 to reach US$ 4.62 million, followed by an increase in 2000 to US$ 5.25 million, followed by a decline in 2001 to US$4.43 million, followed by a considerable increase to US$ 6.02 million in 2002. Exports to North America – NAFTA amounted to US$ 3.69 million in 1998, increased to US$ 4.64 million in 1999, declined in 2000 to US$ 4.34 million and US$ 3.78 million in 2001. This was followed by an increase to US$ 4.45 million in 2002. Graph 52:

02

46

810

Valu

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98 99 2000 2001 2002

Egyptian Exports of Furniture, Lighting, signs & prefabricates buildings

European Union Asia (excluding Arab countries)Arab Countries North America - NAFTAEastern Europe Africa (excluding Arab countries)Latin America

109

110

D. Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Buildings Categorized by Country – Egyptian Statistics

The following table which presents the values of Egyptian exports of Furniture, Lighting, Signs and Prefabricated buildings has been obtained from the Ministry of Foreign Trade. It is worth pointing out that values were provided in Egyptian L.E. and have been converted into US$ using the exchange rates presented at the end of table 46 to facilitate the analysis process. An examination of the figures reveals that the USA and Saudi Arabia are Egypt's largest export markets for furniture, lighting and prefabricated buildings. Exports to the US totaled US$ 3.5 million, US$ 4.3 million, US$ 3.8 million, US$ 3.5 million and US$ 3.9 million in 1998, 1999, 2001, 2001 and 2002 respectively. Exports to Saudi Arabia increased from US$ 2.7 million in 1998 to US$ 3.4 million in 1999. This was followed by a decrease to US$ 2.8 million in 2000 and significant increases to US$ 3.7 million in 2001 and US$ 4.8 million in 2002. Exports to Italy and UAE are also of considerable significance. In 1998 exports to Italy and UAE were US$1.7 million and US$ 2 million respectively. In 1999 exports to Italy remained the same while exports to the UAE decreased to US$ 0.8 million. In 2000, exports to both countries witnessed an increase with Italy receiving exports totaling US$ 2.1 million and UAE receiving US$0.9 million. The trend was reversed in 2001 with exports to Italy declining to reach US$ 1.1 million and exports to the UAE declining to US$0.86 million. In 2002 exports to Italy picked up slightly to reach US$1.3 million while exports to the UAE continued declining; reaching US$0.77 million.

Table 46: Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Buildings

Country 1998 1999 2000 2001 2002 Albania 33,579 1,004 Algeria 79,639 220,838 93,916 138,135 128,642Angola 18,450 31,568 13,147 192,736Argentine 4,865 502 5,662 6,248Armenia 1,085Australia 173,392 180,702 186,722 189,332 214,263Austria 53,712 26,192 26,568 82,617 7,602Azerbaijan 4,000 332 5,000Bahrain 465,166 391,178 97,177 78,691 97,280Bangladesh 5,744 Belgium 255,332 225,270 333,211 337,018 811,563Brazil 26,779 44,329 34,938 14,891 11,545Brunei 2,000 1,594 1,185 7,016 27,140Bulgaria 10,446 2,904Burundi 1,300 1,525 43,125 932 3,000Cameron 57,581 3,609 3,219Canada 251,049 257,883 465,686 300,807 504,244Chad 4,107 1,721 Chile 1,007 652 China 318 698 500Colombia 588 5,979 Congo 1,350 498 301 186 300Cote D'Ivoir 71,301 14,302 412 3,311 21,772Croatia 5,580 532 3,000

111

Cuba 11,520Country 1998 1999 2000 2001 2002

Cyprus 149,127 110,447 126,404 26,877 111,001Czech Republic 3,031 1,121 12,639 250

Dagestan 300Democratic Congo 2,084 1,206

Denmark 77,475 27,080 64,498 14,679 20,821Djibouti 8,520 4,482 2,795 6,300Dominica 1,198 Eritrea 2,455 11,000Estonia 1,812 Ethiopia 120 1,913 2,992 4,437EU 36,635 8,532 8,442Finland 2,025 28,649 27,240 46,982 171,495France 766,419 986,890 823,998 967,730 1,673,074Gabon 7,310 599 7,421 1,186Genie 2,220 12,305 16,998 4,063 8,773Georgia 5,935 5,162 15,704 9,872 13,836Germany 156,035 112,515 117,568 147,221 172,150Ghana 12,849 80,293 3,368Gibraltar 3,139 Greece 405,196 344,054 341,790 300,083 413,525Holland 606,672 442,282 506,426 440,575 439,662Hong Kong 9,173 23,936 252,853Hungary 16,556 2,920 133,984 40,718India 600 5,284 2,445 279 Indonesia 13,949 12,511 4,391 2,591Iran 93,685 Iraq 4,789 20,380 861 43,591Ireland 38,198 20,058 99,386 220,500 11,950Israel 193,107 174,905 174,690 67,891 149,783Italy 1,707,933 1,738,042 2,099,613 1,182,167 1,372,313Japan 18,456 3,929 5,976 2,393 8,980Jordan 74,083 123,250 266,656 332,992 235,848Kazakhstan 7,495 14,292 Kenya 5,706 36,891 16,433 20,363Kuwait 559,366 512,202 521,213 502,803 1,074,200Lebanon 409,582 472,184 275,254 231,889 713,481Liberia 7,870 559 Libya 351,635 1,116,607 526,011 398,226 535,570Lithuania 9,562Malaysia 30,282 5,518 7,611 3,840 7,550Mali 294 3,703 Malta 70,370 72,891 53,824 46,792 46,675Mauritania 2,600 34,190 Mauritius 598 34,701 110,282 150,544Mexico 65,652 57,135 26,491 3,110Monaco 1,468

112

Morocco 103,664 124,349 109,219 108,984 184,934Country 1998 1999 2000 2001 2002Mozambique 2,199 New Zealand 11,091 10,005 1,793 5,525 14,145Nigeria 91,920 19,204 31,426 1,084 30,099Norway 18,031 9,034 2,139 627 Oman 217,844 105,420 129,058 127,180 154,782Palestine 60,375 536,919 363,386 53,835 26,485Panama 2,144 5,003 Philippines 17,000 36,670 52,333 60,102 19,652Poland 16,552 141 2,500Portugal 1,740 4,141 3,664 186 12,588Qatar 531,772 414,149 318,627 223,909 300,857Romania 56,095 43,757 896 2,397 8,079Russia 290,634 8,634 12,698 29,698 18,652Saudi Arabia 2,688,335 3,359,082 2,774,956 3,688,654 4,800,475Senegal 19,507 12,900 1,040 1,100Serbia 2,406 6,878 Singapore 1,501 22,822 88,833 587 1,429Slovakia 360 1,722Slovenia 9,754 326 19,879South Africa 109,949 129,613 187,484 33,244 27,401South Korea 22,678 35,224 1,461 174,537 8,750Spain 266,149 286,643 279,791 358,012 598,293Sri Leon 4,889 Sudan 65,992 126,977 562,028 199,801 144,543Sweden 29,552 44,771 62,904 1,567 2,145Switzerland 42,559 5,066 5,681 17,577 10,798Syria 42,441 28,352 17,944 62,452 15,110Taiwan 22,600 20,103 36,084 522 24,744Tanzania 26,994 7,675 7,439 5,600Thailand 7,930 9,966 864 3,000Tobago 1,549Tunisia 318,048 229,316 205,374 133,680 104,466Turkey 14,633 135,309 6,523 21,081 14,344UAE 1,991,195 766,441 939,750 859,554 771,374Uganda 1,864 31,379 1,025 UK 572,355 334,576 398,676 386,076 310,792Ukraine 23,520 2,591 1,944 Uruguay 3,977 USA 3,453,772 4,319,166 3,772,819 3,449,138 3,943,784Uzbekistan 10,438 Yemen 87,461 115,238 214,458 115,849 236,986Yugoslavia 692 21,166 4,200Zimbabwe 2,800 15,053 8,358 Total 18,362,070 19,256,346 18,454,163 16,612,409 21,622,712Exchange rate: I US$ =

1999 L.E. 3.40803 2000 L.E. 3.4837 2001 L.E. 3.9825

113

2002 L.E. 4.52 E. Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Buildings Classified by

Region – Foreign Statistics The following table which presents Egyptian exports of furniture, lighting, signs and prefabricated building (HS 1996 Code # 94) from a foreign perspective has been compiled from the United Nations Statistics Division database which includes information about the flows of trade between UN member states. An examination of the data reveals that total exports have increased between 1998 and 2001. In 1998 total exports amounted to $ 48,925,823, this was followed by an increase in 1999 to $ 56,758,604, followed by an increase in 2000 to $ 57,266,055, followed by a slight decline in 2001 to $ 56,357,316. It is worth noting that a trend for total exports in 2002 can not be detected due to the fact that a considerable number of countries did not report their trade statistics for that year.

Table 47: Egyptian Exports of Furniture (HS1996 Code # 94) Region 1998 1999 2000 2001 2002 European Union 17,755,268 19,450,740 19,585,464 19,754,815 Austria 244,225 228,231 296,279 532,384 Belgium 2,703,176 2,870,007 2,401,514 2,449,728 Czech Republic 161,974 65,306 247,470 316,211 474,354 Denmark 116,844 204,512 170,404 106,825 60,683 Estonia 82,523 0 835 0 Finland 17,121 20,818 145,217 21,529 39,259 France 2,165,602 1,628,754 2,203,388 2,833,888 3,423,835 Germany 743,000 1,485,522 1,086,101 1,470,402 Greece 893,804 848,404 567,781 462,179 Hungary 25,000 10,000 0 26,000 Ireland 34,857 3,641 98,314 83,214 Italy 4,289,444 5,230,452 5,003,180 4,498,410 4,014,986 Malta 33,059 74,819 15,301 16,525 Netherlands 1,819,165 2,231,364 2,838,612 1,954,317 Portugal 67,461 40,902 41,262 45,074 Slovenia 12,650 8,461 13,152 8,367 Spain 2,440,822 2,970,098 3,281,266 3,420,431 Sweden 58,030 107,782 115,163 4,463 United Kingdom 1,846,511 1,421,667 1,060,225 1,504,868 1,697,345 Europe(Other) 169,834 1,234,939 184,532 109,965 166,187 Albania 25,588 1,079,767 0 0 Croatia 3,444 615 36,606 0 20,464 Iceland 641 10,491 885 0 Norway 37,444 16,118 1,132 12,178 Romania 3,000 4,000 1,000 4,000 Russia 1,793 879 0 30,723 Switzerland 28,287 47,389 116,431 32,210 43,701 Macedonia 9,183 0 0 0 Turkey 60,454 75,680 28,478 30,854 102,022

Asia (excluding Arab countries) 761,114 1,157,774 1,662,801 1,684,469 748,006

China 96,254 0 82,395 37,220 India 10,270 32,835 7,223 55,227

114

Indonesia 0 5,002 4,454 0 Israel 166,000 375,000 401,000 272,000 83,000

Region 1998 1999 2000 2001 2002 Japan 42,737 0 8,568 30,549 24,495 Malaysia 30,360 36,369 65,410 17,636 Philippines 54,269 56,380 108,077 471,125 Korea 19,013 35,899 50,447 16,675 Singapore 322,588 589,736 935,227 662,698 640,511 Thailand 19,623 26,553 0 121,339 Arab Countries 5,308,894 5,411,535 5,552,713 7,719,797 0 Algeria 15,388 12,280 64,601 N/A Bahrain N/A N/A 95,330 220,888 Jordan 42,737 0 8,568 30,549 Lebanon 1,430,520 1,704,549 1,475,349 1,957,904 Morocco 150,121 146,995 181,024 218,562 Oman 252939 138024 16,515 292,265 Qatar N/A N/A N/A 894,825 Saudi Arabia 3,238,640 3,320,441 3,566,880 4,010,793 Tunisia 178,549 89,246 144,446 94,011

North America - NAFTA 24,131,708 28,422,449 29,305,619 25,593,026 23,527,587 Canada 1,445,365 1,745,309 1,743,996 1,584,766 1,721,387 Mexico 19,577 40,126 108,463 79,420 United States 22,666,766 26,637,014 27,453,160 23,928,840 21,806,200

Africa (excluding Arab countries) 159,108 257,127 306,805 876,816 390,763

Kenya 1,826 53,534 64,871 0 Mauritius 1,178 17,914 37,832 399,875 Senegal 29,389 26,337 33,516 335,467 390,763 South Africa 94,676 135,129 165,100 51,052 Tanzania 15,529 8,496 3,117 79,888 Uganda 16,510 15,717 2,369 10,534 Latin America 300,309 194,450 116,136 178,406 0 Argentina 28,964 38,157 0 12,907 Bolivia 34,136 0 0 0 Brazil 214,195 149,009 98,071 159,780 Chile 7,792 1,815 947 792 Colombia 13,409 1,299 16,449 2,375 Ecuador 1,813 4,170 669 2,552 Australia 339,588 629,590 551,985 440,022 0 Australia 296,279 591,359 522,532 380,489 New Zealand 43,309 38,231 29,453 59,533

Total in US $ 48,925,823 56,758,604 57,266,055 56,357,316 34,543,005Source: United Nations Statistics Division

Graph 53:

0

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20,000,000

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40,000,000

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98 99 2000 2001

Egyptian Exports of Furniture (HS1996 Code # 94)

European Union Europe - OtherAsia (excluding Arab countries) Arab CountriesNorth America - NAFTA Africa (excluding Arab countries)Latin America OtherTotal in US $

As can be depicted from the graph presented above, the largest amount of exports goes to the European Union followed by North America- NAFTA followed by Arab countries.

Exports to the EU Exports to the European Union witnessed a steady increase from $ 17,755,268 in 1998 to $ 19,450,740 in 1999, $ 19,585,464 in 2000 and US$ 19,754,815 in 2001. Within the EU, the countries receiving the largest amounts of Egyptian exports were Italy and Spain. Exports to Italy declined overall throughout the period. An annual examination reveals that exports increased from $ 4,289,444 in 1998 $ 5,230,452 in 1999. This was followed by a decline to $ 5,003,180 in 2000, $ 498,410 in 2001 and $ $ 4,014,986 in 2002. Exports to Spain on the other hand, increased throughout the period, in 1998 exports amounted to $ 2,440,822, this was followed by an increase in 1999 to $ 2,970, 098, followed by a considerable increase in 2000 to $ 3,281,266, followed by a further increase in 2001 to $ 3,420,431. Exports to North America – NAFTA Exports to North America – NAFTA amounted to $ 24,131,708 in 1998, this was followed by an increase in 1999 to $ 28,422, 448, followed by another increase in 2000 to 29,305,619, followed by a decrease in 2001 to $ 25,593,026, followed by a further decline in 2002 to $ 23,527,587. Within this region, the largest amount of exports goes to the United States. In 1998, exports to the US amounted to $ 22,666,766; this was followed by an increase in 1999 to $ 26,637,014, followed by another increase in 2000 to $ 27,453,160, followed by a considerable decline in 2001 and 2002 to $ 23,928,840 and $ 21,806,200 respectively. Exports to Arab countries Exports to Arab countries amounted to $ 5,308,894 in 1998; this was followed by considerable increases to $ 5,411,535, $5,552,713, followed $ 7,719,797 in 1999, 2000 and 2001 respectively. Within this region the largest amount of exports goes to Saudi Arabia. Overall, amounts of exports to Saudi Arabia have increased throughout the period. In 1998, exports amounted to $ 3,238,640; this was followed by an increase in 1999 to $ 3,320,441, followed by another increase in 2000 to $ 3,566,880. In 2001 exports to Saudi Arabia went further up to reach $ 4,010,793.

115

F. Comparison between Egyptian and Foreign Sources of Statistics for Exports of Furniture, Lighting, Signs, Prefabricated Buildings (HS1996 Code # 94)

The following table presents a comparison between the data provided by the Ministry of Foreign Trade and the United Nations Statistics Division on Egyptian exports of Furniture, Lighting, Signs and Prefabricated Buildings classified by Region. The comparison reveals large discrepancies between the sources not only in terms of the figures provided for each region, but also in terms of the general pattern of exportation as a whole. UNSTATS statistics for total exports are higher than those provided by MOFT by 210 % in 1999, 107% in 2000 and 242% in 2001.

Table 48: Comparison between Egyptian and Foreign Sources of Statistics for Exports of

Furniture, lightings, signs & prefabricated buildings (HS1996 Code # 94)


European Union 19.451 4.62 19.585 5.25 17.755 4.43 Europe - Other 1.419 0.12 0.294 0.05 0.276 0.22 Asia (excluding Arab countries) 1.158

0.47 1.662

0.49 1.684

0.37 Arab Countries 5.412 8.65 5.552 7.55 7.719 7.2 North America - NAFTA 28.422 4.64 29.306 4.34 25.593 3.78 Africa (excluding Arab countries) 0.257

0.3 0.307

0.55 0.877

0.19 Latin America & Other 0.824 0.12 0.668 0.1 0.618 0.05

Total 56.943 18.920 57.374 18.330 54.522 16.240

0102030405060

Val

ue U

S$ 0

00,0

00

99 2000 2001

Graph 54: Comparison of Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Buildings

(HS 1996 Code 94) - UNSTATS Vs. MOFT

UNSTATS MOFT

Comparison on a Regional & By Country Level

116

Exports to the EU Large number disparities can be observed in the figures provided by both sources for amounts of exports to the European Union throughout the designated period. In 1999, amounts exports to the EU according to the UNSTATS amounted to US$ 19,451,000, this was followed by an increase in 2000 to US$ 19,585,000 followed a decline in 2001 to US$ $ 17,755,000. Exports to the EU according to the MOFT on the other hand, were much lower, in 1999 exports amounted to $ 4,620,000, this was followed an increase in 2000 to $ 5,250,000, followed by a decrease in 2001 to $ 4,430,000.

Graph 55:

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Comparison of Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Buildings (HS 1996 Code 94) to the EU

- UNSTATS Vs. MOFT

UNSTATS MOFT

Exports to NAFTA According to the UNSTATS, exports to North America – NAFTA amounted to $28,422,000 in 1999, $ 29,306,000 in 2000 and $ 25,593,000 2001. Exports to North America according to the MOFT on the other hand were US$4,640,000, US$ 4,340,000 and US$ 3,780,000 in 1999, 2000 and 2001 respectively. Graph 56:

0

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Comparison of Exports of Furniture, Lighting, Signs, Prefabricated Building to NAFTA - UNSTATS Vs. MOFT

UNSTATS MOFT

117

Exports to the Arab countries

Exports to the Arab countries on the other hand illustrate a different trend, with the statistics provided by MOFT being much higher. This can be explained however by the fact that several Arab countries did not report their trade flows to the UN. Such countries include some of Egypt's main export markets for furniture including Libya, Sudan, Bahrain and UAE. in 1999 according to UNSTATS exports amounted to $ 5,412,000 this was followed by an increase in 2000 to$ 5,552,000, followed by an increase in 2001 to 7,719,000. Exports to the Arab countries according to the MOFT in 1999 amounted to $ 8,650,000, this was followed by an decline in 2000 to $ 7,550,000, followed by a further decline in 2001 to $ 7,200,000.

0

5

10

Val

ue

US$0

00,0

00

99 2000 2001

Graph 57: Statistics for Egyptian Exports of Furniture, Prefabricated Buildings (HS 1996 Code

94) to the Arab Region - UNSTATS Vs. MOFT

UNSTATS MOFT

An examination of the values provided by the abovementioned sources on a by country basis reveals a different trend with the values provided by the UNSTATS being considerably higher than those provided by MOFT. For Example, according to the UNSTATS, Egyptian exports to Lebanon were US$1.4 million, US$ 1.7 million, US$ 1.5 million and US$ 2 million in 1998, 1999, 2000 and 2001 respectively. The statistics provided by MOFT on the other hand reported US$0.5 million in 1998, US$ 0.5 million in 1999, US$0.3 million in 2000 and US$ 0.2 million in 2001. A similar trend can be observed for Saudi Arabia.

Table 49: Comparison of Egyptian Exports Statistics for Furniture, Lighting, Signs & Prefabricated Building to Lebanon & Saudi Arabia

1998 1999 2000 2001 Country UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT UNSTATS MOFT Lebanon 1,430,520 409,582 1,704,549 472,184 1,475,349 275,254 1,957,904 231,889Saudi Arabia 3,238,640 2,688,335 3,320,441 3,359,082 3,566,880 2,774,956 4,010,793 3,688,654

0

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UNST

ATS

MOFT

1998 1999 2000 2001

Graph 58: Comparison of Exports Statistics for Furniture & Prefabricated Buildings to Selected Arab Countries -

UNSTATS Vs. MOFT

Lebanon Saudi Arabia 118

3.5 Observations & Recommendations

119

120

3.5 Observations & Recommendations Observations Having gone through a process of information gathering, it has been realized that:

1- While the Ministry of Foreign Trade issues publications tackling the Egyptian trade flows on both the aggregate and commodity level, statistics are originally obtained from the Central Agency for Public Mobilization and Statistics – CAPMAS which is the only agency officially responsible for compiling and publishing statistics and data in Egypt.

