2021 / 5 / 2
1- Define the purpose of the LEA:
The furniture industry involves a number of stages of production including cutting wood, carpentry, veneer paste, drilling, paint, polishing, upholstery and assembly. It also involves supporting industries such as glass industry, marble industry, metal accessories and others. Although the industry faces fierce competition in the foreign markets in neighboring countries, the furniture industry presents huge potentials for the near future. China is the most competitive competitor to Egypt s furniture exports in the Arab markets, followed by Turkey and Italy.
The manufacture of wood furniture is a handicraft that depend on the innovation and creativity of the work
The information on the Successive decline in exports of wooden furniture produced in Damietta governorate was a clue to highlight the problem
Therefore, the LEA will be identifying the strengths and weakness of the furniture industry in Damietta – a province located on the Mediterranean Sea in the northeast of Egypt.
• What are the most important issues and questions that the LEA will seek to answer? (E.g. to identify the economy’s strengths´-or-its competitive advantage´-or-its challenges´-or-focus on a specific sector…)
The LEA will be focusing on one sector in particular: the wooden furniture sector
We can therefore ask several questions: is it a sector with potential in the Northeast of Egypt? Does it present employment opportunities? What are its strengths and weaknesses? Etc.
The government of Egypt has recently built New Furniture City in Damietta governorate - an integrated city specializing in the furniture industry and all related crafts, small and medium industries, feeder and complementary industries, as well as a commercial marketing area and a technology center with a total of 54 hangars and 1,348 furniture manufacturing workshops.
Therefore, our project based on a scientific study conducted by Agricultural Research Center , Horticultural Research Institute - Department of Wood Trees and Forests to break the bottleneck in the beginning of Local Value Chain Analysis-;- namely the stage of importing timber as major input for the wooden furniture industry in Damietta governorate and provide local inputs instead. It means that overcoming deficiencies at the beginning of the production process.
• The project
Planting wood-producing tree forests using treated wastewater, which estimated amounts to about 4.3 billion cubic meters per year in the cultivation of wood trees in the Damietta back desert instead of going to water bodies either in the Nile river´-or-the Mediterranean sea´-or-seeping into groundwater, which harms agriculture, fisheries, animals and humans.
Cotton wood and rice straw can also be used after experiments and processing to be an alternative to wooden panels such as wooden counter and Medium-density fiberboard (MDF), Artificial substances like Acrylic, and Polyvinyl chloride PVC which is used in wardrobes, wheels and flats.
The objectives of the project are:
-;- Production of timber locally
-;- Saving -$-1.5 billion a year, Egypt total import of timber.
-;- Safe disposal of sewage and its risks
-;- Wood trees have the ability to absorb heavy elements in treated wastewater, and hence improving the environmental conditions of the province by calming the climate, which is characterized by dry hot.
The proposed wooden trees to be cultivated are:
-;- African mahogany trees-;- a-limit-ed number of mahogany tree seeds have been brought in and are collected at the Horticultural Research Institute producing good wood capable of resisting wood-eating termites
-;- Pine trees
-;- Poplar trees, which has grown in Egypt in just eight years and is used to produce ablakach wood , crust and manufactured panels such as medium-density fiberboard (MDF)
-;- Willow oak trees
-;- Lemon eucalyptus trees
-;- Giant Taxodium tree which is capable of withstanding high ground water ratios and thus the possibility of using it to dry wastewater swamps.
-;- Cypress trees that can be used as wind bumpers.
-;- Saddle wood used in handicrafts.
-;- Planting eucalyptus and Casuarina trees, which provide high quality wood matching imported timber and can be provided to Egyptian manufacturers at lower prices
Many of These wooden trees are fast growing and produce large wooden blocks of high quality, straight and extended textures, allowing them to be used in wood industries and suit the needs of timber manufacturers.
2. Data identification and collection
• What information is the most relevant to your locality’s economy?
The most relevant information to be gathered to evaluate the project are the number of job opportunities, the proposed cultivated area of trees, the quantities of treaded sewage water needed, the life cycle of each species of the proposed trees, the amount of available finance and sources of finance, the areas of land allocated to the investors to begin cultivating the trees, etc.
• What type of data is already available nationally´-or-locally (think of the economic structure, local endowments, human capital, institutions…)?
