Amid economic downturn, a furniture company finds success

The nation may be going through the most severe economic slowdown of the past decade, but some businesses have managed to grow despite the hard times.

Egypt Independent recently talked to one business owner whose company has found its niche in producing mid-priced, locally-made furniture to understand how some small- and medium-sized businesses can succeed by focusing on the local market.

Williams is a medium-sized local company that was founded in 1979. It has a factory in 10th of Ramadan and an outlet in Heliopolis. Until 2004 when Ramy William took over management from his father, the company was exclusively manufacturing and selling office and theater furniture.

Catering to the middle class

Having gotten married a few years before, William found himself in the same place as most newlyweds in the country; he had to find a way to furnish a new home.

“Home furniture offered on the Egyptian market was either low-quality, mostly imported from China, or very expensive luxury products, mostly from Italy,” William says. This market presented an opportunity for his company.

After deeper market study, he decided to start producing home furniture and designed a line that would target “the expanding middle class that cannot afford to buy luxury products but still wants quality and well-designed products,” he says.

Eight years later, the home furniture line makes up the bulk of his sales. Office furniture sales have dipped seriously in the past year, William adds, but demand for affordable home furniture has remained strong.

He explains that the company would be struggling in the current environment if it had not expanded its activities. William attributes the company’s current success to “advantages provided by the Egyptian market.”

A well-trained and loyal workforce

Economists continually point to the large number of affordable and educated laborers as one of Egypt’s greatest assets. William says he has been able to rely on highly-skilled workers, some of whom have over 20 years’ experience making furniture.  

“They have gold in their hands” he adds. 

At the Williams factory, workers receive bonuses proportional to their productivity.  If factory production is high, workers can make considerably more money than at other factories, William says.

It’s a system that William claims has inspired loyalty and kept workers happy throughout the past year of unrest and labor protests.

“Here, workers were actually defending the factory with weapons so that they could continue working,” he says.

The company also tries to hire Egyptian designers and engineers straight out of local universities.

Many young graduates face problems penetrating the labor market and earning decent salaries. By hiring them, William says the company is not only making use of the pool of highly-qualified, motivated and relatively cheap labor, but also gains fresh insight and design ideas.

Bishoy Ghaly is one such engineer. An architecture graduate, he uses 3D imaging programs to test newly-designed furniture concepts.

Though the job may not be a perfect match for an architecture graduate, Ghaly says he appreciates the “familial atmosphere” and the “human size” of Williams. The good salary, he adds, is another incentive for him to stay.

Domestic-made quality

William’s business model is based on a high standard of quality for his products and  customers receive a lifetime guarantee on all furniture.

Another way the company has cut costs has been by doing away with a sales and marketing team, instead, William said, allowing the products’ quality to speak for itself.

The company has also benefited from recent changes in the value of Egyptian currency. The Central Bank has so far avoided resorting to a blunt devaluation of the Egyptian Pound, but the Egyptian currency has nevertheless recently reached a historical low point since 2004, as a US dollar is now worth more than six pounds.

The devaluation makes imports more expensive for Egyptians and domestic products relatively cheaper.

“Not only do they have to pay a higher price for imported products, but customs duties make the difference even sharper,” William says.

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