2- The data published by CAMPAS covering trade flows is initially obtained from the

General Tax Authority – Ministry of Finance

A general examination of the statistics gathered on imports and exports reveals the following:

1- The system used by the Customs and Tax Authorities and CAPMAS are unreliable, raising questions regarding the accuracy of the data being published. As a matter of fact, in his book titled "Information Technology in Egypt"3 Dr. Gamal El Ghetas raised the issue of international coding and classification. Dr. Ghetas claims that the Egyptian Customs and Tax Authority do not abide with the international coding and classification system developed by the United Nationswhile documenting trade flows. As a consequence, statistics forwarded to the CAPMAS for the sake of processing and publishing tends to be lacking in terms of reliability, making statistics published by government authorities inaccurate and unrepresentative of actual trade flows (Ghetas, 173).

2- A comparison between Egyptian and International sources statistics on Egyptian trade

in wood and wood products (HS 1996 code 44) and furniture and prefabricated buildings (HS 1996 code 94) has indeed revealed great discrepancies with foreign statistics usually presenting Egyptian imports and exports to be much higher than the statistics provided by Egyptian authorities. These discrepancies could also be a result of one or a combination of the following factors:

a. Under invoicing by exporters and importers b. Price adjustments at the customs authorities of importing countries which result

in number discrepancies with the official statistics produced by the exporting countries

c. Inaccurate documentation by the government authorities Recommendations Measures should be taken by the Egyptian government to improve the process of information gathering and processing. This in turn entails the following:

1- the development of a documentation system at the customs and tax authority that is in line with international standards and practices formulated by the United Nations

2- the provision of technical and financial support to the CAPMAS in order to enable them to upgrade the information gathering and processing techniques being utilized.

3 El Ghetas, Gamal, "Information Technology in Egypt" Dar El Sherouk, 2003

4. Labor

121

122

4.1 Main Sources of Information Information covering the labor force has been obtained from the following organizations:

• The Ministry of Industry and Technological Development • The Ministry of Local Development • The Ministry of Education • The Ministry of Higher Education • The Ministry of Insurance and Social Securities

4.2 Summary of Findings Workers in the Furniture and Woodworks Industrial entities – the Ministry of Industry and Technological Development

According to the General Organization for Industrialization – GOFI, the total number of workers in the sector is 34,765, with Cairo (14,881 workers) having the largest number followed by Giza (4,637 workers) and Alexandria (3,375 workers). According to data obtained from the Industrial Registry on the total number of workers in the furniture and woodworking industries, is 10,094 workers of which the total number of workers employed by furniture factories (code 3321) is 6,571, almost two times as large as the number of workers in factories registered as woodworks producers (code 3311) which amounted to 3,523. Furthermore, Sharkeya has the largest number of workers in both categories totaling 6,412 workers. Cairo, which ranks second, has a total number of workers of 3,211. Damietta on the other hand has a total of 1600 workers.

A comparison between the data reveals very large disparities between the numbers,

with the figures obtained from GOFI appearing to be much larger than those provided by the Industrial Registry. Figures provided for Cairo and Alexandria are good examples for these discrepancies. GOFI reported 14,881 workers in Cairo while the Industrial Registry reported 3,211, revealing a difference of 11,670 workers. The numbers provided for Alexandria by GOFI is 3,375 workers while the Industrial Registry reported 948 workers; a difference of 2427 workers between the two sources. These inconsistencies may be attributed to the fact that GOFI's statistics are based on a field survey conducted early this year. The Industrial Registry database on the other hand includes the number of workers declared by the factories during their application for a registration with the industrial registry. It is not clear whether the Industrial Registry undertakes a regular process of updating statistics concerning entities that are already registered. It can therefore be concluded that the data obtained from GOFI is more comprehensive than that provided by the Industrial Registry. Workers registered with Furniture and &Woodworks Cooperatives – Ministry of Local Development Statistics

The total number of workers employed by workshops operating in Egypt is 204,052. The hierarchy in terms of the size of labor employed within each governorates in descending order is Damietta (56,174 workers), Cairo (32,448 workers), Giza (14,928 workers) followed by Dakahleya (14,499 workers), Alexandria (11,607 workers), Gharbeya (10,630 workers) and Sharkeya (10,387 workers).

123

Estimation for the Total Number of Workers in the Furniture and Woodworks Industry

Interviews with owners of factories and workshops have revealed that on average each woodworks factory or workshop requires at least 5 workers in order to operate effectively. Furthermore, there is a considerable number of medium sized and large factories that employ larger numbers of workers (15 to over 100 employees). Based on the calculation made by the project team, the total number of furniture and woodworks entities was estimated to be 193,725. It therefore follows that the number of labor employed by the sector is at least 968,625 (number of entities x 5 workers). Graduates of Industrial Schools affiliated to the Ministry of Education The total number of graduates from industrial schools of relevance to the furniture and woodworks industry increased from 90,959 in 1998 to 92,476 in 1999 and 94,072 in 2000. This was followed by a decrease to 91,786 in 2001 to be followed by a significant increase to 95,289 in 2002. Trainees in Vocational Training Centers Overall the number of trainees in carpentry and furniture (5,989) is much larger than the number for trainees in inlaying and finishing (858). Furthermore, the total number of trainees has been generally declining with few fluctuations in the middle. In total, the number of trainees declined from 350 in 1995-1996 to 320 in 1996-1997. This was followed by a dramatic decline to 15 trainees 1997-1998. The year 1998-1999 saw an increase in the total number of trainees to 257, followed by a decline in 1999-2000 to 248, followed by steady declines onwards until 2002 (2000-2001 – 231 trainees, 2001-2002 – 195 trainees). The year 2002-2003 saw a slight increase to 209 trainees. Graduates of the faculty of Applied Arts– Interior Design and Furniture Section The total number of graduates from the Interior Design and Furniture Section declined from 360 in 1999-2000 and 2000 – 2001 to 260 in 2001-2002 and 155 in 2002-2003. The number of graduates is expected to decline even more to reach 75 in 2003-2004. The decrease in the number of graduates is partly a result of changes in the education policy (the cancellation of grade 6 in primary school during the 1980s which lead to an overall increase in the number of secondary school and university graduates during the late 1990s and early 2000s.

4.3 The Number of Workers in the Furniture and Woodworks Industry 4.3.1 Workers in the Furniture and Woodworks Industrial Entities – the General Organization for Industrialization - GOFI The following table presents information obtained from the General Organization for Industrialization (GOFI) on the number of workers in the furniture and woodworks industrial sector classified by geographic location. The data reveals that the total number of workers in the sector is 34,765, with Cairo (14,881 workers) having the largest number followed by Giza (4,637 workers) and Alexandria (3,375 workers). While this information provides an overall idea of the size of the labor force in terms of the number of workers employed by industrial establishments, it can not be used effectively for measuring the growth rate since the year in which the workers were registered in is not available.

Table 50: Number of Workers Classified by Geographic Location - GOFI

Governorate Number of workers % of Total

Cairo 14881 0.43 Giza 4637 0.13 Alexandria 3375 0.10 Sharkeya 3295 0.09 Damietta 2342 0.07 Qaloubeya 1806 0.05 Gharbeya 1615 0.05 Dakahleya 463 0.01 Other 2351 0.07

Total 34765 1.00 Source: GOFI Graph 59:

14881

4637 3375 3295 2342 1806 1615463

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Geographic Distribution of Workers in the Furniture & Woodworks Industrial Entities

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125

4.3.2 The Number of Workers in the Furniture and Woodworks Industrial Entities – the Industrial Registry The following table presents data obtained from the Industrial Registry on the number of workers in the furniture and woodworking industries. The data is divided into categories namely workers employed by woodworks companies – code 3311 and workers employed by furniture companies – code 3321. The total number for both categories (10,094 workers) is very low, especially when the size of the sector in terms of number of entities and production capacity are considered. This number however could be explained by the fact, that for various reasons, most factories are reluctant to declare the actual number of employees. Table 51: The Number of Workers in the Furniture and Woodworks Industrial entities

Registered at Industrial Registry

Industry Code Governorate

3311 3321 Total

Sharkeya 817 5595 6412 Cairo 675 2536 3211 Damietta 679 921 1600 Giza 475 1113 1588 Alexandria 479 469 948 Qaloubeya 144 696 840 Dakahleya 229 94 323 Port Said 84 68 152 Kafr Al-Sheikh 31 2 33 Gharbeya 294 241 535 Monofeya 3 3 6 Beheira 26 74 100 Ismailia 104 17 121 Beni Seuif 7 7 Fayoum 13 15 28 Menia 39 66 105 Asiout 142 154 296 Sohag 22 93 115 Qena 19 2 21 Aswan 19 19 Red Sea 19 19 North Sinai 20 7 27

Total 3523 6571 10094 An examination of the data also reveals that the total number of workers employed by furniture factories (code 3321) is 6571, almost two times as large as the number of workers in factories registered as woodworks producers (code 3311) which amounted for 3523. Furthermore, Sharkeya has the largest number of workers in both categories totaling 6,412 workers of which 5,595 are employed by furniture factories (code 3321) and 817 are employed by woodworks factories (code 3311). Cairo, which ranks second, has a total number of workers of 3211 of which 2,536 are employed by furniture firms and 675 are

employed by woodworks firms. Damietta on the other hand has a total of 1600 workers of which 921 are employed by furniture factories and 679 employed by woodworks factories.

Graph 60:

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Geographic Distribution of Woodworking industries Labour (Industry Code: 3311 & 3321) - Industrial Registry

3311 3321

126

4.3.3 Comparison between the Figures for Labor Provided by GOFI and the Industrial Registry The table below presents a comparison between the information obtained from the General Organization for Industrialization (GOFI) and the Industrial Registry for the total number of workers in the furniture and woodworking industries within each governorate. Table 52: Comparison between the Figures for Labor GOFI vs. the Industrial Registry

Governorate GOFI Industrial Registry Discrepancies

Cairo 14881 3211 11670 Giza 4637 1588 3049 Alexandria 3375 948 2427 Sharkeya 3295 6412 -3117 Damietta 2342 1600 742 Qaloubeya 1806 840 966 Gharbeya 1615 535 1080 Dakahleya 463 323 140 Other 2351 1049 1302

Total 34765 16506 18259 A comparison between the data reveals very large disparities between the numbers, with the figures obtained from GOFI appearing to be much larger than those provided by the Industrial Registry. Examples are the figures given for Cairo and Alexandria. GOFI reported 14,881 workers in Cairo, while the Industrial Registry reported 3,211, revealing a difference of 11,670 workers. The number provided for Alexandria by GOFI is 3,375 workers while the Industrial Registry reported 948 workers; are difference of 2427 workers. These discrepancies may be attributed to the fact that GOFI's statistics are based on a field survey conducted during the first quarter of 2003. The Industrial Registry database on the other hand includes the number of workers declared by the factories during their application for a registration with the industrial registry. It is not clear whether the Industrial Registry undertakes a regular process for updating the statistics concerning entities that are already registered. It can therefore be concluded that the data obtained from GOFI is more comprehensive than that provided by the Industrial Registry. Graph 61:

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GOFI Industrial Registry

127

4.3.4 Number of Workers registered with Furniture and &Woodworks Cooperatives – Ministry of Local Development Statistics The table presented below presents the numbers of workers registered at the furniture and woodworks workshops that are registered with the furniture and woodworks cooperatives – Ministry of Local Development. An examination of the information reveals that the total number of workers employed by workshops operating in Egypt is 204,052. Furthermore, the hierarchy in terms of the number of labor employed within each governorate in descending order is Damietta (56,174 workers), Cairo (32,448 workers), Giza (14,928 workers) followed by Dakahleya (14,499 workers), Alexandria (11,607 workers), Gharbeya (10,630 workers) and Sharkeya (10,387 workers). Table 53: Number of Workers Registered with Furniture & Woodworks Cooperatives

Governorate No. of Workers Dammieta 56,174Cairo 32,448Giza 14,928Dakahleya 14,499Alexandria 11,607Gharbeya 10,630Sharkeya 10,387Qalubeya 9,364El Beheira 7,113El Monofeya 6,291Fayoum 5,119Kafr El Sheikh 4,499Menya 4,215Sohag 3,071Assuit 2,773Qena 2,401Beni Sueif 1,728Ismalia 1,412Aswan 1,356Suez 1,140Other 2,897Total 204,052

Source: Ministry of Local Development Graph 62:

Number of Workers Registered with Furniture & Woodworks Cooperatives

Menya; 4,215

Sohag; 3,071

Assuit; 2,773

Qena; 2,401

Beni Sueif; 1,728

Ismalia; 1,412

El Monofeya; 6,291

Fayoum; 5,119

Kafr El Sheikh; 4,499

El Beheira; 7,113

Qalubeya; 9,364

Sharkeya; 10,387

Gharbeya; 10,630

Alexandria; 11,607 Dakahleya; 14,499 Giza; 14,928

Cairo; 32,448

Dammieta; 56,174

Asw an; 1,356Suez; 1,140

Other; 2,897

128

4.3.5 Furniture and Woodworking Entities and Workers Registered at the Ministry of Insurance and Social Securities. The following table illustrates the number of furniture and woodworks companies that have applied for registration with the Ministry of Insurance and Social Affairs over the period 1998 – 2003. The table also shows the number of employees and workers applying for insurance and social securities.

Table 54: No. of Furniture & Woodworks Entities and Workers Registered at the Ministry of Insurance & Social Securities

Year of Registry No. of

Entities

No. of Male

Employees

No. of Female

employeesTotal No. of Employees

1998 1443 2523 322 2845 1999 1431 2467 361 2828 2000 1235 1977 330 2307 2001 1086 1714 294 2008 2002 851 1107 221 1328 2003 347 349 74 423

An examination of the data reveals that the total number of entities applying for registration with the Ministry of Insurance and Social Securities has been declining over the years; from 1,443 in 1998 to 1,431 in 1999, 1235 in 2000, 1,086 in 2001, 851 in 2002 and 347 in 2003. The same trend can be detected for the number of workers being registered. The total number fell from 2,845 in 1998 to 2,828 in 1999, 2,307 in 2000, 2,008 in 2001, 1,328 in 2002 and 423 in 2003. Furthermore, according to the data, on average each newly registered establishment employs 1.8 workers. This number is not a good representation of the actual size of furniture and woodworks establishments, the smallest of which usually require at least 3 workers to operate. The project team was also unable to obtain statistics for the total number of entities and registered workers. This is due to the fact that the data provided does not include the number of previously registered entities (before 1998) that are maintaining their registration with the Ministry of Insurance and Social Securities.

Graph 63:

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No. of Entities Total No. of Employees

129

130

Estimation of the Total Number of Workers Employed in the Sector The figures presented in the foregoing pages illustrate the statistics available within the Egyptian governmental organizations regarding the number of registered workers employed by the furniture and wood works sector. As mentioned previously, the General Organization for Industrialization indicates that there are 34,765 workers employed by the 2,503 factories recognized by GOFI as industrial establishments. It thus follows, that on average, the number of employees declared by each factory is 14 employees and workers. Figures provided by the Ministry of Local Development indicate that there are 204,052 workers employed in the 89,612 workshops that are registered with furniture and woodworks cooperatives i.e. an average of 2 workers in each workshop.

Table 55: Number of Workers Registered with GOFI and the Ministry of Local Development

Source Entities Labor Labor/Entity GOFI 2,503 34,765 14 Ministry of Local Development 89,612 204,052 2

Interviews with owners of factories and workshops however have revealed that on average each woodworks factory requires at least 5 workers in order to operate effectively. Furthermore, there is a considerable number of medium sized and large factories that employ larger numbers of workers (15 to over 100 employees). Based on the calculation reached in section 2.13.2 on the number of woodworks and furniture entities, the total number of entities was estimated to be 193,725. It therefore follows that the number of labor employed by the sector is at least 968,625. Estimated Number of Entities x Minimum Number of Workers Required for Operation 193,725 entities x 5 workers = 968,625

131

4.4 Number of Skilled Workers and Graduates with Training of Relevance to the Furniture and Woodworks Industry 4.4.1 Number of Technical Schools classified by Geographic location- CAPMAS The data in the following table presents information obtained from the CAPMAS on the number of technical schools providing training in areas related to the furniture and woodworks industry classified by geographic location. Of these activities spinning and weaving have the largest number of schools (723 schools) followed by carpentry (256 schools), building & construction (155) and leather (41). The governorates with the largest total number of schools in descending order are Gharbeya (129 schools), Cairo (89 schools), Kafr El Sheikh (79 schools), Alexandria (79 schools) and Giza (58 schools).

Table 56: Number of Technical Schools classified by Geographic location

School Governorate

Carpentry Building and Construction

Spinning & Weaving Leather

Gharbeya 31 3 89 6 Sohag 21 10 15 3 Cairo 20 11 52 6 Asiout 18 5 32 1 Beni Seuif 17 6 23 0 Kafr Al-Sheikh 16 7 55 1 Giza 13 16 26 3 Beheira 12 7 24 0 Dakahleya 11 10 23 0 Sharkeya 11 10 28 3 Monofeya 11 4 25 0 Alexandria 10 10 56 3 Menia 10 3 24 2 Qaloubeya 8 7 33 5 Ismailia 6 7 31 2 North Sinai 6 4 15 0 Damietta 5 3 25 3 Fayoum 4 4 25 0 Aswan 4 4 16 0 Luxor 4 4 6 0 The New Valley 4 4 14 0 Port Said 3 3 21 1 Suez 3 3 24 1 Matrouh 3 1 13 1 Red Sea 2 1 12 0 South Sinai 2 2 6 0 Qena 1 6 10 0

Total 256 155 723 41 Source: CAPMAS

Graph 64:

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No. Of Technical Schools for Woodworks and Furniture Related Activities

Carpentry Building and Construction Spinning and Weaving Leather

The largest number of carpentry schools is found in Gharbeya (31), followed by Sohag (21), Cairo (20), Asiout (18) and Beni Seuif (17). The largest number of Spinning and Weaving schools is also Gharbeya which includes 89 schools, followed by Alexandria (56 schools), Kafr El Sheikh at (55 schools) and Cairo (52 schools). The largest number of building and construction Schools is found in Giza (16) and Cairo (11) followed by Damietta, Dakahelya, and Sohag each of which includes 10 schools. The number of schools providing training in the production of leather is much lower than the other specializations with Gharbeya and Cairo having the largest number of schools; 6 each, followed by Qaloubeya (5 schools), Sohag, Giza, Sharkeya, Alexandria and Damietta which include 3 schools each.

132

133

4.4.2Number of Graduates of Industrial Schools affiliated to the Ministry of Education The following table presents data obtained from the Ministry of Education on the number of graduates from industrial schools with specializations of relevance to the wood works and furniture sector. The data includes the number of graduates (both male and female) from the following specializations over the period 1997-2002:

• carpentry • wood carving • wood sawing • inlaying and marquetry • ornamenting • electrical apparatus maintenance • electronics and computers • industrial electronics and control • electronics engineering, and computer science

An examination of the data reveals that the total number of graduates increased from 90,959 in 1998 to 92,476 in 1999 and 94,072 in 2000. This was followed by a decrease to 91,786 in 2001 to be followed by a significant increase to 95,289 in 2002.

Table 57: Graduates from Industrial Schools of Relevance to the Furniture Industry

Year Specialization No. Male

Graduates No. Female Graduates Total

Furniture Carpentry 11,488 574 12,062 Wood Carving 411 0 411 Wood sawing 201 0 201 Inlaying and Marquetry 210 0 210 Ornamenting 13,825 23,181 37,006 Electrical apparatus maintenance 22,444 7,159 29,603 Electronics and computers 4,515 5,521 10,036 Industrial electronics and control 238 79 317 Electronics engineering 515 247 762

1997 - 1998

Computer sciences 330 21 351 Total Graduates (1997-1998) 54,177 36,782 90,959


1998 - 1999


134

Year Specialization No. Male

Graduates

No. Female

GraduatesFurniture Carpentry 11,000 195 11,195 Wood Carving 432 0 432 Wood sawing 328 451 779 Inlaying and Marquetry 217 0 217 Ornamenting 13,471 23,190 36,661 Electrical apparatus maintenance 23,287 8,630 31,917 Electronics and computers 5,358 5,695 11,053 Industrial electronics and control 284 469 753 Electronics engineering 477 159 636

1999 - 2000



2000 - 2001


Furniture Carpentry 12,388 89 12,477 Wood Carving 488 0 488 Wood sawing 147 147 Inlaying and Marquetry 139 139 Ornamenting 12,974 24,488 37,462 Electrical apparatus maintenance 22,078 8,508 30,586 Electronics and computers 5,600 7,033 12,633 Industrial electronics and control 154 127 281 Electronics engineering 404 247 651

2001 - 2002


Grand Total (98-2002) 270,961 193,621 464,582 Source: Ministry of Education Carpentry: According to the data, the overall number of graduates from the Carpentry section increased over the designated period with several fluctuations in the middle. The total number of graduates decreased from 12,062, in the year 1997-1998 to 11,145 in 1998-1999. This was followed by an increase in 1999-2000 up to 11,195 and 12, 417 in 2000-2001, followed by a further increase in 2001-2002 up to 12477. It is important to note that the number of male

graduates throughout the period was consistently larger than female graduates. In 1997-1998 the difference between male graduates and female graduates amounted to 10914. Graph 65:

0

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Technical School Graduates

Furniture Carpentry Ornamenting Wood CarvingWood sawing Inlaying and Marquetry

Ornamenting The 'ornamenting' specialization witnessed an overall increase in the total number of graduates over the designated period. In the year 1997-1998, total number of graduates amounted to 37,006, with the number of female students being much larger than that of male students. This number decreased in 1998-1999 to 36,140, again with female graduates constituting the bulk of graduates. The year 1999-2000, 2000-2001 and 2001-2002 witnessed an increase in the number of graduates up to 36,661, 36,781 and 37, 462 respectively with the same gender pattern. Wood Carving: The number of graduates from the wood carving specialization on the other hand was a considerably less when compared to the figures provided for furniture carpentry. In the year 1997-1998, total graduates amounted to 411, (all male). This number decreased in 1998-1999 to 389 (all male). The year 1999-2000 witnessed an increase in the number of graduates up to 432 (all male), which was followed by another increase in 2000-2001 up to 434 students (all male), and another increase in 2001-2002 to 488 graduates (all male). Overall the total number of graduates increased over the designated period.

