“The margins are shrinking. Everyone is worried,” said Farida Khamis, vice president for corporate finance at Oriental Weavers. “Our fear is global spending will shrink more and more.” Cheap labor and tax breaks have helped Oriental Weavers endure the downturn even as four of its main competitors, including companies in Turkey and Belgium, have gone bankrupt since January. Open markets and globalization are being squeezed by national interests, which can mean bad tidings for poor, labor-intensive nations such as Egypt, a major textile exporter for decades…The pressure was articulated by Mohamed Qassem, chairman of World Trading com., a textile corporation based in Cairo, who recently pressed Egypt for more help to deal with a protectionist mood in India, where the government has cut interest rates and is investing $4 billion in textile and garment industries. Similar pleas have echoed across other developing countries, which have emphasized to the Obama administration the need for free trade to reverse the United States’ economic fortunes. ..It’s been a sobering time amid the whoosh-click of the looms and thick spools of wool from New Zealand and Libya. Oriental Weavers, a family-controlled company that supplies IKEA and had a contract to carpet the Hard Rock Cafe in Las Vegas, watched exports drop to 60% of its total sales in 2008 from 67% in 2007. To compensate, it increased sales at home by targeting resorts and the upper-middle-class suburbs burgeoning outside Cairo; it recently announced price cuts of as much as 15% to improve its hand in the U.S. …..
Date:3/22/2009
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