The company Oriental Weavers plans to inject EGP 100m in investments during the second half of 2016 to expand its production capacity. The company aims to add seven new looms after its merger with Rozatks Modern Spinning and Weaving Company, bringing the total capital expenditures to $14.5m and the production capacity to 4.2m sqm.
Mohamed Farid Khamis, founder of Oriental Weavers, said the company completed the integration of two subsidiaries of the group last month to increase the corporate revenue by 3%. This step came as part of an initiative for the company’s future expansion, according to an investment report issued by Oriental Weavers.
Through this integration, Oriental Weavers aims to direct its future expansion in the woven carpet sector into the Oriental Weavers Textiles, which owns a 120,000 sqm plot of land.
The company only uses 28% of this land, equivalent to 33,000 sqm, on which the company built its factory. The company now owns 22 looms as well as their processing lines with a capacity of 12m metres.
Oriental Weavers plans to establish a new metal structure over an area of 33,000 sqm, which will include weaving, preparation, and storage phases. The first phase is complete and two looms were added. Four more looms are planned to be added before the end of this year.
The investment report showed that the expansion process brought the capacity up 400,000 sqm with to the addition of two more looms in both Egypt and the US, in addition to four Gobelin looms of a 67,500 sqm capacity in order to meet the growing demand for this kind of carpet. The process also saw the addition of two fabric lines in Egypt and the US.
Oriental Weavers recorded a net profit of EGP 178m over the second quarter of 2016, compared to a net profit of EGP 124.13m during the same period in 2015, a growth rate of 43.3%.
Sales recorded EGP 1.55bn compared to EGP 1.54bn during the comparison period.
Khamis confirmed that the company passed the increased cost of products during the period from May to July by increasing their average price in the local market by 7%, which is something that was received normally by the market with the price increase of carpet imports to Egypt.
Oriental Weavers explained that sales increased during the second quarter of 2016 with an annual rate of 1% owing to the increase of local sales by 4%, reaching EGP 763m. This compensated for the 3% decline of exports to EGP 786m.