135

136

Wood Sawing The specialization 'wood sawing' graduates a total number of students that is even less than that of 'wood carving'. In the year 1997-1998, the total number of graduates was 201, (all male). This number increased in 1998-1999 to 208 (all male) followed by a considerable increase in 1999-2000 up to 779 graduates, with a noticeable rise in female graduates, from zero in 1998-1999 to 451 female graduates in 1999-2000.This was followed by a decline in 2000-2001 to 326 students (all male), and another decrease in 2001-2002 to 147 graduates (all male). Overall there was a considerable decline in the number of graduates when the figures for 1997-1998 are compared with those of 2001-2002. Inlaying & Marquetry The 'Inlaying and Marquetry' specialization also witnessed an overall decline in the total number of graduates over the designated period with fluctuations from one year to another. In 1997-1998, the total number of graduates amounted to 210, (all male). This number decreased in 1998-1999 to 182 (all male). The year 1999-2000 witnessed an increase up to 217 (all male), which was followed by a decrease in 2000-2001 to 204 students (all male), and another decline in 2001-2002 to 139 graduates (all male). Gender Pattern An examination of the data reveals that wood carving, wood sawing, and inlaying and marquetry are completely dominated by male graduates. Furthermore, while furniture and carpentry has a considerable number of female graduates, the number of females is less than the number of male graduates. The 'ornamenting' specialization appears to be only section dominated by female graduates.

4.4.3 Number of Trainees in Vocational Training Centers The following table presents data obtained from the Ministry of Local Development on the number of trainees on Carpentry and Furniture and Inlaying and Finishing during the period 1979 - 2003. Overall the number of trainees in carpentry and furniture (5,989) is much larger than the number for trainees in inlaying and finishing (858). Furthermore, the annual number of trainees has generally been declining with few fluctuations in the middle. In total, the number of trainees declined from 350 in 1995-1996 to 320 in 1996-1997 to 320. This was followed by a dramatic decline to 15 trainees in 1997-1998. The year 1998-1999 saw an increase in the total number of trainees to 257, this was followed by a decline in 1999-2000 to 248, followed by steady declines onwards until 2002 (2000-2001 – 231 trainees, 2001-2002 – 195 trainees). The year 2002-2003 saw a slight increase to 209.

Table 58: Number of Trainees in Vocational Training Centers

Year Carpentry & Furniture

Inlaying & Finishig Total

1979-1995 4365 657 5022 1995-1996 295 55 350 1996-1997 287 33 320 1997-1998 15 15 1998-1999 235 22 257 1999-2000 227 21 248 2000-2001 199 32 231 2001-2002 177 18 195 2002-2003 189 20 209 Total 5989 858 6847

Ministry of Local Development Graph 66:

295

55

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1995-1996

1996-1997

1997-1998

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1999-2000

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2001-2002

2002-2003

Number of Vocational Training Graduates

Carpentry & Furniture Inlaying & Finishig

137

4.4.4 The faculty of Applied Arts Graduates – Interior Design and Furniture Section The following table presents data obtained from the Ministry of Higher Education on the number of graduates from the faculty of Applied Arts- Interior design and Furniture Section. The data reveals that the total number of graduates declined from 360 graduates in 1999-2000 and 2000 – 2001 to 260 in 2001-2002 and 155 in 2002-2003. The number of graduates is expected to decline even more to reach 75 in 2003-2004. The decrease in the number of graduates is partly a result of changes in the education policy (the cancellation of grade 6 in primary school during the 1980s which lead to an overall increase in the number secondary school and university graduates during the late 1990s and early 2000s.

Table 59: Graduates of the Faculty of Applied Arts - Interior Design and Furniture section

Year No. of

graduates 1999 - 2000 360 2000 - 2001 360 2001 - 2002 260 2002 - 2003 155 2003 - 2004 75

Total 1210 Source: Ministry of Higher Education

Graph 67:

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138

5. Customs & Taxes

139

140

5 Custom Duties and Sales Tax Paid by the Furniture & Woodworks Sector 5.1 Main Sources of Information: Information covering custom duties and taxes imposed on the furniture and woodworks sector has been requested from the Ministry of Finance. This information included the following:

1- The value of sales tax paid by the sector over the period 1999-2003 2- The value of custom duties paid by the sector over the period 1999-2003 3- The total value of taxes paid by the sector over the period 1999-2003

In this context, the Ministry of Finance has provided statistics covering the total value of taxes paid by the sector. Information pertaining to the value of sales tax and custom duties however has not been provided. The project team has therefore estimated the value of custom duties and sales tax charged on the imports of wood, wood products and furniture. Calculations were based upon the percentage levied on imports as declared by the Egyptian Government. 5.2 Summary of Findings: Custom Duties, Sales Tax and Service Fees Paid by Importers of Wood & Wood Products There are discrepancies between the values of custom duties and sales taxes charged on the different types of wood with importers of some kinds of wood such lumber, plywood and fiber board paying high tax rates while others such as importers of veneer ply sheets and logs pay low rates. According to estimates, the total value of customs paid on imports of wood and wood products was US$ 46.9 million in 1999, US$ 49.2 million in 2000, US$ 46 million in 2001 and US$ 44.8 million in 2002. The value of sales tax and service fees amounted to US$ 28.28 million in 1999, US$ 29.96 million in 2000, US$ 27.26 million in 2001 and US$ 26.29 million in 2002. Combined, these values amounted to US$75 million (8.2% of the value of imports) in 1999, US$79.18 million (8.3%) in 2000, US$ 73.31 million (8.5%) in 2001 and US$ 71.12 million (8.4 %) in 2002. Custom Duties, Sales Tax and Service Fees Paid on Imports of Furniture, Lighting, Signs and Prefabricated Buildings (HS 1996 Code 94) The total value of customs paid on imports of Furniture, Lightings, Signs and Prefabricated Buildings was US$ 11.32 million in 1999, US$ 12.69 million in 2000, US$ 10.1 million in 2001 and US$ 12.47 million in 2002. The value of sales tax and service fees amounted to US$ 0.3 million in 1999, US$ 0.99 million in 2000, US$ 0.34 million in 2001 and US$ 0.4 million in 2002. Combined, these values amounted to US$11.62 million (35.4% of the value of imports) in 1999, US$13.68 million (39%) in 2000, US$ 10.44 million (33.8%) in 2001 and US$ 12.87 million (35.9 %) in 2002. Most of the taxes paid on imports of this product group are in the form of custom duties. Sales tax and service fees charged are very low and in the case of several sub-categories including office furniture, kitchen furniture, bedroom furniture and other wood furniture amount to zero.

141

General Taxes: The Total Number of Tax Payers - Furniture & Woodworks Registered at the General Tax Authority There is a total number of 108, 825 furniture and woodworks producers registered at the General Tax Authority of which furniture producers (48,277 entities) represents the largest number of registered producers followed by furniture traders (16,734 entities), wood sawing and carving (16,279) entities followed by wood traders (15,244 entities) and producers of doors and windows (8,290). Value of General Taxes charged on the Furniture & Woodworks Sector The total value of taxes paid by the sector increased gradually from L.E. 39 million in 98/99 to reach L.E. 54 million in 2002/2003. The total amount of taxes paid by the wood furniture industry is higher than that paid by other furniture sub sectors. In 1998-1999 the total amount paid by the wood furniture was L.E. 23 million while taxes paid by furniture (other) amounted to L.E. 16 million. The same trend prevails over the designated period with the wood furniture sub sector paying L.E. 32 million in 2002-2003 and the furniture (other) sub sector paying L.E. 22 million. Furthermore, the total number of furniture and woodworks tax payers are 108,825 entities while the estimated number of furniture and woodworks producers and traders is at least 193,725 (as indicated in section 2.13.2 of this report). It follows that 56% (if not less) bears the tax burden of the whole sector.

142

5.3 Custom Duties, Sales Tax and Service Fees Paid by Importers of Wood & Wood Products and Furniture The following tables present the values of custom duties and sales tax paid by importers of wood and wood products (HS 1996 Code 44) and furniture products (HS 1996 Code 94). It is worth pointing out that these figures which are a result of calculations carried out by the project team are based on the rates provided by the Egyptian Ministry of Finance. Furthermore, the calculations only included the product groups for which substantial amounts of imports were recorded by the Ministry of Foreign Trade. In other words, Product Groups classified as "Other" by Foreign Trade statistics are not accounted for. 5.3.1 Custom Duties, Sales Tax and Service Fees Paid by Importers of Wood & Wood Products (HS 1996 Code 44) The information provided in the following table presents the custom duties, sales tax and service fees paid by importers of wood and wood products over the period 1999-2002. An examination of the data reveals that there are discrepancies between the values charged on the different types of wood with importers of some kinds of wood such lumber, plywood and fiber board paying high tax rates while others such as importers of veneer ply sheets and logs pay low rates. The total value of customs paid on imports of wood and wood products was US$ 46.9 million in 1999, US$ 49.2 million in 2000, US$ 46 million in 2001 and US$ 44.8 million in 2002. The value of sales tax and service fees amounted to US$ 28.28 million in 1999, US$ 29.96 million in 2000, US$ 27.26 million in 2001 and US$ 26.29 million in 2002. Total taxes charged amounted to US$75 million (8.2% of the value of imports) in 1999, US$79.18 million (8.3%) in 2000, US$ 73.31 million (8.5%) in 2001 and US$ 71.12 million (8.4 %) in 2002.

Table 60: Custom Duties, Sales Tax and Service Fees Paid by

Importers of Wood & Wood Products (US$ 000,000)

Product Name Category 1999 2000 2001 2002

Total Imports 369.32 388.05 321.56 311.23Customs Value (8%) 29.55 31.04 25.72 24.90Sales Tax (5%) 18.47 19.40 16.08 15.56

4407100000 Lumber, coniferous (softwood) thickness < 6 mm Services Fees (0%) 0.00 0.00 0.00 0.00


4407920000 Beech lumber, lengthwise chipped, thickness > 6mm Services Fees (2%) 1.61 1.66 1.76 1.66

Total Imports 54.45 63.16 72.02 75.31Customs Value (10%) 5.45 6.32 7.20 7.53

4412190000 Plywood consisting solely of sheets of wood, each ply not Sales Tax (0%) 0.00 0.00 0.00 0.00

143

exceeding 6 mm Services Fees (0%) 0.00 0.00 0.00 0.00



4408909000 Veneer, ply sheet, not conifer or tropical, <6 mm thick Services Fees (0%) 0.00 0.00 0.00 0.00


4403201000 Logs, poles, coniferous not treated or painted, squared Services Fees (0%) 0.00 0.00 0.00 0.00


4411210000 Fiberboard of a density exceeding 0.5 g/cm3 but not exceeding 0.8 g/cm3; Not mechanically worked or surface covered Services Fees (2%) 0.05 0.16 0.18 0.22


4407910000 Oak lumber, lengthwise chipped, thickness > 6mm Services Fees (0%) 0.00 0.00 0.00 0.00


4412290000 Panels with at least one outer ply of non-coniferous wood Services Fees (0%) 0.00 0.00 0.00 0.00

Total Value of Imports 572.35 594.06 541.63 533.07

Total Customs 46.87 49.22 46.04 44.83Total Taxes and Service fees 28.28 29.96 27.26 26.29

Grand Total 75.14 79.18 73.31 71.12 Coniferous Lumber The customs rate charged on imports of Coniferous Lumber is 8% amounting to US$ 29.55 million in 1999, US$ 31.04 million in 2000, US$ 25.72 million in 2001 and US$ 24.9 million in 2002. The sales tax charged (5% of total imports) totaled US$ 18.47 million in 1999, US$ 19.4 million in 2000, US$ 16.1 million in 2001 and US$ 15.56 million in 2002. No service fees are charged on the imports of coniferous lumber. Beech Wood Imports of Beech wood are charged a custom duty of 8% of total imports, which amounted to US$ 6.43 million in 1999, US$ 6.66 million in 2000, US$ 7.04 million in 2001 and US$ 6.64 million in 2002. The sales tax on the other hand is 10% amounting to US$ 8.04 million in

1999, US$ 8.32 million in 2000, US$ 8.8 million in 2001 and US$ 8.3 million in 2002. The service fees amounted to US$ 1.61 million in 1999, US$ 1.66 million in 2000, US$ 1.76 million in 2001 and US$ 1.66 million in 2002. Graph 68:

05

101520253035404550

Val

ue U

S$

000,

000

1999 2000 2001 2002

Value of Customs, Sales Tax & Service Charge on Wood & Wood Products (HS 1996 Code 44)

Total Customs Total Taxes and Service fees

Veneer Ply sheets and Coniferous Logs While there are neither custom duties nor sales taxes charged on veneer ply sheets, the percentage of customs charged on Coniferous Logs and Poles is 5% amounting to US$1.6 million in 1999, US$ 1.26 million in 2000, US$ 0.91 million in 2001 and US$ 0.88 million in 2002. Fiberboard The percentage of custom duty paid by importers of fiberboard which is valued at 8% totaled US$ 0.49 million in 1999, US$ 1.64 million in 2000, US$ 1.79 million in 2001 and US$ 2.19 million in 2002. The sales tax and service fee on the other hand amounted to US$ 0.17 million in 1999, US$ 0.57 million in 2000, US$ 0.62 million in 2001 and US$ 0.77 million in 2002. Oak Lumber and Panel Board The 8% custom duty paid on Oak Lumber amounted to US$ 1.1 million, US$0.76 million, US$0.59 million and US$0.7 million in 1999, 2000, 2001 and 2002 respectively. It is worth noting that there are not sales tax and service fees charged on the imports of this category of wood. The custom duty paid on panel board is 33% of the value of imports. In 1999 customs amounted to US$ 2.15 million followed by US$1.54 million, US$2.8 million and US$2 million in 2000, 2001 and 2002 respectively.

144

145

5.3.2 Total Value of Custom Duties, Sales Tax and Service Fees Paid on Imports of Furniture, Lighting, Signs and Prefabricated Buildings (HS 1996 Code 94) The total value of customs paid on imports of Furniture, Lighting, Signs and Prefabricated Buildings was US$ 11.32 million in 1999, US$ 12.69 million in 2000, US$ 10.1 million in 2001 and US$ 12.47 million in 2002. The value of sales tax and service fees amounted to US$ 0.3 million in 1999, US$ 0.99 million in 2000, US$ 0.34 million in 2001 and US$ 0.4 million in 2002. Total taxes charged amounted to US$11.62 million (35.4% of the value of imports) in 1999, US$13.68 million (39%) in 2000, US$ 10.44 million (33.8%) in 2001 and US$ 12.87 million (35.9 %) in 2002. An examination of the figures presented in the following table reveals that most of the taxes paid on imports of this product group are in the form of custom duties. Sales tax and service fees charged are very low and in the case of several subcategories including office furniture, kitchen furniture, bedroom furniture and other wood furniture amount to zero.

Table 61: Value of Custom Duties, Sales Tax and Service Fees Paid on Imports of Furniture, Lighting, Signs and Prefabricated Buildings (HS 1996 Code 94)

Product Name Category 99 2000 2001 2002 Total Imports 8.06 7.24 6.37 7.14 Customs Value (40%) 3.224 2.896 2.548 2.856

Sales Tax (0%) 0 0 0 0

9405400000 Other electric lamps and lighting fittings

Services Fees (0%) 0 0 0 0

Total Imports 1.7 1.7 1.8 1.4 Customs Value (40%) 0.68 0.68 0.72 0.56 Sales Tax (0%) 0 0 0 0

9403300000 Office Furniture

Services Fees (0%) 0 0 0 0 Total Imports 0.4 0.5 0.4 0.5 Customs Value (40%) 0.16 0.2 0.16 0.2 Sales Tax (0%) 0 0 0 0

9403400000 Kitchen Furniture

Services Fees (0%) 0 0 0 0 Total Imports 0.7 0.8 0.6 0.5 Customs Value (40%) 0.28 0.32 0.24 0.2 Sales Tax (10%) 0.07 0.08 0.06 0.05

9403500000 Bedroom Furniture

Services Fees (3%) 0.0084 0.0096 0.0072 0.006 Total Imports 3.27 5.3 4.94 6.58 Customs Value (40%)

1.308 2.12 1.976 2.632

Sales Tax (0%) 0 0 0 0

9403600000 Other wooden furniture

Services Fees(0%) 0 0 0 0

146


Total Imports 3.36 7.88 4.09 5.85 Customs Value (40%) 1.344 3.152 1.636 2.34

Sales Tax (0%) 0 0 0 0

9403200000 Other metal furniture (other than office furniture)


Total Imports 2.77 3.42 4.03 3.55

Customs Value (40%)

1.108 1.368 1.612 1.42

Sales Tax (0%) 0 0 0 0

9401909000 Seats parts


Total Imports 5.79 4.34 2.49 3.45

Customs Value (20%)

1.158 0.868 0.498 0.69

Sales Tax (0%) 0 0 0 0

9402900000 Medical, dental, surgical & veterinary furniture Services Fees

(0%) 0 0 0 0

Total Imports 1.88 1.53 2.83 2.83 Customs Value (5%) 0.094 0.0765 0.1415 0.1415

Sales Tax (10%) 0.188 0.153 0.283 0.283

9405101000 Chandeliers and other lighting fixtures and equipment for theatre stages and studios

Services Fees (2%)

0.0376 0.0306 0.0566 0.0566

Total Imports 2.33 1.16 1.9 2.09 Customs Value (40%)

0.932 0.464 0.76 0.836

Sales Tax (0%) 0 0 0 0

9406009000 Prefabricated buildings of other materials Services Fees

(0%) 0 0 0 0

Total Imports 2.58 1.36 1.41 1.99 Customs Value (40%)

1.032 0.544 0.564 0.796

Sales Tax (0%) 0 0 0 0 9403900000 Furniture parts


Total Customs 11.32 12.69 10.10 12.47 Total Taxes and Service Fees 0.30 0.99 0.34 0.40

Grand Total 11.62 13.68 10.44 12.87

Graph 69:

0

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alue

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Value of Custom Duties, Sales Tax & Service Charges Paid on Imports of Furniture, Lighting, Signs & Prefabricated Buildings

Total Customs Total Taxes and Service Fees

Bedroom Furniture The 40% custom duties which is charged on the importation of bedroom furniture amounted to US$ 0.28 million in 1999, US$ 0.32 million in 2000, US$ 0.24 million in 2001 and US$ 0.2 million in 2002. The 10% sales tax amounted to US$ 0.07 million, US$0.08 million, US$ 0.06 million and US$ 0.05million in 1999, 2000, 2001 and 2002 respectively. Office Furniture The 40 % custom duty paid on the imports of wooden office furniture amounted to US$0.68 million in 1999, US$0.68 million in 2000, US$0.72million in 2001 and US$0.56million in 2002. Other Wooden Furniture and Furniture Parts Custom duties paid on imports of other wooden furniture totaled US$ 1.31 million in 1999, US$ 2.12 million in 2000, US$ 1.98 million in 2001 and US$ 2.63 million in 2002. The Customs charged on furniture parts on the other hand amounted to US$ 1.03 million, US$ 0.54 million, US$ 0.56 million and US$ 0.8 million in 1999, 2000, 2001 and 2002 respectively.

147

5.4 General Taxes 5.4.1 Total Number of Tax Payers - Furniture & Woodworks Registered at the General Tax Authority The following table presents the total number of furniture and woodworks entities registered at the General Tax Authority. An examination of the data reveals that there is a total number of 108, 825 furniture and woodworks producers registered at the General Tax Authority of which furniture producers (48,277 entities) represents the largest number of registered entities followed by furniture traders (16,734 entities), wood sawing and carving (16,279) entities followed by wood traders (15,244 entities) and producers of doors and windows (8,290).

Table 62: Number of Tax Payers - Furniture & Woodworks

Registered at the General Tax Authority Activity Number of Tax Payers

Furniture traders 16,734 Wood traders 15,244

Wood sawing & Carving 16,279 Producers of wooden boxes 714

Furniture producers 48,277 Producers of Doors & Windows 8,290 Various Wood Manufacturers 3,287 Total number of tax Payers 108,825

Graph 70:

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Total Number of Tax Payers - Furniture & Woodworks

148

5.4.2 Value of General Taxes charged on the Furniture & Woodworks Sector The following table presents the total values of general taxes paid by furniture and woodworks producers over the period 1998 – 2003. An examination of the figures reveals that the total value of taxes paid by the sector increased gradually from L.E. 39 million in 98/99 to reach L.E. 54 million in 2002/2003. This increase could be a result of one or a combination of the following factors:

1- the total value of production has been expanding over the past 5 fiscal years 2- the amount of taxes collected by the Egyptian government has been rising

Table 63: Total Value of General Taxes Paid by Furniture and Woodworks producers

Category 98/99 99/2000 2000/2001 2001/2002 2002/2003 wooden furniture 23,103,771 26,412,399 27,733,018 30,506,319 32,031,635furniture (other) 16,313,054 18,433,751 19,355,439 21,290,982 22,355,531Grand Total 39,416,825 44,846,150 47,088,457 51,797,301 54,387,166

Graph 71:

05,000,000

10,000,00015,000,00020,000,00025,000,00030,000,00035,000,000

Val

ue in

L.E

98/99 99/2000 2000/2001 2001/2002 2002/2003

Total Value of General Taxes Paid by the Furniture & Wood works Sector

w ooden furniture furniture (other)

An examination of the values also reveals that the total amount of taxes paid by the wood furniture industry is higher than that paid by other furniture sub sectors. In 1998-1999 the total amount paid the wood furniture was L.E. 23 million while taxes paid by furniture (other) amounted to L.E. 16 million. The same trend prevails over the designated period with the wood furniture sub sector paying L.E. 32 million in 2002-2003 and the furniture (other) sub sector paying L.E. 22 million. Furthermore, the total number of furniture and woodworks tax payers are 108,825 entities while the estimated number of furniture and woodworks producers and traders is at least 193,725 (as indicated in section 2.13.2 of this report). It follows that 56% (if not less) of the sector bears the tax burden of the whole sector.

149

150

6. Consumption

151

6. Local Consumption

6.1 Main Sources of Information: Statistics covering local consumption are divided into two main categories; namely:

• Household and Government Consumption: Information has been obtained from the Ministry of Planning

• Tourist Industry Consumption: Accurate statistics are lacking, the project team has therefore estimated consumption based on statistics obtained from the Ministry of Tourism on the number of hotels and rooms.

6.2 Summary of Findings Government and Household Consumption During fiscal years 2000-2001 and 2001-2002, local production of wood furniture and wood works represented 98% of total resources (imports represent less than 2%). Household consumption represents the largest market segment totaling L.E. 1550 million in 2000-2001 and L.E. 1756 million in 2001-2002. Household expenditure on wood furniture and woodworks is expected to rise even further in 2002-2003 and 2003-2004 to reach L.E. 1851 million and L.E. 1947 million respectively. The second largest market segment is Intermediate Agents amounting to L.E. 236.7 million in 2000-2001 and L.E. 270 million in 2001-2002. It is forecasted that the value devoted to intermediaries will rise to L.E. 313.3 million and L.E. 329.5 million in 2002-2003 and 2003-2004 respectively. Government expenditure has risen from L.E. 30 million in 2000-2001 to L.E. 35.1 million in 2001-2002. Capacity of the Egyptian Tourism Sector The general trend has been an increase in the number of hotels and rooms over the designated period. It is worth noting however that there are differences among the various hotel ratings with some hotel categories expanding more than others. Furthermore, increases in the number of hotels do not necessarily indicate an increase in the capacity of the tourism sector as these increases are sometimes accompanied by decreases in the total number of rooms. Tourist Industry's Expenditure of Furniture and Woodworks

During the year 2002 and 2003 the total value of expenditure on hotel furnishing and refurbishment is estimated to have been around L.E. 1.2 Billion of which L.E. 612 million was allocated to furnishing newly established rooms and L.E. 598 million was spent on refurbishment of existing rooms. International Industry for Furniture

World furniture production is estimated to be worth around US$180 billion a year. Around 60% of world’s furniture production takes place in just seven industrialized countries: the US, Germany, Italy, France, the UK, Japan and Canada. The European Union produces an estimated $65 billion a year, while the United States is the biggest single producer with around $45 billion output. Italy, Germany and Japan are trailing with amounts almost equal to $17-18 billion. France, the UK and Canada all record output levels between $5-7 billion.

Furniture production in emerging countries currently amounts to only 21% of the world total value. However, there are three countries (China, Mexico and Poland) where production is increasing rapidly thanks to recent investments in new plants especially designed and built for exports.

152

6.3. Local Consumption of Furniture and Wood Works – Ministry of Planning The following table presents statistics on wooden furniture production and consumption patterns in Egypt over the period 2000-2002. The table also illustrates production and consumption as forecasted by the Egyptian Ministry of Planning during 2002-2003 and 2003-2004.

Table 64: Egyptian Consumption of Wood Furniture & Woodworks Category 2000 - 2001 2001 - 2002 * 2002 - 2003 * 2003 - 2004

Production Local Production 2330 2610.3 2756.3 2911.9 Imports 41.9 41.7 39.7 29.1 Total Resources 2371.9 2652 2796 2941

Consumption Household 1550 1756 1851 1947 Government 30 35.1 36.2 38.1 Intermediaries 236.7 270 284.6 299.4 Exports 48.2 13.4 15 20 Investment 260 297.1 313.3 329.5 Inventory (Beginning of Period) 247 280 296 307 Total 2371.9 2651.6 2796.1 2941

* Provisional Statistics Source: Ministry of Planning An examination of the statistics reveals that during fiscal years 2000-2001 and 2001-2002, local production of wood furniture and wood works represented 98% of total resources. It is anticipated that during 2002-2003 and 2003-2004 the same trend will prevail with imports representing less than 2%. Household and Intermediary Consumption Furthermore, Household consumption represents the largest market segment totaling L.E. 1550 million in 2000-2001 and L.E. 1756 million in 2001-2002. Household expenditure on wood furniture and woodworks is expected to rise even further in 2002-2003 and 2003-2004 to reach L.E. 1851 million and L.E. 1947 million respectively. The second largest market segment is Intermediate Agents amounting to L.E. 236.7 million in 2000-2001 and L.E. 270 million in 2001-2002. It is forecasted that the value devoted to intermediaries will rise to L.E. 313.3 million and L.E. 329.5 million in 2002-2003 and 2003-2004 respectively.

Graph 72:

1550

30

237

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260 247

1756

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Egyptian Consumption of Wood Furniture & Woodworks

Household Government

Intermediaries Exports

Investment Inventory (Beginning of Period)

Exports and Government Consumption Exports fell from L.E. 48.2 million in 2000-2001 to L.E.13.4 million in 2001-2002. Forecasts indicate that this value will rise to reach L.E. 15 million and L.E. 20 million in 2002-2003 and 2003-2004 respectively. Government expenditure has risen from L.E. 30 million in 2000-2001 to L.E. 35.1 million in 2001-2002. Forecasts of the Egyptian Ministry of Planning indicate that government consumption will rise even further to reach L.E. 36.2 million and L.E. 38.1 million in 2002-2003 and 2003-2004.

153

6.4 Tourism Capacity and Consumption of Woodworks & Furniture 6.4.1 Capacity of the Egyptian Tourism Sector - CAPMAS The following table presents data obtained from CAPMAS on the total numbers of hotels and hotel rooms in Egypt during the period 1998 -2001 classified according to hotel rating. An examination of the figures reveals that the general trend has been an increase in the number of hotels and rooms over the designated period. It is worth noting however that there are differences among the various hotel ratings with some hotel categories expanding more than others. Furthermore, increases in the number of hotels do not necessarily indicate an increase in the capacity of the tourism sector as these increases are sometimes accompanied by decreases in the total number of rooms.

Table 65: Total Number of Hotels and Resorts 1998-1999 1999-2000 2000-2001

Category Hotels Rooms Hotels Rooms No. of Hotels

No. of Rooms

5 Stars 138 24,147 146 26,832 175 36,405 4 Stars 116 16,052 115 17,571 141 39,359 3 Stars 164 14,576 165 14,056 210 15,409 2 Stars 127 6,068 134 6,737 113 12,392 1 Star 87 2,852 89 2,893 90 2,782

Unclassified 768 19,841 766 18,673 638 14,630 The number of 5 stars hotels has increased from 138 in 1998-1999 to 146 and 175 in 1999-2000 and 2000-2001 respectively. The number of rooms has also increased from 24,147 in 1998-1999 to 26,832 in 1999-2000 and 36,405 in 2000-2001. The number of 4 star hotels has also increased over the designated period with the exception of 1999-2000 when it fell to 115 from the total of 116 of the previous year. This was followed by an increase in 2000-2001 to 141. The number of rooms however grew steadily from 16,052 in 1998-1999 to 17,571 in 1999-2000 and 39,359 in 2000-2001. The number of three star hotels on the other hand increased steadily throughout the period from 164 hotels in 1998-1999 to 165 hotels in 1999-2000, and 210 in 2000-2001. The number of rooms however did not follow the same pattern, decreasing from 14,576 rooms in 1998-1999 to 14,056 in 1999-2000. This was followed by an increase to 15,409 rooms in 2000-2001. The number of 2 star hotels increased from 127 hotels in 1998-1999 to 134 hotels in 1999-2000. This was followed by a decline in the number to reach 113 hotels in 2000-2001. The number of hotel rooms grew steadily from 6,068 in 1998-1999 to reach 12,392 in 2000-2001.

Graph 74:

05,000

10,00015,00020,00025,00030,00035,00040,000

No. o

f Roo

ms

1998-1999 1999-2000 2000-2001

Number of Rooms

5 Stars 4 Stars 3 Stars 2 Stars

154

155

6.4.2 Capacity of the Egyptian Tourism Sector – Egyptian Hotels Association/ Ministry of Tourism The following table includes statistics obtained from the Ministry of Tourism covering the total number of hotels and hotel rooms in Egypt during 2001 and 2003.

Table 66: Capacity of the Egyptian Tourism Sector

Year 2001 Year 2003 Rating Units Rooms Units Rooms

Hotels and Resorts 5 Stars 73 28,944 94 34,613 4 Stars 91 18,915 121 27,478 3 Stars 173 17,458 183 18,248 2 Stars 151 7,953 168 9,326 1 Star 102 3,852 103 3,718

Unclassified 208 29,463 117 15,699 Floating Hotels

5 Stars 145 9,172 156 9,762 4 Stars 54 2,565 60 2,829 3 Stars 25 866 24 981 2 Stars 9 209 11 288

Unclassified 26 1,323 14 656 According to the Egyptian Hotels Association the total number of five stars establishments was 218 in 2001 of which 145 were classified as floating hotels and 73 were classified as hotels and resorts. In 2003 the total number rose up to 250 (94 hotels and resorts, 156 floating hotels). While the number of hotel and resort rooms increased from 28,944 in 2001 to 34,613 in 2003; the number of floating hotel rooms increased only from 9,172 to 9,762. The capacity of four stars hotels increased from 91 hotels and resorts; 18,915 rooms in 2001 to reach 121 hotels and resorts; 27,478 rooms in 2003. The number of four stars floating hotels also increased from 54 establishments; 2,565 rooms in 2001 to 60 establishments; 2,829 rooms in 2003. The number of three stars hotels and resorts also increased from 173 hotels; 17,458 rooms in 2001 to 183 hotels; 18,248 rooms in 2003. The number of three stars floating hotels on the other hand decreased from 25 in 2001 to 24 hotels in 2003. The number of rooms however, increased from 866 to 981 between 2001 and 2003. It is worth noting that according to the Egyptian Ministry of Planning, the total number of hotel rooms is forecasted to increase by 5000 rooms during the fiscal year 2003-2004. Furthermore, it is expected that by the year 2006-2007 the total number of rooms will reach 150,000.

6.4.3 Discrepancies between Statistics Obtained from CAPMAS and the Ministry of Tourism on the Number of Hotels and Rooms A comparison between the data obtained from the CAPMAS on the number of Hotels and Resorts with those obtained from the Ministry of Tourism reveal great differences with CAPMAS presenting higher figures. For example, the total number of 5 stars hotels according to CAPMAS totaled 175 establishments in 2001. According to the Ministry of Tourism on the other hand the total number for the same category was 73. The same trend can be depicted with regards to the total number of 4 stars and 3 stars hotels for which CAPMAS declared a total of 141 and 210 hotels while the Ministry of Tourism declared totals of 91 4 stars hotels and 173 three stars hotels. As for 2 Star hotels, the number of hotels provided by CAPMAS is less than that obtained from the Ministry of Tourism by 38 establishments. The number of rooms provided by CAPMAS on the other hand, is higher than that provided by the Ministry of Tourism by 4,439 rooms. Table 67: Discrepancies between Statistics Obtained from CAPMAS and the Ministry

of Tourism on the Number of Hotels and Rooms

CAPMAS Ministry of

Tourism Discrepancy Hotel

Rating No. of Hotels

No. of Rooms

No. of Hotels

No. of Rooms

No. of Hotels

No. of Rooms

5 Stars 175 36,405 73 28,944 102 7,461 4 Stars 141 39,359 91 18,915 50 20,444 3 Stars 210 15,409 173 17,458 37 -2,049 2 Stars 113 12,392 151 7,953 -38 4,439 1 Star 90 2,782 102 3,852 -12 -1,070

Unclassified 638 14,630 208 29,463 430 -14,833

Graph 75:

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156

157

6.4.4 Tourism Sector's Expenditure of Furniture and Woodworks Given that hotels and resort's fall directly within the responsibility of the Ministry of Tourism, the following table relies on the statistics obtained from the Ministry (as opposed to the statistics provided by CAPMAS) in estimating the sector's expenditure on furniture and woodworks. Furthermore, figures covering the costs per room and percentage of rooms refurbished on a yearly basis have been derived from interviews with individuals working in the tourism sector. It is worth noting however that these figures provide indicative trends since the actual hotel consumption of wooden furniture as well as other materials varies greatly from one hotel to another; making it very difficult to calculate accurate figures for the sector. Taking the factors mentioned above into consideration, it would appear that during the year 2002 and 2003 the total value of expenditure on hotel furnishing and refurbishment was around L.E. 1.2 Billion of which L.E. 612 million was allocated to furnishing newly established rooms and L.E. 598 million was spent on refurbishment of existing rooms.

Table 68: Hotels, Resorts and Floating Hotels (Year 2001- 2003 )

Hotel Rating

Number of Rooms

(2001)

Number of Rooms

(2003)

Change in

Number of Rooms

Cost per room

Total Cost (new

rooms)

Refurbishment (% of Hotel Capacity)

Hotels & Resorts 5 Stars 28,944 34,613 5,669 50,000 283,450,000 289,440,000 4 Stars 18,915 27,478 8,563 30,000 256,890,000 85,117,500 3 Stars 17,458 18,248 790 25,000 19,750,000 43,645,000 2 Stars 7,953 9,326 1,373 15,000 20,595,000 11,929,500 1 Star 3,852 3,718 -134 8,000 21,571,200

Unclassified 29,463 15,699 -13,764 3,000 61,872,300

Total Hotels and Resort's expenditure on Wooden Furniture 580,685,000 513,575,500 Floating Hotels

5 Stars 9,172 9,762 590 40,000 23,600,000 73,376,000 4 Stars 2,565 2,829 264 20,000 5,280,000 7,695,000 3 Stars 866 981 115 15,000 1,725,000 1,299,000 2 Stars 209 288 79 8,000 632,000 167,200

Unclassified 1,323 656 -667 2,000 1,323,000

Total Floating Hotels' expenditure on Wooden Furniture 31,237,000 83,860,200

Grand Total 1,209,357,700

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6.5 General Overview of the International Furniture market

The following section presents information on the international market for furniture and woodworks with a special focus on the key import markets and their openness towards less developed countries.

6.5.1 World Production – General Trends

• World Furniture Production World furniture production is estimated to be worth around US$180 billion a year. Around 60% of the world’s furniture production takes place in just seven industrialized countries: the US, Germany, Italy, France, the UK, Japan and Canada. The European Union produces an estimated $65 billion a year, while the United States is the biggest single producer with around $45 billion output. Italy, Germany and Japan are trailing with almost equal $17-18 billion production. France, the UK and Canada all record output levels between $5-7 billion.

Furniture production in emerging countries currently amounts to only 21% of the value of world output. However, there are three countries (China, Mexico and Poland) where production is increasing rapidly due to recent investments in new plants especially designed and built for exports.

The leading importers of furniture are the United States, Germany, France, the United Kingdom, Japan and Canada. The major exporters are Italy, Canada, Germany, China, the United States, Poland and France.

During the 1995-2000 period there was a significant increase in the imports of the United States, and small increases in several European countries, Canada and Japan. The US has been the engine of international furniture trade in the last ten years. In spite of the recent slow down in the US market, demand for imported furniture by the American consumer has grown for reasons that remain largely valid at present: primarily the evolution of taste in the direction of modern European design, but also a special ability of foreign suppliers to provide products well suited to the changing fashion, at highly competitive prices.

Italy remains the leading exporter, but the value of Italian furniture exports remained virtually constant in current dollars, while exports from Canada and from five emerging countries (China, Poland, Malaysia, Indonesia and Mexico) increased substantially. The major structural phenomenon of the past five years was the increased degree of openness of the markets (measured as the ratio between imports and consumption). This increase was particularly important in the United States.

• Forest Products Market Developments North American sawn softwood markets were marked by the expiration of the United States – Canada Softwood Lumber Agreement in March 2001. The agreement, which had been in existence since 1996, regulated Canada’s exports to the United States and influenced prices. North American sawn softwood prices were near record lows in 2000, but they rebounded in early 2001 as the end of the agreement came closer. In the summer of 2001, Canadian exports, which are roughly one third of the United States consumption, have slowed as United States industry groups have initiated action to control the Canadian imports once again.

159

United States housing remains strong with 1.6 million houses built in 2000, of which over 90% are wood-framed, and the same levels are reported in 2001 and 2002, despite the slowdown in the North American economies and the recession in the United States manufacturing sector in 2001. Sawn hardwood consumption in 2000 and 2001 rose again throughout the UNECE region, to record levels in the United States and Europe, as demand for hardwood furniture, millwork and mouldings came from new housing construction and remodeling and repair. United States sawn hardwood consumption, for furniture, cabinets and flooring, rose over 2% to reach 33 million m3, while the EU/EFTA sub-region rose by almost 8% to reach 15 million m3. Consumption in “Other Europe” rose less, by 3% to 4 million m3. Demand softened in the United States. Lower demand at the end of 2000 and early 2001, coupled with the increased production from withdrawn losses, resulted in falling sawn hardwood prices. China and other Asian countries have increased imports of sawn hardwood from the UNECE region, although some of that wood is returned in the form of value-added products such as furniture. The panel market is divided into structural panels, e.g. non-structural board – OSB and softwood plywood, and non-structural panels, e.g. MDF and particle board. These two sectors exhibited divergent trends in the sub-regions of UNECE. MDF drew all panel markets up again in 2000, but a slowdown in capacity expansion is forecast in Europe in 2001 for the first time, and North America. MDF has found increasing acceptance in new uses, in addition to the preference it has earned in furniture manufacturing. The other main non-structural board, particle board, is truly a European product as production in 2000 rose by over 4% to a record 29 million m3, in comparison to stable production in North America at 13 million m3 (all statistics without OSB). Trade of particleboard in Europe was active in 2000, especially in the CEECs, but subdued in North America. With the strong dollar the United States imported more furniture, cabinets and other secondary processed wood products, which was reflected in domestic furniture plant closings, and a weakened demand for nonstructural panels. Structural panels showed opposite trends. OSB production in North America and Europe rose to new records by 2.3% to reach 18 million m3 in 2000 and by 54% to reach 1.4 million m3 in 2001. OSB continued substituting for softwood plywood for construction in North America, recording a 75% market share in sheathing. Meanwhile in Europe, the utilization for residential construction is less, although it is starting to become popular in some countries with the advent of wood-framed housing techniques. The increased production of OSB (and MDF) in 2000 led to a price collapse in North America. Production of engineered wood products increased in 2000, especially for glulam beams, which increased worldwide by 19% over 1999, to a record 3.1 million m3. For UNECE region producers the main export market is Japan, where approximately 55% of the market is imported, primarily from Europe, but also from North America and the Russian Federation, sometimes as glulam stock, i.e. sawnwood for manufacturing glulam. Although wooden I-beams have gained a 33% market share of the North American new residential construction flooring, production fell by 3% in 2000, mainly because lower-priced sawnwood joists (beams) were substituted. As approximately 60% of North American LVL (laminated veneer lumber) production is used as flanges in the I-beams, production of LVL fell by 6% to 1.4 million m3.

160

In 2000 the tropical timber market continued to recover from the steep downturn of the 1997 and 1998 Asian crises. China is having greater influence on the tropical timber trade, currently importing the most roundwood, and later possibly the most primary processed products. The UNECE region increased its imports of tropical sawnwood in 2000. The tropical timber trade is orienting itself away from primary products and towards secondary processed wood products.

World trade of secondary processed wood products is expanding faster than trade of primary products, with five countries accounting for 60% of the imports: United States, Germany, France, United Kingdom and Japan. The initial effects of the shift of manufacturing of value added wood products to low-cost labor regions are beginning to be seen in North America, as evidenced by furniture plant closures in 2001, as furniture imports increased.

Until now, markets for certified forest products (CFPs) have been constrained by supply, as well as final consumer demand. However in the last year, the area of forests certified for sustainable forest management doubled to 80 million hectares. Trade grew steeply too, especially in some environmentally-sensitive markets in the UNECE region. Demand continues to be driven by retailers and business-to-business markets, where advantages other than price premiums are currently important. Forest certification and certification of forest products is highly controversial, with strong opinions; however, positions are changing, and mutual recognition is established between some, but not all, schemes.

6.5.2 World Imports

In terms of world imports, wooden furniture was traded worth $28.1 billion in 2000, up 28% since 1996. The world’s leading industrialized economies (30 OECD countries) registered imports of $25.5 billion in 2000, accounting for 91% of all wooden furniture imports that year. a) Major Import Markets for Wooden Furniture The following table illustrates the imports of some of the major markets for wooden furniture over the period 1997-2002.

Table 69: Imports of Wooden Furniture – Selected Markets Country 1997 1998 1999 2000 2001 2002 United States 12,851 13,255 16,015 15,453 14,963 15,725 EU 12,052 12,468 12,846 13,060 12,006 12,332 Japan 15,116 9,184 10,814 11,271 9,853 9,235 China/Hong Kong 3,321 1,956 2,914 3,708 3,460 4,135 Canada 1,734 1,715 1,896 2,114 1,945 2,150 South Korea 2,376 912 1,404 1,568 1,571 1,826 Mexico 438 525 619 826 833 950 Taiwan 1,783 1,205 1,157 1,164 837 904 Norway 821 852 762 760 758 806 Switzerland 804 881 867 791 758 799

Source: International Tropical Timber Council The United States is the world’s leading importer of wood products, importing $15.7 billion in 2002. Between 1997 and 2002, U.S. imports increased nearly $3 billion. The United States’ strong housing and remodeling market, coupled with the rising value of the dollar during this period, helped stimulate import demand. Imports from Canada, mostly in the form of softwood lumber, accounted for two-thirds of total U.S. wood imports. The European Union with 15 member countries represents the largest OECD trading block for imports of wooden furniture, accounting for $11.2 billion in 2000 and $12.3 billion in 2002.

Japan is the third-largest wood product importer, with imports valued at $9.2 billion in 2002. In 1998, Japan fell from the top position after imports decreased to $6 billion. Japan’s economy had been plagued with bad loans, deflation, rising government debt and decreased housing starts. Graph 79:

0

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Imports of Wooden Furniture - Key Import Markets

United States EU Japan

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b) World's leading softwood log importers

Japan is the world’s leading softwood log importer. Between 1997 and 2002, Japan’s softwood log imports decreased sharply from $2.4 billion to $1.2 billion. Although U.S. softwood log exports to Japan decreased over $900 million between 1997 and 2002, the United States remained its top supplier. The EU is the second-largest softwood log importer, with imports of $780 million in 2002. China’s imports of softwood logs skyrocketed from $50 million in 1997 to $1 billion in 2002, making it the third-largest softwood log importer. Softwood logs from Russia accounted for over 85 percent of China’s imports in 2002. As China’s domestic log supply decreased, its construction, furniture, and pulp and paper industries turned to imports to meet demand.

Table 70: Imports of Softwood – Selected Markets Country 1997 1998 1999 2000 2001 2002 Japan 2,400 1,567 1,681 1,714 1,477 1,232 EU 566 638 873 834 776 800 China/Hong Kong 66 95 272 379 542 1,004 South Korea 653 257 370 414 423 500 Canada 216 220 207 213 216 194 United States 56 74 113 174 152 172 Norway 122 134 114 111 92 88 Turkey 52 55 53 62 35 34 Taiwan 29 20 19 13 17 15 Poland 6 6 12 13 14 14

c) World's leading hardwood log importers China is the top importer of hardwood logs, importing $1.3 billion in 2002. Beginning in 1999, China’s imports increased rapidly as a result of reduced tariffs, a logging ban, and a growing furniture industry. With imports of $1.2 billion in 2002, the EU is the second-largest hardwood log importer. Japan’s hardwood log imports, which topped $1.3 billion in 1997, were valued at $550 million the following year and have since slid to $370 million in 2002.

Table 71: Imports of Hardwood – Selected Markets Country 1997 1998 1999 2000 2001 2002 EU 1,314 1,547 1,390 1,325 1,211 1,150 China/Hong Kong 834 743 1,189 1,471 1,285 1,222 Japan 1,332 554 645 617 400 367 India 448 428 418 460 486 500 Taiwan 290 150 179 171 118 122 South Korea 220 92 150 146 113 97 Canada 125 141 150 176 175 179 Thailand 51 51 94 125 95 88 Malaysia 36 20 49 62 67 70 Philippines 67 42 47 41 33 29

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d) World's leading softwood lumber importers In 2002, the United States imported $6.1 billion of softwood lumber, with Canada supplying 84 percent. Increased competition in the U.S market from New Zealand, Germany, Chile and Brazil cut into Canada’s market share, which was as high as 94 percent in 1997. Strong U.S. housing starts, 1.7 million in 2002, combined with subsidized imports contributed to this high level of imports. Japan’s softwood lumber imports decreased from $3.6 billion in 1997 to $2 billion in 2002. Although softwood lumber imports from the United States decreased significantly during this period, the United States was still the top supplier in 2002. Since 1997, EU imports of softwood lumber have fluctuated between $1.7 billion and $2.1 billion, with imports decreasing from North America and increasing from Russia and the Former Soviet Union.

Table 72: Imports of Softwood Lumber– Selected Markets Country 1997 1998 1999 2000 2001 2002 United States 7,004 6,332 7,374 6,568 6,386 6,157 Japan 3,631 1,890 2,410 2,595 2,159 1,976 EU 2,014 1,854 2,007 2,071 1,699 1,900 China/Hong Kong 85 79 84 101 116 196 Norway 234 222 189 191 176 189 Australia 215 183 193 247 131 181 Mexico 50 61 76 122 143 181 Canada 162 127 151 160 109 108 Taiwan 146 107 90 97 73 89 Switzerland 98 102 99 90 84 81

e) World's leading hardwood lumber importers Between 1997 and 2002, EU imports of hardwood lumber decreased from $2.5 billion to $2.3 billion. During this period, imports from the United States and Malaysia decreased $450 million and $250 million, respectively, while imports from Cameroon increased $250 million. China’s imports of hardwood lumber increased from $530 million in 1997 to $1.4 billion in 2002. In 1999, China imported $300 million of hardwood lumber from the EU, most of which was beech. By 2002, China’s demand for beech decreased and imports from the EU fell to $120 million. In 2002, China’s hardwood lumber imports from Indonesia, the United States and Malaysia were valued at $340 million, $260 million and $160 million, respectively.

Table 73: Imports of Hardwood Lumber – Selected Markets Country 1997 1998 1999 2000 2001 2002 EU 2,484 2,569 2,567 2,687 2,418 2,350 China/Hong Kong 525 646 1,059 1,364 1,280 1,401 United States 357 399 441 493 462 468 Japan 970 496 594 642 530 461 Canada 333 308 352 402 345 366 Thailand 148 151 184 215 224 266 South Korea 284 117 193 176 169 170 Mexico 102 126 128 153 136 145 Taiwan 298 213 199 204 129 137 Philippines 79 48 70 54 55 65

6.5.3 OECD Imports of Wooden Furniture from DMEC Countries Wooden furniture accounts for over 60% of the Organization for Economic Cooperation and Development – OECD imports of furniture and bedding of all materials. The developing country exporters have secured a growing presence in the OECD trade on wooden furniture. Around $25.5 billion worth of wooden furniture items were imported in 2000, of which $9.6 billion (38%) originated from Developing Market Economies and China – DMEC. It is three times the DMEC market penetration of 1992 when their share was 19.5% for a total market of $3.2 billion.

Table 74: World Imports of Wooden Furniture

1996 2000 Wooden furniture: World OECD World OECD

- $ million - SITC 821.13/16/50/79 21,940 19,708 28,074 25,481

Increase - - 28% 29% It is apparent that the global trade in wooden furniture has become more open to developing countries, which have been able to expand their market shares at the expense of industrialized countries. There are, however, regional differences on the openness of trade. USA has clearly become more receptive for developing market economies and China – DMEC furniture, whereas Europe continues to trade a larger proportion of its furniture intra-regionally, and imports from DMECs remain a smaller component of total furniture business. Graph 80:

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a) Major OECD Import Markets The following table presents the values of wooden furniture imported by the main OECD import markets from developing countries.

Table 75: Value of OECD Imports from DMEC Area in 2000 (US$ Billion)

Country Value US 5.3

Japan 1.26 EU 2.37

Australia 0.25 Canada 0.22

Total 9.4 The United States represented the largest share (55%) of the total wooden furniture imports from DMEC in 2000 ($5.3 billion). The US market for wooden furniture from the DMECs has doubled since 1996, which indicates its openness to source furniture from all over the world, and integrate with competitive supply chains from the developing world. Japan is the second most important buyer of wooden furniture from the DMEC. In 2000 Japan represented 13% ($1.26 billion) of OECD imports. DMECs accounted for almost 80% of all Japanese imports of wooden furniture in 2000, because the country has close trading ties with all the major Southeast Asian sources. China was the main supplier, with Indonesia strong for rattan and bamboo ranges. Japan’s imports have, however, failed to grow because of the stagnating economy. In 2000, $2.37 billion of the European Union's total imports came from the DMEC region. Their lower share (25%) of the EU import markets indicates that the region is not as easily approached as the US, especially when considering the effect of retail and merchandising differences found within the 15 countries, with few international chains or groups available beyond Ikea. The major import sources are found intra-regionally and Italy provided the largest shares. Central and Eastern European countries were among key suppliers, but these are gradually overtaken by DMEC, especially those countries based in Asia. In 2000, the United Kingdom ($670 million), France ($395 million) and Germany ($359 million) imported the largest amounts from the DMEC countries. The second tier of EU importers include the Netherlands ($273 million), Belgium, Italy and Spain, the three importing for more than $ 100 million of wooden furniture from the DMECs. Canada & Australia: Outside Europe, there remain two important larger markets. Australia ($247 million) and Canada ($220 million) have both more than doubled their imports from the developing market economies and China.

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b) Major Suppliers from the Developing Market Economies China alone supplied one third of the DMEC deliveries of wooden furniture into OECD markets in 2000. China had conquered a 15%-units higher a share of the market in just four years, by more than tripling its deliveries to US$ 3.22 billion. Much of this expansion has been powered by the growing number of joint ventures on furniture manufacturing with foreign partners. China has benefited from the opening up of investment and the transfer of technology first from Taiwan (province of China), Singapore, and more recently from the US and Europe. The other four leading suppliers were from Southeast Asia, namely Indonesia ($1.5 billion), Malaysia ($1.1 billion), Thailand ($725 million) and Taiwan (Province of China, $667 million). Indonesia still enjoys abundant availability of low-cost timber and highly skilled carving labor, while the other three countries are increasingly investing in China mainland and Vietnam to exploit the competitive advantages offered there. Free export trade zones, abundant but skilled labor and lower initial investment costs have encouraged this move in spite of the tightening wood resources in the two countries. Wood imports and use of wood-based panels have secured much of the expansion as solid wood has become scarce. In Latin America, Brazil and Chile have increased their presence in exports of wooden furniture with great success. Eastern European suppliers have become stronger players particularly in the European Union markets. All the above-mentioned countries have entered the low-medium mass markets with large volumes. Their competitive position has been based on comparative advantages derived from lower raw material and labour costs, with external support provided by favourable currency rates and lowering of tariffs in major markets. Now these driving forces are changing in favour of even lower-cost producers (China, Vietnam), and the big ITTO supplier countries will have to focus on moving to the upper market segments with better designs and quality assurance of all product attributes, including the sustainability of wood (certification). Many Asian countries are now working on strategies that allow them to target specific sectors of the US markets and price points in style and design to overcome the strength of the China “catch-all” manufacturing base. The strengthening of market-led manufacturing according to more original designs is likely to help Asian suppliers penetrate also the EU markets, whilst providing a strong learning curve on how to reach and meet selective consumer tastes in different countries.

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Table 76: OECD Imports of Wooden Furniture by Destination

Destination 1996 1997 1998 1999 2000 Index 2000

1996=100 OECD (a) 19,708.06 19,818.50 21,507.06 23,728.75 25,481.02 129 (b) 5,362.21 5,915.15 6,376.60 7,955.56 9,640.30 180 EU (15) – (a) 10,776.56 10,264.57 11,137.78 11,627.93 11,192.98 104 (b) 1,365.52 1,570.93 1,722.99 2,050.10 2,365.85 173 USA (a) 4,549.76 5,264.80 6,325.68 7,804.64 9,469.18 208 (b) 2,514.44 2,854.03 3,415.14 4,384.51 5,321.61 212 GERMANY (a) 3,619.11 3,183.39 3,357.25 3,171.10 2,788.58 77 (b) 332.23 306.20 310.25 336.94 359.26 108 FRANCE (a) 1,807.19 1,667.64 1,798.26 1,898.02 1,901.73 105 (b) 231.07 269.10 264.00 318.79 394.70 171 UNITED KINGDOM (a) 1,031.47 1,209.82 1,407.56 1,568.45 1,790.58 174 (b) 309.43 376.75 432.11 554.10 670.45 217 JAPAN (a) 1,588.60 1,477.09 1,145.23 1,263.37 1,580.38 99 (b) 1,089.74 1,025.53 810.75 976.14 1,261.80 116 BELGIUM-LUX. (a) 1,007.85 953.29 1,029.45 1,087.86 991.52 98 (b) 63.83 98.12 126.03 154.26 153.69 241 NETHERLANDS (a) 1,002.48 922.64 941.94 1,055.38 1,004.52 100 (b) 169.35 213.00 235.77 250.29 273.30 161 SWITZ.-LIECHT. (a) 1,086.86 910.75 983.81 1,012.08 933.22 86 (b) 15.74 17.64 19.14 21.82 23.00 146 CANADA (a) 462.69 558.63 579.24 601.27 709.21 153 (b) 92.93 124.36 142.45 170.49 219.61 236 AUSTRIA (a) 918.47 787.43 776.07 795.56 674.62 73 (b) 28.92 25.37 22.97 22.63 26.84 93 NORWAY (a) 423.09 447.83 498.43 473.86 466.04 110 (b) 19.12 23.97 30.47 31.83 31.37 164 SWEDEN (a) 339.47 357.18 390.99 427.81 416.84 123 39.35 46.99 47.08 53.55 66.18 168 AUSTRALIA (a) 184.43 221.53 230.22 281.47 344.51 187 (b) 115.12 146.83 144.96 191.82 247.43 215 ITALY (a) 246.61 235.87 271.75 340.45 343.61 139 (b) 53.99 58.91 74.43 106.18 118.52 220 SPAIN (a) 195.13 222.59 267.65 334.69 338.33 173 (b) 43.66 56.07 70.68 104.98 123.58 283 DENMARK (a) 217.34 268.38 355.81 353.51 326.57 150 (b) 51.81 64.86 78.61 75.54 75.37 145 IRELAND (a) 93.24 122.77 147.04 170.99 191.02 205 (b) 14.11 21.80 25.98 33.44 53.49 379 MEXICO (a) 58.62 77.74 98.00 108.25 183.72 313 (b) 4.02 8.45 13.01 17.70 32.92 819

Source: ITC/UNSO Comtrade Database*

SITC 821.13, 821.16, 821.50, 821.79

Notes: a) Total imports b) Imports from DMEs and China

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Table 77: OECD Imports of Wooden Furniture by Country of Origin

Origin 1996 1997 1998 1999 2000 % share

Index 2000

1996 2000 1996=100DMECs 5,362.22 5,915.15 6,376.60 7,955.56 9,640.30 100.0 100.0 180

of which: NIEs 878.70 833.15 790.59 879.32 885.55 16.4 9.2 101

of which: TAIWAN (POC) 677.51 640.33 619.79 681.30 667.23 12.6 6.9 98 HONG KONG 67.77 75.15 85.50 109.82 128.17 1.3 1.3 189 KOREA REP. 58.64 51.25 45.14 49.15 51.76 1.1 0.5 88 SINGAPORE 74.78 66.42 40.16 39.05 38.39 1.4 0.4 51 Other DMECs 4,483.52 5,082.00 5,586.01 7,076.24 8,754.75 83.6 90.8 195

of which: CHINA 987.41 1,220.15 1,552.30 2,214.94 3,222.91 18.4 33.4 326 INDONESIA 943.44 1,048.82 1,158.51 1,389.27 1,507.96 17.6 15.6 160 MALAYSIA 682.97 734.89 723.49 913.69 1,064.56 12.7 11.0 156 THAILAND 511.79 486.93 461.33 603.46 725.12 9.5 7.5 142 MEXICO 342.34 434.33 510.25 568.29 628.30 6.4 6.5 184 PHILIPPINES 215.26 244.59 264.95 308.92 347.73 4.0 3.6 162 BRAZIL 263.97 278.73 234.49 273.42 346.76 4.9 3.6 131 VIET NAM 96.37 149.40 149.02 208.74 305.26 1.8 3.2 317 SLOVENIA 167.08 165.66 165.48 177.07 163.92 3.1 1.7 98 INDIA 35.96 54.97 77.89 93.38 113.72 0.7 1.2 316 CROATIA 71.31 64.61 59.35 60.37 59.96 1.3 0.6 84 EGYPT 22.50 26.17 31.12 33.75 35.10 0.4 0.4 156 HONDURAS 20.03 26.62 30.71 36.47 33.50 0.4 0.3 167 CHILE 22.27 27.45 28.10 29.22 30.00 0.4 0.3 135 TURKEY 10.09 11.20 15.71 30.03 28.63 0.2 0.3 284 YUGOSLAVIA 4.34 9.19 12.27 9.73 13.87 0.1 0.1 320 BOSNIA-HERZG. 6.70 9.37 8.00 9.61 13.49 0.1 0.1 201 ARGENTINA 6.13 7.36 7.68 9.47 12.54 0.1 0.1 205 COLOMBIA 3.08 5.13 6.01 6.70 11.68 0.1 0.1 379 MYANMAR 2.95 3.58 4.34 5.60 11.42 0.1 0.1 387 Others 67.53 72.85 85.01 94.11 78.32 1.3 0.8 116

Source: ITC/UNSO Comtrade Database*

c) OECD imports of Wooden Furniture from DMEC areas - Major Product

Categories Developing countries' exports to OECD increased from $5.4 billion in 1996 to $ 9.6 billion in 2000. Furniture n.e.s. (not elsewhere specified, SITC 821.50) is the main category of imported furniture from the developing countries. It accounted for 67% ($6.5 billion) of OECD’s total imports of wooden furniture from the DMEC area. Seats of wood (SITC 821.16) ranked second at 23% ($2.2 billion). Seats of cane, osier, bamboo, etc. (SITC 821.13) and furniture made of bamboo and similar materials (SITC 821.79) have equally lost ground to 4% and 6% of total imports, respectively. Graph 81:

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d) General Trends: • DMECs export more OECD countries’ imports of wooden furniture amounted to $25.5 billion in 2000, compared to $19.7 billion in 1996. Around 38% ($ 9.64 billion) were supplied by developing market economies and China. In 1996, their role was more modest at 27%. The positive growth rate was mainly a result of strong import growth in the major markets, particularly the United States and the United Kingdom. In addition some relatively minor importers like Canada, Australia, Spain, Ireland and Mexico have doubled or tripled their imports. On the other hand, imports have declined in a few countries such as Germany, Japan and Belgium-Luxembourg. Despite the ailing of major industrialized economies and faltering consumer confidence, imports have captured a larger share of consumption than in the past. In all the major markets, furniture imports from developing countries have grown faster than overall imports.

169

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Influx of products from China is the single most important reason behind this development. Behind China, a handful of other developing market economies dominate wooden furniture trade with the OECD, and hold a giant lead over some of their neighbours, who are just about to start developing their furniture industries. Best product opportunities have been identified in the EU markets in the following types of furniture: ethnic-design furniture, RTA (ready-to-assemble), home office, small/occasional, and furniture for children and the elderly. • Market drivers and factors of change The past decade has brought about significant changes in wooden furniture markets, for example in material compositions of furniture, competitive positions of producer countries and designs and finishes of furniture, as well as retail and promoting practices, networking and distribution patterns: 1. Growing outsourcing of semi-finished products and components from developing

countries. 2. Tightening environmental regulations and mounting pressure for certification and

labeling requirements on furniture (especially in the United States in the next 2 to 3 years).

3. Substitution pressure from new material combinations (wood, natural fibers and synthetics).

4. Higher potential supply of and demand for more diversified products of sustainable plantation woods.

5. Adoption of Internet in export promotion, growing business-to-business electronic commerce, and centralized electronic procurement of operating supplies.

6. Consolidation of the largest distribution channels into cross-continental mega-chains. 7. Gradual lowering of import tariffs, which is sometimes counterbalanced by higher non-

tariff barriers on trade. 8. Housing start-ups and consumer spending on interior refurbishment and replacements are

the traditional forecasting tools for furniture sales. Furniture is classified as non-essential item, so it is usually first eliminated from shopping lists in bad times. Its purchase is usually triggered by the growth in the building and housing sectors, but even more commonly, as a result of replacements and renovation.

6.5.4 The International Market for Wooden Furniture in Focus The following section presents in-depth information about the Major markets for wooden furniture with a special focus on the EU, North America and the Middle East. a) The European Market

• Furniture industry The EU furniture industry accounts for about half the world furniture production. It employs various raw materials to manufacture its products with a production value of 82Mio € in 2001. They range from wooden boards through leather and glass to metal. The EU furniture industry is export oriented, but the EU markets are more and more supplied by low production cost countries. Germany was the largest furniture producing EU country in 2001 with a production value accounting for 27% of the total EU furniture production. It was closely followed by Italy (26%) and by France (12%). The strengths of Europe’s wooden furniture industries are generally well known: steady raw material base, technological lead, quality and design, brands, distribution (proximity), clustering and networking. Weaknesses are in non-flexible labor, raw material costs and substitution pressures, which result in low profitability of the industry Graph 82:

Graph 83:

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Graph 84:

Graph 85: Materials used in furniture production

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Table 78: EU Production in the woodworking industry in million EUR, 1996-2000 Production (excl. VAT) 1996 1997 1998 1999 2000 2000 sawmilling 14.6 15.7 15.5 16.4 17.6 26.3 wood-based panels 10.5 11.5 12.0 11.9 12.9 19.3 wooden construction 17.4 18.4 19.5 20.7 21.8 32.6 packaging 3.8 4.3 4.5 4.7 5.2 7.8 "other wood products" 6.2 7.2 7.9 8.6 9.3 14.0 Total 52.7 57.3 59.7 62.67 66.9 100%

The general trend in the production of the EU woodworking industries has risen steadily from 52.7 million EUR in 1996 to 66.67 million EUR in 2000. This trend follows notably the one of housing starts and repairs. In recent years, the growth rates have been the most significant ones in packaging (pallets) that increased from 3.8 million EUR in 1996 to 5.2 million EUR in 2000, in certain panels (MDF and OSB) which increased from 10.5 million EUR in 1996 to reach 12.9 million EUR in 2000 as well as in the engineered wood products. The latter products represent the sector's high value added modern development. The woodworking sector is facing fierce competition with imports and material substitution.

• European construction developments Total construction According to Euroconstruct, the consortium of research institutions specializing in the construction sector in Europe, the value of construction in their European country grouping is forecast to exceed 850 billion euros in 2001 and 2002. The European Panel Federation (EPF) Annual Report 2000-2001 states that the overall construction sector output in 2000 was 875 billion euros, up 2.8% from 1999. Euroconstruct forecast increased construction in all of their countries in 2001, with the exception of Germany and Norway. “While Germany remains the single biggest market accounting for around 20% of the total, it is also expected to remain subdued throughout the forecasting period.” (Euroconstruct). The largest contributions to total volume growth are forecast to come from France, Spain, Italy and the United Kingdom. However, in terms of relative growth Euroconstruct’s four central and eastern European countries (CEECs), Czech Republic, Hungary, Poland and Slovakia, are expected to outpace their western European members. There are structural differences between the construction sectors in Western Europe and Euroconstruct’s four CEECs. Renovation and modernisation account for more than a third of western European construction output, while CEEC construction activity is overwhelmingly dominated by new non-residential construction and civil engineering. Residential construction in the EU Of greater interest to the wood products sector is the development of residential construction because of the greater use of wood. Residential construction, including new construction plus repair and remodeling, in Europe totaled over 400 billion euros, or 46% of total construction, in 2000.

According to EPF, in 2000 Germany had a 30% share of the residential construction market in western Europe, followed by France, 14%, Italy, 13%, United Kingdom, 10%, and Spain, 8%; these 5 countries accounted for 75% of the market. In Denmark, and presumably in France, Germany and Switzerland to some extent, the exceptionally high construction expenditures in 2000, especially repair and remodeling, are linked to the December 1999 windstorms. Overall damage to buildings in Denmark was estimated by Euroconstruct at 1% of GDP. As the repairs were done in 2000, there is negative growth in the construction sector forecast for 2001. In conclusion, residential construction is expected to fare well in the Czech Republic, Hungary, Poland and Slovakia, which could indicate a general trend in other CEECs; however, statistics were not available to document this assumption. Western European countries have vastly different outlooks for residential construction in the short term. The repair and remodeling segment should be a factor that buoys up stagnant construction in many European countries. Table 73:

Table 74:

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• Forest products market developments in the United Nations Economic Commission for Europe - UNECE region

Forest products markets escalated to new heights in 2000 in the UNECE region. Wood-based panels' consumption rose throughout the UNECE region, out distancing all other primary forest products sectors with over 5%, to a record 121 million m3. Consumption of sawnwood rose by 1.7% to an all-time high of 304 million m3, with stronger European consumption outweighing a slight downturn in North American sawn softwood consumption (hardwood consumption rose universally in the UNECE region). Commensurate with the developments above, roundwood consumption rose by 4.4% in 2000. Roundwood trade exploded in 2000 in the EU/EFTA sub-region, expanding by 50% as 2.6 million m3 more were exported than in 1999. Imports rose higher yet, by 6.8 million m3, a 19% increase over 1999, reaching 62.6 million m3, 8 to 10 times more than the other subregions. Much of these imports are intra- Europe. North American consumption of primary products fell overall by 1.0% in 2000, a drop of 7.6 million m3 in roundwood equivalent. However, this total masks gains to record levels in consumption of wood-based panels, sawn hardwood and secondary processed wood products. The slight drop in consumption hides the fact that North America had the highest average unit value prices in the region for exports of industrial roundwood, sawnwood (hardwood and softwood), particle board and OSB, and newsprint. Commensurate with a decline in sawn softwood production, sawlog consumption fell accordingly. For all primary forest products combined, the consumption in “Other Europe” rose by 10.4% to reach almost 76 million m3, while consumption in the EU/EFTA subregion rose less, by 3.8%, but on considerably higher volumes, achieving 492 million m3. It is important to note that many central and eastern European countries (CEECs) have moved out of the economic transition period and have re-established their forest products production and trade capacities, often with foreign investments. These improvements are finally evidenced in rising domestic consumption. Commonwealth of Independent States - CIS countries, reported the first gains in forest products consumption as a whole since the beginning of the transition process in 1991. In Russia the consumption of panels and paper and paper board both increased by approximately 19%. Consumption of sawnwood continued falling; however, exports of sawnwood rose 20%. In fact, in 2000, boosted by the devalued rouble, exports of most other products also increased: plywood by 7%, paper and paperboard by 17% and woodpulp by 21%. Roundwood production, of which20% was exported, rose by 11%. For all of Europe, sawn softwood markets registered record production in part due to the storm-downed volumes of sawlogs, and mostly due to a rise in consumption. However supply, increased by imports from CIS and other supply regions, outstripped demand in Europe and prices generally fell from 2000 into 2001. A growing portion of the European production is being exported to Japan, other Asian markets including China, and the United States owing to favourable exchange rates in 2000 and 2001. Despite increasing exports out of Europe, the EU/EFTA sub-region remains a net importer of sawnwood. When the rapidly expanding exports from "Other Europe" are added to those of the EU/EFTA sub-region, Europe as a whole is a net exporter, with about 75% being traded within Europe and 25% being exported out of Europe

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b) North America N

orth American Demand for Wooden Furniture

The United States Market The United States housing boom that began following the recession in the early 1990s, continued in 2000, and despite some pullback in 2001, the residential housing market remains healthy. Single family starts are the key to wood products demand because single-family units consume over twice as much lumber and panels as multifamily units. Single-family housing construction activity has remained very strong and well above 1 million units annually since 1995 as it now makes up over 80% of conventional housing demand (“conventional” excludes mobile homes and United States Department of Housing and Urban Development (HUD) Code homes). Furthermore, today’s houses are larger (20% larger than the 1980s) and they have more amenities (multiple garages, extra bathrooms, more bedrooms, etc.). In addition, the resale market has been setting records for the past three years with sales of existing homes (“resales”) averaging in excess of 5 million units per year. This is important because residential remodeling and repair markets consume almost as much lumber and panel products as new housing activity, and the resale market is the best single indicator of what is going on in the remodeling market. Furthermore, this market gives good insight into furniture and kitchen cabinet sales, which are other important users of wood products. Housing activity is important to the United States economy and it is critically important to the wood products industry. This is because 90% of the United States homes are wood-frame compared with 10% in Europe and about 50% in Japan. Housing activity (new housing plus remodeling) accounts directly for more than 5% of GDP. When indirect impacts are included residential construction contributes over 10% to GDP. According to the National Association of Homebuilders the construction of 1,000 single-family homes generates 2,500 full-time construction jobs, $80 million in wages and $43 million in combined federal, state and local revenues and fees. It is remarkable that in early 2001, housing has managed to avoid the sharp pullback being experienced by the rest of the United States economy. Some analysts believe that the United States would be in a recession in mid-2001 if not for the resilience in housing. For example, United States GDP in 2001 is expected to advance less than half the 5% growth in 2000. Some analysts feel weakness in the United States economy is due to a sharp pullback in business investment spending and the obvious recession in the manufacturing sector. Yet, housing, through May 2001 at least, has been relatively immune to the macroeconomic slowdown. The main reason is that consumer confidence has remained relatively strong thanks to a still healthy employment picture and continued income growth. And, aggressive rate reductions by the Federal Reserve Board have resulted in attractive interest and mortgage rates, by which housing has been a direct beneficiary. The Canadian Market The Canadian housing market has improved steadily since 1998 pretty much in tandem with the improving economy. This is not surprising because Canada, as a NAFTA partner with the United States, is heavily tied to the United States economy. In fact exports to the United States account for almost one third of Canada’s GDP, and when their southern neighbor has a strong economy, Canada benefits. Of course, the corollary also holds – Canada cannot avoid a weakening United States economy.

Canadian housing starts have improved steadily over the past several years, growing from 137,000 in 1998 to 152,000 in 2000, an 11% increase. Although Canada’s housing market is slowing down somewhat in 2001 (as is the economy as a whole), the pullback is expected to be minor if any at all. Canada’s economy isn’t expected to cool as much as its southern neighbour (because it did not grow as fast in the past four years and current strong energy demand is benefiting Canada), hence the expectation that housing should remain near last year’s total. For 2002, most analysts feel that Canadian starts should approach 160,000 units (as long as the United States avoids a recession). Graph 86:

Outsourcing to Developing Countries Growing outsourcing of semi-finished products and components by the United States furniture industry has been a key driver for the growth in DMEC trade. A great number of United States furniture manufacturers have transformed themselves into assembly plants, finishing lines or merely distributors and marketers of outsourced furniture and components from China and other countries, e.g. Brazil, Mexico and the Philippines. While sub-contracting the manufacturing processes to the lower-cost countries, United States firms still capture most of the value-adding potential in design, distribution and marketing functions, which they keep strictly under their control. The manufacturing process itself (particularly with standardized machinery) represents a lower value-added potential and is therefore easily sub-contracted anywhere in the world.

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North American Market for Office Furniture The United States The United States is in a business-led recession. GDP contracted at an annual rate of more than one percent in the second half of 2001. This was the poorest showing since 1991 when the US economy was last in a recession. Analysts expect continued negative growth in the first quarter of 2002. There is justified hope that the economy will turn around later this year. The Federal Reserve Bank lowered interest rates 11 times in 2001 and the rate is now standing at a 40-year low. It is possible that the Fed will continue with its easy monetary policy. Analysts at AKTRIN are confident that the positive effects of lower interest rates will make themselves felt soon. Furthermore, businesses have drastically written off bloated inventories of unsold goods thereby setting a good foundation for a recovery. The US office furniture market enjoyed a record year in 2000. It reached a consumption peak in the second quarter valued at US$43.5 billion (at annual rates, evaluated at retail prices including sales taxes and including recycled furniture). Following the peak quarter, business purchases of office furniture started to decline. The decline became increasingly steeper and came to a halt only in the third quarter last year when the market value reached US$36.0 billion (on an annualized basis). This is a drop of over 17% between the top and the low point. Growth of the office furniture market will be modest for the foreseeable future. In fact, due to the still strong market in the first half of last year, thereby lifting the 2001 average to $ 37.7 billion. Canada The Canadian economy slipped into recession during the second half of 2001, shrinking for the first time since 1992. Sagging export sales, above all to the US, represents the most serious drag on the Canadian economy. Canada's office vacancy rate is on the increase but still at a fairly low 6.5% at the present time. The variance between Canada's major urban centers is quite wide, ranging from a low of 2.0% in Ottawa to a high of 9.1% in Montreal. A low vacancy rate usually triggers new commercial construction which - with a certain time lag - triggers new office furniture acquisitions. On the other hand, a high vacancy rate allows businesses to quickly expand their office space if there should be a need. The Bank of Canada has repeatedly lowered its interest rate to the present level of 2.25%. It is to be hoped that this will help to keep the recession mild and short. The first fifteen months of this century were very good for the Canadian office furniture industry. Business purchases of office furniture (new and used) culminated at C$4600 million (on an annualized basis) in the first quarter of 2001. However, the good fortunes did not prevail. Office furniture sales dropped very steeply, down to a low point of only C$3988 million in the third quarter of last year. This represents a decline of 13.3% in only six months. Meanwhile, office furniture sales have rebounded a bit, but growth is painfully slow. Due to the still excellent performance during the first quarter of 2001, the annual average of C$ 4223 million represented a peak year.

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c) The Middle East Economic conditions vary enormously in the Middle East and the differences at a macroeconomic level are also present in the furniture industry. The per capita consumption of furniture varies from country to country as well as the degree of openness towards international trade in the furniture sector. Alongside countries that are net importers of furniture (Saudi Arabia, UAE, Kuwait), and where the sector is not very developed, there are other countries where the local production almost totally satisfies domestic demand (Turkey, Egypt and, to a certain extent, Israel). Distribution within the furniture sector is usually through independent outlets. Specialist chains are not very common. Only in Israel have some of the principal furniture manufacturers developed their own distribution networks. As an area the Middle East is an interesting one for the furniture sector. European furniture manufacturers are the leading exporters to the area since local consumers prefer high quality furniture and price is often not a decisive factor in the choice of articles. Furthermore, a middle class of consumers strongly oriented to consumption is emerging. In addition, with the development of tourism in the area there is increasing demand for goods to furnish the new tourist infrastructures.

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d) Japan Most of the solid or composite wood used in Japan is for the construction of residential housing. While this is similar to North America, the levels of home repairs and renovations in Japan are surprisingly low. As such, changes in the numbers and types of houses built in Japan have a direct and immediate impact on the demand for wood products. During the past three decades, the Japanese housing market has rivaled the United States market in terms of overall housing starts. This is in spite of the fact that the population of Japan is only 126 million people compared to almost 300 million in the United States. However, it is not just the sheer size of this market that makes it attractive. Japan, like Canada and the United States, has a tradition of wood housing. In addition, the Japanese people, unlike Europeans, have embraced many aspects of North American house design and construction over the past 50 year. Houses in Japan are replaced every 20-30 years, most frequently due to loss of structural integrity, decay or a desire to change styles. Traditionally, earthquakes have led to fires decimating many urban centers. In these coastal regions, houses were built as temporary structures and belongings were portable. When earthquakes occurred people packed up their belongings and waited out the fire in the surrounding and safe mountainsides. They later returned to build houses from wood and paper as only semi-permanent structures. In addition, current building practices in the humid Japanese climate, combined with a culture that does not promote house maintenance, often lead to decay and/or the loss of structural integrity after only a short time. Forecasts indicated that Japan's general economic conditions in 2003 will be similar to those experienced in 2002. Housing starts, which have a great influence on timber markets, are expected to decrease to reach 1.1-million unit market. It is therefore estimated that in 2003 the overall demand for timber would be forecasted almost the same as in 2002. The figures for the past four years indicate that European and Russian timber have been doing considerably well, whereas demand for Japanese, American and Canadian species has been declining. In general, the overall demand in terms of total volumes decreased due to the slow down in housing starts. The market has become more sensitive to the quality of timber. High-airtight and higly insulated houses are gaining popularity. As a result, consumers have been moving rapidly to KD and laminated lumber, which have in turn lead to the expansion of demand for European lumber. It is worth noting however that the Japanese housing is still price sensitive that is users are still interested in lower-priced homes. In short, it is observed that the coming years will also witness high competition in terms of quality, price and capacity of stable supply. While the wood industry has been depressed for a long time, recently the number of trading firms, wholesalers, sawmillers and house manufacturers dropping out of business has been significantly rising due to deterioration of profitability.

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e) China With the twenty—year rapid development after the reform and opening to the outside, China's furniture industry has achieved considerate scale and brimmed with the vigor. The total output value of furniture industry in 2000 has reached RMB 120 billion and increased 15.4% than the previous year, maintaining a steady increasing momentum in the decades. At present the number of furniture manufacture enterprises is over 50,000 with 5 million employees. Among the furniture producers, non-state-owned enterprises take up the largest market share followed by foreign funded enterprises and civil-run enterprises. It is worth noting however that foreign funded enterprises have been expanding considerably especially. Most civil run enterprises are small-scaled, with distinctive regional characteristics. They are mainly located in South China, East China, North China and Northeast of China. Guangdong province has the highest concentration, with more than 6000 enterprises, accounting for 12% of the total. In terms of value of output, Guangdong province produces output worth RMB 36 billion, taking up 30% of the total output, and furniture export value of RMB 1.8 billion, making up 50.5% of the national furniture export value. In 2000, the national labor productivity of China's furniture industry was RMB 2,4000/person*year. When compared to international standards, labor productivity is pretty low. This is mainly due to the low level of mechanization and the fact that the industry is dominated by small scale enterprises. Wooden furniture occupies the major part of furniture products, followed by metal furniture. Rattan furniture and plastic furniture make up a small proportion of the industry. A survey conducted by the National Bureau of Quality Control and Quarantine shows that one third of wood furniture has quality problems. While large-scale enterprises enjoy a comparatively good reputation as to the quality of their furniture products, medium or small-scale enterprises have many quality problems. Environment related issues represent the major quality challenge facing China's furniture industry. The issue of environmental protection index, such as the excess release quota of formaldehyde of man-made panels, seriously affects the quality of the furniture products. However, the sense of green products in the furniture industry is increasing gradually. Product design is another significant weak point in China's furniture industry. Furniture expenditure accounts for 1.2% of the total family expenditures. In 2000, ownership of furniture such as wardrobes, sofas and writing desks per hundred families in urban areas has decreased. The number of different kinds of furniture owned by citizens has changed dramatically. The furniture-consuming characteristics between cities and countryside are quite different. The price of furniture is declining. In 1999 and 2000, people started to become aware of the reduction in furniture prices. The fall of furniture prices is the result of developments in the furniture industry including an excess of supply over demand, the adjustment of market laws and the change of people’s consumption habits. The current market conditions indicate the beginning of a new era characterized with higher competition, large scale production and more sophisticated production techniques. In 1999, the total demand for Chinese furniture totaled RMB 73.4 billion. Domestic demand remains the main market driver. It is forecasted that demand will generally be on the rise especially in western style and kitchen furniture. Estimates indicate that the yearly demand for Kitchen furniture will average RMB 35 billion. Demand for office furniture, hotel furniture and school furniture is also expected to rise.

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Currently, Chinese exports of furniture are much higher than imports. In 2000, the volume of exports represented 24.7% of total furniture output. America, the main importer of Chinese furniture, has imported 50% of the total export volume.

The Chinese furniture industry is at the early stage of its growth and has great potential. However many challenges need to be tackled in order for the industry to meet its potential. Of these problems, quality and environmental issues are among the most serious. It is perceived that in the coming decade, the structure of the Chinese furniture industry will take qualitative change, with one third of the enterprises expanding, one third of the enterprises specializing in one or more market segment and one third of enterprises shutting down. China has become one of the world's leading forest product trade countries. Its entry into the World Trade Organization and the Asia Pacific Economic Cooperation group, its trade liberalization program and fast economic growth make it attractive for investment.

China is rapidly emerging as a major global furniture and wood product exporter.

U.S. and European furniture makers are turning to China for a large portion of their production and the trend is certain to grow. China's large manufacturing base and lower labor and overhead costs have led to increased outsourcing of furniture manufacturing to China by the US. Furniture exports from China increased by 43% between 1999 and 2000. This demand was illustrated by global Do It Yourself (DIY) and home furnishing retailers, who described their companies' plans for rapidly expanding procurement from China.

China is moving to surpass Japan as the largest wood importer in Asia.

Rising wages in China have helped to increase domestic demand for wood products. At the same time, China is emerging as the manufacturing base of choice for Western markets. Partly as a result of China's Natural Forest Protection Program, which has led to the curtailment of domestic logging, production of roundwood has fallen and imports have risen. From 1998 to 1999, imports of logs increased by 100%, sawnwood by 25 % and veneer by almost 20%. Imports from Russia alone increased 171% in the same period.

7. Conclusions and Recommendations An overall analysis of the components of the study revealed the following:

• The process of collecting, analyzing, and distributing data and statistics by information and statistics agencies, associations, and government departments is conducted through traditional techniques (using manual files systems, storing cabinets etc.). We are thus still very far away from using a ‘paper-less’ form of information collection and distribution.

• It is worth noting that according to recent estimation, “January 2003”, 90% of total statistics and information are produced by the government and government affiliated associations and agencies. Presidential resolution no. 2915 issued in 1964 is still the main resolution that governs data and statistics collection and publication. This resolution stipulates that the only legally recognized source of statistics is the Central Agency for Public Mobilization and Statistics – CAPMAS. It follows that no ministry or governmental department, public or private sector can issue or distribute any data without previous consent from CAPMAS. This resolution imposes very high degrees of restriction and hinders the development of data and statistics collection and distribution process in Egypt.

• Against this background and in an attempt to improve the availability and reliability of data, the National Democratic Party ‘Policies Secertariat’ appointed a team of experts who are currently studying the means and methods of modifying existing laws and regulation. The outcome of this will be compiled into a draft to be presented to parliament in the next session as part of the new ‘Freedom of Information Act’. An approval of this draft will hopefully bring forth more accurate and comprehensive data especially with regards to taxes, customs, licenses, information from the Commercial Registry the Investment Authority, the Ministry of International Cooperation etc. The development of more accurate and comprehensive data will place Egypt in a position where it is able to make sound decisions with regards to all aspects of society.

• Discussions with key figures in the information sector including H.E. Dr. Ehab Elwy

the Head of the Central Agency for Public Mobilization and Statistics - CAPMAS, Dr. Raafat Radwan, the Head of the Information and Decision Support Centre – IDCS and Dr. Mostafa M. Mostafa, Consultant at the National Institute for Planning revealed that there is a general awareness of the importance of conducting sectoral studies based on the compilation of first hand information. These officials however confirmed that this study undertaken by the IMC and the Chamber of Woodworks is the first initiative of its kind not only on the level of the furniture and woodworks sector but on the level of the Egyptian industry as whole. It should therefore serve as pilot project to be replicated in other major industrial sectors.

•

In this context, the project team proposes the following:

• The development of a strategy for collecting and compiling data on the furniture and woodworks industry that is based on the joint vision of the governmental bodies, representatives from the private sectors and NGOs. Such a strategy necessitates the establishment of a committee that includes experts from the tax and customs

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authorities, finance and monetary sectors, as well as industrialists and business associations etc. The presence of all these groups will contribute to the development of a coherent vision for the furniture and woodworks industry as well as the necessary steps needed to bring forth growth.

• It is perceived that this strategy would result in the formulation and implementation

of a pilot project for the furniture and woodworks sector that introduces state of the art data collection and sharing techniques. Such an initiative should eventually be applied on the level of the industrial sector as a whole.

• The development of any industrial sector requires the implementation of a set of

information related activities to assist it in becoming more competitive in the local and international market. In other words, the compilation and processing of general information should serve as a first stage that should be followed by the development and implementation of a comprehensive prioritized research plan. In this context, this study should serve as a preliminary investigation of the furniture and woodworks sector. The following areas have been identified as requiring further research:

o Investigation of the production capacity of the furniture and woodworks sector as well as overall investment in the sector is necessary.

o The ‘used furniture market’ is a market segment has been expanding and that there are a significant number of retailers all over Egypt that deal in both used and new furniture. Sources of used furniture come which usually come from embassies, hotels, and ministries are either sold through retail outlets or through auctions. In this context, an in depth analysis of aspects such as size, locations, salesmen, capital, ownership etc is necessary.

o The growth of the ship-building industry: It is important to note that the number of entities involved in ship-building and maintenance (196) appears to be significantly large, rendering it an important sub-sector that needs to be promoted and expanded.

o Changes in demographic patterns (distribution of age groups) and their impact on the furniture and woodworks market in terms of demand and supply of labor force

o Production Capacity and labor force employed by Feeding Industries o An in depth analysis of the tourism industry and the potential it offers to the

furniture industry o An in depth analysis of the building and construction market and its impact on

the furniture industry o An in depth analysis of the education and health sectors with a special focus

on the forecasted growth in the number of schools and hospitals. o An in depth analysis of the automobile industry and the transportation sector o An in depth analysis of the packaging industry. o It is highly recommended to do further research on the total production and

manpower of feeding industries.

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Annex 1 List of Abbreviations

CAPMAS – The Central Agency for Public Mobilization and Statistics CEEC – Central and Eastern European Countries, CIS – Commonwealth of Independent States DMEC – Developing Market Economies and China EU – European Union EFTA – European Free Trade Area GOFI – The General Organization for Industrialization IDSC – The Information and Decision Support Centre / Cabinet of Egyptian Ministries ITP – The International Trade Point ITC – The International Trade Centre MOFT – The Ministry of Foreign Trade OECD – Organization for Economic Cooperation and Development UN – The United Nations UNSTATS – The United Nations Statistics Division UNECE – United Nations Economic Commission for Europe

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Annex 2 List of Tables

Table 1.

Furniture & Woodworks Factories Registered at the Industrial Registry

Page 21

Table 2.

Woodworks Factories (ISIC code: 3311) Registered at the Industrial Registry

22

Table 3. Furniture Factories (ISIC code: 3321) Registered at the Industrial Registry

23

Table 4. Woodworks and Furniture Manufacturing entities Listed at the Industrial Map

24

Table 5. Woodworking and Furniture factories Registered at GOFI

26

Table 6. Discrepancies between data obtained from the Industrial Map and GOFI on the total number of furniture and woodworks factories

27

Table 7. Discrepancies between data obtained from the Industrial Registry and GOFI

29

Table 8. Furniture and woodworks factories registered at the Commercial Registry (With capital > 50,000 L.E. and capital < 50,000)

32

Table 9. Furniture and Woodworking Factories (Capital >50,000) Registered at the Commercial Registry

33

Table 10. Furniture and woodworking factories (Capital <50,000) registered at the Commercial Registry

34

Table 11. Furniture & Woodworks Entities classified by Product

35

Table 12. Furniture and Woodworking Wholesalers registered at the Commercial Registry

37

Table 13. Furniture and Woodworking Retailers registered at the Commercial Registry

39

Table 14. Furniture & Woodworks Feeding Industries

41

Table 15. Numbers of Workshops registered in Furniture & Woodworks Cooperatives

43

Table 16. Number of Furniture Cooperatives/ Governorate

44

Table 17. Comparison Between Statistics on Workshops obtained from the Commercial Registry and the Ministry of Local Development

46

Table 18. Military Production of Furniture & Woodworks, Fiscal Year 2002-2003

48

Table 19: Calculation of the Total Number of Woodworks and Furniture Entities

49

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Table 20. Egyptian Imports of wood, wood products, wood, classified by Product, HS1996 Code

59

Table 21. Egyptian Imports of Each type of raw wood classified by country (US$ 000,000)

61

Table 22. Egyptian Imports of Wood and Wood Products - HS 1996 Code 44 (MOFT Vs. CAPMAS)

66

Table 23. Egyptian Imports of Raw wood and wood products Classified by Country ( HS1996 Code # 44) – UNSTATS

68

Table 24. Egyptian imports of raw wood and wood products by region, HS1996 Code # 44 - UNSTATS & MOFT

70

Table 25. Imports of Wood & Wood Products from Major Trading Partners

72

Table 26. Egyptian Imports of Wooden Furniture Classified by Product

74

Table 27. Egyptian Imports of Wooden Furniture Classified by country of origin (US$ 000,000)

75

Table 28. Egyptian imports of Furniture, lighting, signs, prefabricated buildings (HS1992 Code #94) classified by Product – Egyptian Statistics

76

Table 29. Imports of Furniture & Prefabricated Buildings

77

Table 30. Egyptian Imports of Furniture, Lighting, Signs, Prefabricated Buildings Classified by Country ( HS1996 Code # 94) – UNSTATS

81

Table 31. Comparison between Egyptian s Statistics (MOFT) and Foreign Statistics (UNSTATS) for Total Imports of Furniture, lighting, signs, prefabricated buildings (HS1996 Code # 94)

83

Table 32. Egyptian Imports of Paints

87

Table 33. Egyptian Imports of Glues and Adhesives

89

Table 34. Imports of Tools & Machinery

90

Table 35 Egyptian Imports of Nails

91

Table 36 Egyptian Exports of Wood, Wood Products & Charcoal – HS 1996 Code 44 – Classified by Country

93

Table 37 Egyptian Exports of Wood, Wood Products– HS 1996 Code 44 – Classified by Region

95

Table 38 Egyptian Exports of Raw wood and Wood products– UNSTATS

97

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Table 39 Egyptian Exports of Wood by Region, HS1996 Code # 44 – UNSTATS & MOFT (US$ 000,000)

101

Table 40 Comparison of Statistics for Main EU Trading Partners

103

Table 41 Comparison of Statistics for Selected Arab Countries

104

Table 42 Comparison of Statistics for the NAFTA

105

Table 43 Egyptian Exports of Wooden Furniture Classified by Product

106

Table 44 Egyptian Exports of Wooden Furniture Classified by country

107

Table 45 Egyptian Exports of Furniture classified by Region HS1996 Code # 94 - -Egyptian Statistics

109

Table 46 Egyptian Exports of Furniture, Lighting, Signs, Prefabricated Building

111

Table 47 Egyptian Exports of Furniture (HS1996 Code # 94)

113

Table 48 Comparison between Egyptian and Foreign Sources of Statistics for Exports of Furniture, lightings, signs & prefabricated buildings (HS1996 Code # 94)

116

Table 49 Comparison of Egyptian Exports Statistics for Furniture, Lighting, Signs & Prefabricated Building to Lebanon & Saudi Arabia

118

Table 50 Number of Workers Classified by Geographic Location - GOFI

124

Table 51 The Number of Workers in the Furniture and Woodworks Industrial entities Registered at Industrial Registry

125

Table 52 Comparison between the Figures for Labor GOFI vs. the Industrial Registry

127

Table 53 Number of Workers Registered with Furniture & Woodworks Cooperatives

128

Table 54 No. of Furniture & Woodworks Entities and Workers Registered at the Ministry of Insurance & Social Securities

129

Table 55 Number of Workers Registered with GOFI and the Ministry of Local Development

130

Table 56 Number of Technical Schools classified by Geographic location

131

Table 57 Graduates from Industrial Schools of Relevance to the Furniture Industry

133

Table 58 Number of Trainees in Vocational Training Centers

136

Table 59 Graduates of the Faculty of Applied Arts - Interior Design and Furniture section

137

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Table 60 Custom Duties, Sales Tax and Service Fees Paid by Importers of Wood & Wood Products (US$ 000,000)

142

Table 61 Value of Custom Duties, Sales Tax and Service Fees Paid on Imports of Furniture, Lighting, Signs and Prefabricated Buildings (HS 1996 Code 94)

145

Table 62 Number of Tax Payers - Furniture & Woodworks Registered at the General Tax Authority

148

Table 63 Total Value of General Taxes Paid by Furniture and Woodworks producers

149

Table 64 Egyptian Consumption of Wood Furniture & Woodworks

152

Table 65 Total Number of Hotels and Resorts

154

Table 66 Capacity of the Egyptian Tourism Sector

155

Table 67 Discrepancies between Statistics Obtained from CAPMAS and the Ministry of Tourism on the Number of Hotels and Rooms

156

Table 68 Hotels, Resorts and Floating Hotels (Year 2001- 2003 )

157

Table 69 Imports of Wooden Furniture – Selected Markets

161

Table 70: Imports of Softwood – Selected Markets

162

Table 71: Imports of Hardwood – Selected Markets

162

Table 72: Imports of Softwood Lumber– Selected Markets

163

Table 73: Imports of Hardwood Lumber – Selected Markets

163

Table 74: World Imports of Wooden Furniture

164

Table 75: Value of OECD Imports from DMEC Area in 2000 (US$ Billion)

165

Table 76: OECD Imports of Wooden Furniture by Destination

167

Table 77: OECD Imports of Wooden Furniture by Country of Origin

168

Table 78: EU Production in the woodworking industry in million EUR, 1996-2000 173

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Annex 3 List of Exporters of Egyptian Wooden Furniture

The following list includes the names and contact information of companies engaged in the exportation of Egyptian wooden Furniture. Data has been compiled from the Kompass database and the Ministry of Foreign Trade Database.

Company Name Address Tel no. Alexandria

Alexandria Wood Industries (Mobilor) El- Mkabaty Land, Smouha 03/ 4274111

Abd El-Radye Co. 119, Ebn El-Sear El-Qabary - Menea El- Basal N/A

Alex Qubec Service 59, Safya Zagloul St N/A Egy – Trans 11, Kamal Moursy El-Shatbe N/A El-Akram for Trading Co. Queen El-Asafra - El-Montazh N/A

Fatea for International Export 2, Mahmoud Azme St - El-Ataryn N/A

Mohammed Mustafa Co. 45, El-Ataren St N/A

Nas for Trading & Exporting 59, Eskandr Ebrhim St - Meame N/A

Rock Bottom Co. 36, El-Gamaea El-Esthlakea St - El-Montazh N/A

Amir Furniture Showroom 108, Masged El-Attareen St, El Attareen 03/ 4846295

Arab Furniture (Al- Atrouch) 2, El- Sheikh Ali Youssif St, El-Labban 03/ 3903274

Coteco Commercial & Engineering 15, El- Horreya Rd 03/ 3916874 Decorative Furniture Factory Km.23.5 Cairo/Alex Rd 03/ 4701090 Gmmal Trading 19, El-Galaa St, Victoria 03/ 5336208

Int’l exchange (Index) 15, Horrey St, Ramsis Enterance 03/ 4929131

Int’l Furniture Manufacture & Trade ( Azmy Furniture )

2nd, Industrial Zone Block No 7 03/ 4590345

J.T.M Int’l Import & Export 2,Adly Yakan St, Glim 03/ 5861266 Joetrans Import & Export 11 El-Nasr St, El-Mansheya 03/ 4873505

Kobtan Furniture Factory Second Zone Area No, 3 Block 15, Borg El Arb 03/ 4594067

La Maison Int’l Furniture 340,Canal El-Mohmoudua El-Bahari 03/3928575

Lariana Import & Export 8,Misr Co, St Latin District 03/ 486213 Madkour Int’l for Export 34, Ahmed Hafez St 03/ 5486531

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Company Name Address Tel no.

Patcho Om Zeghio Km5, After Free Zone 03/ 4806316

Ribatt Contracting Office Amr Ibn El-Aas St, Assfra El-bahreya 03/ 5502969

Stylesia Furniture & Wood Industry

19, Al-Ahwesa St, Mina El-Bassal 03/ 3929131

Touch Wood Modern Wood Industries

Kingi Mariout, off Railway Line,Amreya 03/ 4551448

Wahab Furniture Meamary Towers, 160 Ahmed Shawky St, Roushdy 03/ 5428682

Cairo Abd El- Ghafar Furniture Companies Group

39, El- Boustan st, Bab El-Louk 02/ 7944948

Alaa El- Maghrabi Furniture 9,El-Ferkaany St, off El-Qalaa St 02/ 5113544

Alfa for Furniture & Decoration 57,Abd El-Hakim El-Refaie St Nasr City 02/ 2979898

Artisan 717,Port Said St, Ghamra 02/ 2859611 Fret Way Co. 1216 Masaken Sheraton N/A Glob Service Co. 6B, Kasr El-Nil St N/A Habye Exporting & Importing Co. 30, Darwesh St N/A Haredey for Exporting & Importing Co.

41, Hanen Ebn Eshak St- Naser City N/A

Hyen Zakye for Exporting Co. 4, Shrif Basha El-Kaber N/A

Magic International Service 11, Emarat El-Marwa - Mis El-Gdeda N/A

Mervat Abd Allah Co. 28, Ramisi St N/A Mohsen Smarah 36, Mostafa Basha - El-Zeton N/A Rwshde El-Sager Co. 15, Rwshdy St - Abden N/A Samer Abo Zaed Co. 3, Al-fred St - Ezbet El Nhakl N/A Shalbye Brothers Co. 127, Ramsis St N/A Star For Exporting 39, kamel Fathy St N/A

Tarek Hassan Zakye Co. 4, Ebrahim Maklef - Ezbet El-Nhakl N/A

Tarek Darwesh Exporting Office 7, Masaken El-Sheraton N/A Troubks for Shipping Service 27,Masaken El-Sheraton N/A Education Project Co. 25, Talat Harb St N/A

Egypt Falcon Co. 15, Dr: Aly Ebrahim Ramyz - Heleopolis N/A

Abo Shpana Export Co. 34, Afriac St - Nasr City N/A

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Ahmed Hesan Aly Co. 14,Abd El-Azez Yousef Ein Shams N/A

Ahmed Twfek Mahmod Co. 12, Twfek Mohamed St - Nasr City N/A

Ain El-Heya Co. 58, Naswh - El-Zaeton N/A Arab Arrow for Export & Import 45, Emarat El-Swdea N/A Arw International 1, El-Ansary Ein Shams N/A Atlas for Shipment Service Co. 1,Arb Contractor St N/A Dalas Exporting & Importing Co. 14, El-Eshren St, Ein Shams N/A Dar El-Slam Co. 70,Kloud Bek - El-Azbakea N/A Ebad El-Rhman for Exporting Co.

41, Nagib El-Rehaney - El-Azbakeh N/A

Egypt – Lebanon for Exporting Co. 3, Mostafa Ebrahim St N/A Egypt Office for Exporting 83,Nasr St N/A

Egypt Sky Way Export Co. 15, Yaqub El-Qabty - Ancient Egypt N/A

El-Ala for Exporting & Importing 35,Ashraf El-Seed St N/A El-Fath for Exporting Co. 15, Rwsdy - Abdin N/A El-Mashrabeya for Export & Trading

5, El-Mwardey - El-Seda Zenab N/A

El-Safa Export & Import Foundation 107, Cornich El-Nil - El-Maadi N/A

El-Sbah for Export Co. 6,Shaban Mousy St - Ezbet El-Nhakl N/A

El-Slam Trading for Export & Shipment

45,Mahmod El-Gnde St - Nasr City N/A

Eros Exporting Co. 44, Ahmed Moktar St N/A Esko For Trading Co. 79, Hdaak El-Kwba St N/A Bassatin Metal works Factory El- saftawi & Co

Ind.Zone 1 Area 15 El-Khalifa El-basatin 02/ 7021430

Dafrawi Furniture & Décor Showroom

El-Naam Towers 8-10 El-Matariya St 02/ 6345416

Debag Advanced Furniture (Amr Helmy Designs) 34,Orabi St , El-Nahda Sq 02/ 3590540 Delta Egypt Progressive Furniture ( DEPCO )

5,El-Massanea St Ind. Zone off Gharab Elestad St 02/ 2619500

Deutsche Int’l Trade & Investment 5 El-Mahatta St. 02/ 5554570

Egy Plus 12B EL-Marwa Bldgs El-Merghani 02/ 2918584

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Company Name Address Tel no. Enoch Import , Export & Commercial Agencies

Bldg.10,19 El Tob El Ramli Flat No.44 02/ 4094967

Furniture Production Establishment ( Mobilic Décor)

242,Ahmed Esmat St, Corner of Geusr El-Suez 02/ 2968109

Hak for Wood & Furniture Trading 40, Ein Shans St. 02/ 4911043 Imexport 40, El-Sultan Abo El-Ela St 02/5760073

K.M.K Furniture & Décor 31, Ahmed Fouad St, Saint Fatima 02/ 6350557

Kassed Karim Bayoumi Furniture

El-Merghani Rd Koleyat El-Banat 02/ 2905696

Kesseba Establishment for Import & Export 31, Ahmed Hesmat St 02/ 736295 National Bride & Groom Hlmiet El-Zeitoun Sq 02/ 2424624 National Engineering & Industrial Services (Neisco)

4,Military Enginnering Towers, Naser City 02/ 4018412

Qemma Trade & Distribution 5,Hassan El-Mamoun St, Ext, of Ahly Club 02/ 2744134

Queen Furniture Ind,Zone off El Gazair St, Basateen 02/ 7020466

Samary Furniture 50.Kasr El-Nil St 02/ 3916488 Senior Furniture 34,Port Said St, Ghamra 02/ 4250780 Soviplast for Stationery Tools Manufacturing

6th, District, Plot 66/68 Badr City 015/ 210073

Tagoury Trading Center Adel El- Tagoury 53, Ramsis St Roxy 02/ 2582256

The Int’l Office for Commercial Transactions (Inter Comment) 22,Abd El-Khalek Tharwat St 02/ 3927350 Trans Express Worldwide Cargo 15,Khorshid St, Maadi 02/ 7034915 Dakahleya N/A Saabi Exporting Trading House 49,Farida Hassan St 50/ 312516

Damietta

Amal Misr Souk, El-SamakEl-Kabir Mohamed Abdu St 057/ 329644

Asal Furniture Awal Ezbaat El-Borg Rd 057/ 343415 Pharos Factory 14, Terat Abo Mosalam St N/A Nasr Mohammed Osman Co. 88, El-Fanar St N/A El-Ahram Exporting Co. 12, Hashmat St N/A

Azzab Furniture Factory Ind.Zone , new Damietta 057/ 402885

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Dawleya Import & Export 9,Damietta St Beginning of El-Matboli St 057/ 332686

Egyptian Ukrania for Export , Import & Maritime Transport St.No,101 Villa 28 Ras El-Bar 057/ 528620 Fathy El- Labaan for Importing & Exporting El-Galaa St , El-Galaa Sq 057/ 336161 Furniture City 3,Saad Zaghloul St 057/ 322684 Ghazawi for furniture 11, Saad Zaghluol St 057/ 321755 Halawani Import & Export Establishment 6, El- Tahrir St 057/ 7614035Hassan El- Murr Brothers for Sitting Rooms Cornich El-Nil St 057/ 334088

Hassan Negm Sons Furniture El Tahrir St in Foront Of Omar Effendi 057/ 324714

Int’l Maritime & Shopping (damitrans)

Malah Bldg Galaa St, El-Kabass Sq 057/322957

Int’l Trade & Transport Office 100,Fekry Zaher St 057/ 3277281Mohamed Mohamed Fathy El-Labban & Partner

El-Galaa St ,Behaind The Bus Station 057/ 322518

Nasr Baraw Furniture Aed El-Haras El-Watany 057/ 325993 Raafat El- Bayoumi Furniture Fekry Zaher St 057/ 322554

Stat Meuble Police Tower, Cornich El-Nile St 057/ 342728

Gharbeya N/A

Logic Technology off Hassan Radwan With El-Helw Tanta 40/ 3310863

Saad Mohamed Saad Furniture Km6 Mehalla/Tanta Ind,Rd 40/ 2221483

Giza Modern Building Carpentry – Farouk Abd El- Moneim &Co (Mobica)

El- Mohawellat Rd, Km 28 Cairo/Alex 02/ 5390091

National Art Development Industries Mashrabeya (Nadim) 5, Masanea st, Bin El- sarayat 02/ 7481075 Misr General Motors 3, Abo El- Feda - El-Zamalek N/A Alexandria For Glass Industry 44, El- Agwza St N/A Arab Shipment & Trading Co. 29, El-Mesaha St - Dokki N/A

El-Mahdey for Exporting 1, Maka off Gamal Abd El-Naser St - Fesal N/A

Free Cool for Engineering Industry 43, Abd El-Menam - El-Agwza N/A

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Company Name Address Tel no. Gelet Limited Co. 28Km, Misr / Alex Road N/A Misr Express Co. 23, Adly Habeb St - fesal N/A Abd El- Rahim Amr Furniture Establishment 6,Rashdan st, Messaha Sq 02/ 749119

Dimension Project & Furniture 1st , Industrial Zone , Plot 165/B 02/ 8331656

Egymeuble Nahda Tower 21,Ahmed Orabi st. 02/ 3455375

Egyptian Furniture & Interior design (Antique) Industrial Zone Osim - Embaba 02/ 4553706 Kasr Furniture 146, 26th July St, Agouza 02/ 3460811

Kato Prestige Cosmetics Industrial Zone No. 2 Plot No. 220 02/ 8331260

Mansour Gallery 64, Teraat El-Maryotia St 02/ 3835349

Mazy Import & Export 4,Omar AbdEl-Aziz St, off Shehab St 02/ 3382787

Molouk Furniture 13, El-Mathaf El-Zeraei St, Agouza 02/ 7499818

New wood Tereat El-Mariouteya 02/ 3856345 Practicals Wood Manufacturing (Practico)

4th,Industrial Zone Plot No.8, 6th October 02/ 8330078

Three A Furniture First Industrial Zone, Area 146 6th October 02/ 8330860

Unisas Int’l 49, El-Hegaz St, Mohandessin 02/ 3021524

Port Said Slah El-Den Ebrahim Co. 6, El-Zuhwr St N/A Mondial Shipping & Trading (M.S.T)

El- Tawhid Bidg Mohamed Ali & El-Nile st 066/ 242600

Sharkeya

El-Boraq Co. 10th of Ramadan Ind.Zone - Mogawra 6 N/A

Arquwarzo Egypt / Italy Co. 10th of Ramadan Ind.Zone N/A Egyptian Fiber Manufacturing & products ( Bed Taki)

Ind . Zone A1 , Area No.3/3 10th of Ramadan N/A

Akhdar – Export & Import & Commercial Agencies 4th District, 2nd Bldg 015/ 366449

Belmondo of Egypt Ind.Zone B2 Area No. G3 Khartoum St 015/ 361927

Samirco Metal Furniture Industrial Zone A2 Area 3/5/12, Akhnaton St 015/363209

Taki Factories Ind.Zone A1 Area No. 11/5 015/ 410093 Zaki for Furniture & Decoration 8, Saad Zaghloul St, Zagazig 055/ 355283

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Annex 4 Furniture and Woodworks Entities

Benefiting from the Drawback system (1999 - 2003)

The following table includes the names of the companies benefiting from the draw back system in their export transactions. The list also includes the export destination of these transactions. It is worth noting however that the investigation has revealed that the drawback system has proven useful for certain inputs namely textiles and upholstery as opposed to others such as wood imports. Code Product Type Country Number Name of Entity

1999

4421909090 Other types of wooden products under code 2144 UAE 100336108

El Helal Factories for Home Appliances

4421909090 Other types of wooden products under code 2144 Srilanka 100336108


9403600090 Other types of wooden furniture Spain 204945119 Alpha Ceramics

9403500000 Wooden Bedroom furniture USA 618069097 Mahmoud Mahmoud Shoman

9403500000 Wooden Bedroom furniture USA 461930838

Aza Abdel Ghani and Hazawai Parters

9403500000 Wooden Bedroom furniture Holland 100110687

Alexandra Spinning and Weaving Company

2000

4421909090 Other types of wooden products under code 2144 Yemen 100064965

Pharoah Factory - Abdel Salam Zaki Abdel Salam

4421909090 Other types of wooden products under code 2144 Srilanka 100336108

El Helal Factory for Home Appliances

940350000 Wooden Bedroom furniture USA 405694806 Anwar Gaber Abdel Halim

940350000 Wooden Bedroom furniture USA 254278779

El Euopia for Exports and Imports - Ehab

940350000 Wooden Bedroom furniture France 100259235

Islamic Company for Electric Appliances

940350000 Wooden Bedroom furniture Italy 100259235

Islamic Company for Electric Appliances

9403600010 Other types of wooden Home furniture USA 100186076 Nahdet Samanood Factory

9403600010 Other types of wooden Home furniture France 100184758 Abu Sebaa's Textile Factory

9403600010 Other types of wooden Home furniture Italy 329664468

El Israa Furniture - Hassan Ali Ibrahim

9403600010 Other types of wooden Home furniture Belguim 618174060 Mohamed Mostafa Fouda

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Code Product Type Country Number Name of Entity 2001

4420901000 Carved wood Germany 207446733Gama Group - Ibrahim Wahid Mohamed Khayal

9403300000 Offce furniture UK 202455165 Baby Koka Clothes Company

4421909090 Other types of wooden products under code 2144 Sri lanka 100336108


9403600010 Other types of wooden Home furniture

Saudi Arabia 204961254 El Manzel for Furnishings


South Africa 204961254 El Manzel for Furnishings




South Africa 204961254 El Manzel for Furnishings

9403600010 Other types of wooden Home furniture Portugal 204961254 El Manzel for Furnishings

9403600010 Other types of wooden Home furniture France 100049710 Lontex Comapany



9403600010 Other types of wooden Home furniture Canada 706004140

Egypt - Toronto Company for Furniture

4421909090 Other types of wooden products under code 2144 Ireland 100398596 Educational Projects Company

9403600010 Other types of wooden Home furniture Austria 6.185E+09

Prince Importing Company - Abdel Razek EL Prince

9403600010 Other types of wooden Home furniture USA 307507440

Santa Monica - Antoinr Anis Sa'eed

4421909090 Other types of wooden products under code 2144 Qatar 100398596 Educational Projects Company

4421909090 Other types of wooden products under code 2144 Lebanon 100398596 Educational Projects Company


Egypt - Free trade 200190806

Mardini Tex for Spinning and Weaving

2002


Saudi Arabia 100258859

Larouche, Egyptian Company for Production

9403300000 Offce furniture France 100398596 Educational Projects Company


Saudi Arabia 205033245

Patch Egyptian Company

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Code Product Type Country Number Name of Entity

4421909010 Other types of wooden Home furniture Canada 706004140




9403600010 Other types of wooden Home furniture Belguim 706004140


4421909090 Other types of wooden products under code 2144 Lebanon 100398596 Educational Projects Company

9403600010 Other types of wooden Home furniture Kuwait 330646494 Wood Appliances Company



4421909090 Other types of wooden products under code 2144 USA 100398596 Educational Projects Company

9403600010 Other types of wooden Home furniture Italy 200140558

El Mashrabeya Products - Blana Development

9403600010 Other types of wooden Home furniture Saudi Arabia 204961254 El Manzel for Furnishings

9403500000 Bedroom furniture Saudi Arabia 204961254 El Manzel for Furnishings

9403600090 0ther types of wooden furniture France 200094866 Sany Acrelic

4421909090 Other types of wooden products under code 2144 USA 100398596 Educational Projects Company

4421909090 Other types of wooden products under code 2144

European Union 100398596 Educational Projects Company

4421909090 Other types of wooden products under code 2144 Austrailia 100398596 Educational Projects Company

9403600090 0ther types of wooden furniture USA 706004140


9403600090 0ther types of wooden furniture Kuwait 205037100 Kandil Company

4421909090 Other types of wooden products under code 2144 Cyprus 100398596 Educational Projects Company

4421909090 Other types of wooden products under code 2144 Italy 100398596 Educational Projects Company

9403600090 0ther types of wooden furniture Cyprus 701210990 BlueSky Exporting Company


Egypt - Free trade 205036279 French Furniture Company

2003

9403600010 Other types of wooden Home furniture France 205117694

El Nadim Company for the Production of Mashrabeyat

9403600090 Other types of wooden furniture

Egypt - Free Trade 293699208 Ibrahim Othman Ibrahim

9403600090 wooden furniture - Other Egypt - Free

Trade 200162772 Halloumi Company for Trade & Furniture

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Annex 5 Forest products terminology

Coniferous (softwood) All woods derived from trees classified botanically as Gymnospermae, e.g. Abies spp., Araucaria spp., Cedrus spp., Chamaecyparis spp., Cupressus spp., Larix spp., Picea spp., Pinus spp., Thuja spp., Tsuga spp., etc. These are generally referred to as softwoods. Non-coniferous (hardwood) All woods derived from trees classified botanically as Angiospermae, e.g. Acer spp., Dipterocarpus spp., Entandroprhagma spp., Eucalyptus spp., Fagus spp., Populus spp., Quercus spp., Shorea spp., Swietonia spp., Tectona spp., etc. These are generally referred to as broadleaves or hardwoods. Tropical Tropical timber is defined in the International Tropical Timber Agreement (1994) as follows “Non-coniferous tropical wood for industrial uses, which grows or is produced in the countries situated between the Tropic of Cancer and the Tropic of Capricorn. The term covers logs, sawnwood, veneer sheets and plywood. Plywood which includes in some measure conifers of tropical origin shall also be covered by the definition.” For the purposes of this terminology, tropical sawnwood, veneer sheets and plywood shall also include products produced in non-tropical countries from imported tropical roundwood. Transactions Removals The volume of all trees, living or dead, that are felled and removed from the forest, other wooded land or other felling sites. It includes natural losses that are recovered (i.e. harvested), removals during the year of wood felled during an earlier period, removals of non-stem wood such as stumps and branches (where these are harvested) and removal of trees killed or damaged by natural causes (i.e. natural losses), e.g. fire, windblown, insects and diseases. It excludes bark and other non-woody biomass and any wood that is not removed, e.g. stumps, branches and tree tops (where these are not harvested) and felling residues (harvesting waste). It is reported in cubic metres solid volume underbark (i.e. excluding bark). Where it is measured overbark (i.e. including bark), the volume has to be adjusted downwards to convert to an underbark estimate. Primary products The names of individual forest products and product aggregates are listed below in the order in which they occur in the publication Forest Products Statistics. Separate definitions are not provided for coniferous and non-coniferous components where the general definition given above applies. Unless indicated otherwise, each forest product category includes both coniferous and non-coniferous components. Roundwood All roundwood felled or otherwise harvested and removed. It comprises all wood obtained from removals, i.e. the quantities removed from forests and from trees outside the forest, including wood recovered from natural, felling and logging losses during the period, calendar year or forest year. It includes all wood removed with or without bark, including wood removed in its round form, or split, roughly squared or in other form (e.g. branches, roots,

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stumps and burls (where these are harvested) and wood that is roughly shaped or pointed. It is an aggregate comprising wood fuel, including wood for charcoal and industrial roundwood (wood in the rough). It is reported in cubic metres solid volume underbark (i.e. excluding bark). Wood fuel (including wood for charcoal) Roundwood that will be used as fuel for purposes such as cooking, heating or power production. It includes wood harvested from main stems, branches and other parts of trees (where these are harvested for fuel) and wood that will be used for charcoal production (e.g. in pit kilns and portable ovens). The volume of roundwood used in charcoal production is estimated by using a factor of 6.0 to convert from the weight (mt) of charcoal produced to the solid volume (m3) of roundwood used in production. It also includes wood chips to be used for fuel that are made directly (i.e. in the forest) from roundwood. It excludes wood charcoal. It is reported in cubic metres solid volume underbark (i.e. excluding bark). Industrial roundwood (wood in the rough) All roundwood except wood fuel. It is an aggregate comprising sawlogs and veneer logs; pulpwood, round and split; and other industrial roundwood. It is reported in cubic metres solid volume underbark (i.e. excluding bark). The customs classification systems used by most countries do not allow the division of Industrial Roundwood trade statistics into the different end-use categories that have long been recognized in production statistics (i.e. saw and veneer logs, pulpwood and other industrial roundwood). It excludes telephone poles. Sawlogs and veneer logs Roundwood that will be sawn (or chipped) lengthways for the manufacture of sawnwood or railway sleepers (ties) or used for the production of veneer (mainly by peeling or slicing). It includes roundwood (whether or not it is roughly squared) that will be used for these purposes; shingle bolts and stave bolts; match billets and other special types of roundwood (e.g. burls and roots, etc.) used for veneer production. It is reported in cubic metres solid volume underbark (i.e. excluding bark). Pulpwood, round and split Roundwood that will be used for the production of pulp, particleboard or fibreboard. It includes: roundwood (with or without bark) that will be used for these purposes in its round form or as splitwood or wood chips made directly (i.e. in the forest) from roundwood. It is reported in cubic metres solid volume underbark (i.e. excluding bark). Other industrial roundwood Industrial roundwood (wood in the rough) other than sawlogs, veneer logs and/or pulpwood. It includes roundwood that will be used for poles, piling, posts, fencing, pitprops tanning, distillation and match blocks, etc. It is reported in cubic metres solid volume underbark (i.e. excluding bark). Wood charcoal Wood carbonised by partial combustion or the application of heat from external sources. It includes charcoal used as a fuel or for other uses, e.g. as a reduction agent in metallurgy or as an absorption or filtration medium. It is reported in metric tonnes. Chips and particles Wood that has been deliberately reduced to small pieces during the manufacture of other wood products and is suitable for pulping, for particle board and fibreboard production, for

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use as a fuel, or for other purposes. It excludes wood chips made directly (i.e. in the forest) from roundwood (i.e. already counted as pulpwood, round and split). It is reported in cubic metres solid volume excluding bark. Wood residues The volume of roundwood that is left over after the production of forest products in the forest processing industry (i.e. forest processing residues) and that has not been reduced to chips or particles. It includes sawmill rejects, slabs, edgings and trimmings, veneer log cores, veneer rejects, sawdust, residues from carpentry and joinery production, etc. It excludes wood chips made either directly (i.e. in the forest) from roundwood or made from residues (i.e. already counted as pulpwood, round and split or wood chips and particles). It is reported in cubic metres solid volume excluding bark. Sawnwood Wood that has been produced from both domestic and imported roundwood, either by sawing lengthways or by a profile-chipping process and that, with a few exceptions, exceeds 5 mm in thickness. It includes planks, beams, joists, boards, rafters, scantlings, laths, boxboards, sleepers and "lumber", etc., in the following forms: unplaned, planed, fingerjointed, etc. It excludes sleepers, wooden flooring, mouldings (sawnwood continuously shaped along any of its edges or faces, like tongued, grooved, rebated, V-jointed, beaded, moulded, rounded or the like) and sawnwood produced by resawing previously sawn pieces. It is reported in cubic metres solid volume. Wood-based panels This product category is an aggregate comprising veneer sheets, plywood, particle board, and fibreboard. It is reported in cubic metres solid volume. Veneer sheets Thin sheets of wood of uniform thickness, rotary cut (i.e. peeled), sliced or sawn. It includes wood used for the manufacture of laminated construction material, furniture, veneer containers, etc. It excludes wood used for plywood production within the same country. It is reported in cubic metres solid volume. Plywood A panel consisting of an assembly of veneer sheets bonded together with the direction of the grain in alternate plies generally at right angles. The veneer sheets are usually placed symmetrically on both sides of a central ply or core that may itself be made from a veneer sheet or another material. It includes veneer plywood (plywood manufactured by bonding together more than two veneer sheets, where the grain of alternate veneer sheets is crossed, generally at right angles); core plywood or blockboard (plywood with a solid core (i.e. the central layer, generally thicker than the other plies) that consists of narrow boards, blocks or strips of wood placed side by side, which may or may not be glued together); cellular board (plywood with a core of cellular construction); and composite plywood (plywood with the core or certain layers made of material other than solid wood or veneers). It excludes laminated construction materials (e.g. glulam), where the grain of the veneer sheets generally runs in the same direction. It is reported in cubic metres solid volume. Non-coniferous (tropical) plywood is defined as having at least one face sheet of non-coniferous (tropical) wood.

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Particle board (including oriented strandboard (OSB)) A panel manufactured from small pieces of wood or other ligno-cellulosic materials (e.g. chips, flakes, splinters, strands, shreds, shives, etc.) bonded together by the use of an organic binder together with one or more of the following agents: heat, pressure, humidity, a catalyst, etc. The particle board category is an aggregate category. It includes particle board; oriented strandboard (OSB) and flaxboard. It excludes wood wool and other particle boards bonded together with inorganic binders. It is reported in cubic metres solid volume. Oriented strandboard (OSB) A structural board in which layers of narrow wafers are layered alternately at right angles in order to give the board greater elastomechanical properties. The wafers, which resemble small pieces of veneer, are coated with e.g. waterproof phenolic resin glue, interleaved together in mats and then bonded together under heat and pressure. The resulting product is a solid, uniform building panel having high strength and water resistance. It includes: waferboard and oriented strandboard (OSB). It is reported in cubic metres solid volume. Fibreboard A panel manufactured from fibres of wood or other ligno-cellulosic materials with the primary bond deriving from the felting of the fibres and their inherent adhesive properties (although bonding materials and/or additives may be added in the manufacturing process). It includes fibreboard panels that are flat-pressed and moulded fibreboard products. It is an aggregate comprising hardboard; medium density fibreboard (MDF); and insulating board. It is reported in cubic metres solid volume. Hardboard Fibreboard of a density exceeding 0.8 g/cm3 It excludes similar products made from pieces of wood, wood flour or other ligno-cellulosic material where additional binders are required to make the panel; and panels made of gypsum or other mineral material. It is reported in cubic metres solid volume. Medium density fibreboard (MDF) Fibreboard of a density exceeding 0.5 g/cm3 but not exceeding 0.8 g/cm3 It is reported in cubic metres solid volume. Insulating board Fibreboard of a density not exceeding 0.5 g/cm3 . It is reported in cubic metres solid volume. Wood pulp Fibrous material prepared from pulpwood, wood chips, particles or residues by mechanical and/or chemical process for further manufacture into paper, paperboard, fibreboard or other cellulose products. It is an aggregate comprising mechanical wood pulp; semi-chemical wood pulp; chemical wood pulp; and dissolving wood pulp. It is reported in metric tonnes air-dry weight (i.e. with a 10% moisture content).

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Secondary processed wood products Further processed sawnwood Wood sawn or chipped lengthwise (including strips and friezes for parquet flooring, not assembled) and continuously shaped (tongued, grooved, rebated, V-jointed, beaded, moulded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger jointed. Excludes: sawn or chipped wood with further treatment of edges and/or faces other than planing, or sanding. Wooden packaging material Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood. Casks, barrels, vats, tubs and other coopers' products and parts thereof, of wood, including staves. Builder’s joinery and carpentry of wood Including windows and doors and coverings thereof as well as cellular wood panels, assembled parquet panels, shingles and shakes. Wooden furniture Seats with wooden frames as wooden camping and garden seats etc. and parts thereof. Except: seats convertible into beds, swivel seats, medical seats. Wooden furniture other than seats as of a kind used in offices, in the kitchen, bedrooms and elsewhere, as well as parts of all these. Prefabricated buildings predominantly made of wood E.g.: Log cabins, houses predominantly prefabricated from wood-based panels. Engineered wood products These definitions come from the APA-The Engineered Wood Association. APA classifies glued engineered wood products into three general groups: 1. glued laminated timber (glulam), 2. structural composite lumber (SCL) consisting primarily of laminated veneer lumber (LVL), but also parallel strand lumber and oriented strand lumber, and wood I-beams. Glued laminated timber (glulam) Glulam is an engineered stress-rated product created by adhesively bonding together individual pieces of lumber having a thickness of 50 mm (2 inches) or less. It’s one of the most versatile of the engineered wood products. It can be easily shaped into forms ranging from straight beams to complex curved members and is used for a wide variety of structural applications in both residential and nonresidential construction. Glulam is used typically for headers, girders, purlins, beams, arches, and in exposed applications such as bridges, marinas and transmission structures. Structural composite lumber Laminated Veneer Lumber (LVL) LVL is the most widely used of the structural composite lumber products. It is produced by adhesively bonding thin wood veneers together in a large billet so that the grain of all veneers is parallel to the long direction. The LVL billet is then sawn to desired dimensions depending on the construction application. Some of the many uses are in header and beam applications, hip and valley rafters, as scaffold planking and as flange material for wood I-beams.

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Parallel Strand Lumber (PSL) PSL consists of long veneer strands laid in parallel formation and bonded together with an adhesive to form beams. Like LVL and glulam, this product is used for beam and header applications where high bending strength is needed. Oriented Strand Lumber (OSL) Similar to PSL, oriented strand lumber is made from flaked wood strands that have a high length-to-thickness ratio. Combined with an adhesive, the strands are oriented and formed into a large mat or billet and pressed. OSL is used in a variety of applications from studs to millwork components. Wood I -beams Wood I-beams are structural, load-carrying products designed mostly for floor joist applications. The beams offer long length and low material weight. Their “I” configuration provides high strength and stiffness. The flange material for I-beams is typically dimension lumber or LVL; the web material is typically oriented strand board (OSB) or plywood. Wood I-beams, used extensively in residential construction, continue to be the fastest growing of the glued engineered wood products.

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Documents

Egyptian Woodworks Monograph