This particular sector has recently downed due to the severe economic crisis followed the Covid 19 epidemic and the inability to import wooden products and to find imported products at reasonable prices. As a response several entrepreneurs started their new businesses of selling specifically wooden products at higher prices. The data regarding cultivating various types of trees are available at Horticulture Research Institutes-;- they have also successful experiments of using some seeds to cultivate a sample of land area. The data of treated sewage wastewater - which is estimated to be 5.3 billion cubic meters annually- and its distribution over the country is available at Ministry of Irrigation and Water Resources.
On the other hand, data on the number of wood-producing workshops, either small and medium enterprises´-or-large-scale projects are available. The estimated investments needed to the project and job creation capabilities are also available. The quantity and value of imported timber and sources of imports are also easy to access.
• What data is not available and needs to be collected?
The data need to be collected and is not full available are the local endowment of the timber , human capital skills and local and export production of the SME,s working in the informal sectors , the labor distribution in the informal sector and tax paid by these SME,s .
• Which stakeholders will be involved in the data collection process?
In this case, municipalities´-or--union- of municipalities of the North area might be involved as the local authority in addition to international development agencies that might also have an interest in such data. Another stakeholders like (Board of -dir-ectors of the Investors Association of the province of Damietta, men of the wood furniture industry in Damietta, some exporters of wooden furniture, importers of raw materials, local representatives, NGOs, finance institutions, Micro, Small & Medium Enterprise Development Agency, Industrial Development Authority, Representatives of the ad-hoc Committee of Industrial Development - Egypt Strategy 2030 and Chamber of Timber Industry.
• What methods will you use to collect the data? Think about what data collection method(s) best suit your data needs and your local capacity.
- Secondary sources such as published and unpublished sources, press investigations, articles, reports and related previous studies.
- Preliminary sources such as personal interviews´-or-a survey with the relevant stakeholders (Board of -dir-ectors of the Investors Association of the province of Damietta, men of the wood furniture industry in Damietta, some exporters of wooden furniture, importers of raw materials, local representatives, NGOs, finance institutions, Micro, Small & Medium Enterprise Development Agency, Industrial Development Authority, Representatives of the ad-hoc Committee of Industrial Development - Egypt Strategy 2030 and Chamber of Timber Industry.
3. Data analysis
• Which data analysis method responds best to your goal?
The Local Value Chain is used in this case since we will be focusing on one sector in particular in a specific area. The data collection will be focused on the mapping out of the value chain to determine the bottlenecks in the value chain to study the deficiency in some major stages of production. For example, the proposed project underscored a deficiency in the beginning of the production stage-;- namely the timber imported. It is of great value to study other bottlenecks in other stages of production. However, a SWOT analysis is also used for determining the most important areas to focus on the Strengths, Weaknesses, Opportunities and Threats (SWOT) of the local wooden furniture industry in Damietta governorate.
• Which stakeholders need to be involved in the analysis phase?
Several stakeholders need to be involved, such as: Municipalities, -union- of Municipalities, syndicates (if applicable), and international development agencies. Board of -dir-ectors of the Investors Association of the province of Damietta, men of the wood furniture industry in Damietta, some exporters of wooden furniture, importers of raw materials, local representatives, NGOs, finance institutions, Micro, Small & Medium Enterprise Development Agency, Industrial Development Authority, Representatives of the ad-hoc Committee of Industrial Development - Egypt Strategy 2030 and Chamber of Timber Industry.
For the analysis face the local representative and committee member for local development are involved to study the strength and weakness of the issue as follows:
-;- The furniture profession in Damietta depends on inheritance and the good reputation inherited over many years of experiences which can be referred to as a goodwill acquired as intangible assets associated with excellent reputation, brand recognition and customer base.
-;- Damietta enjoys a civilized and professional heritage in the wood furniture industry that surpasses all furniture makers in the world, and has a long-standing furniture industry.
-;- Damietta governorate has more than 35,000 SME,s for the manufacture of wooden furniture representing 80% of total export production of Damietta, in addition to some medium and large factories scattered in all cities in the province.
-;- Damietta governorate produces nearly two-thirds of the production of wood furniture in Egypt with high quality and classy that goes hand in hand with the latest international designs.
-;- About 500,000 workers from Damietta province and from neighboring provinces, as well as auxiliary industrial and commercial activities work in this craft.
-;- The absence of a non-profit furniture service -union- like the rest of the -union-s that serve different professions and provide services to their members and call for their rights.
-;- The -dir-ection of the state towards furnishing government agencies by contracting with major companies and exhibitions and not allowing for small workshops
-;- Increasing the proportion of foreign component in the industry, which raises prices and even leads to the monopoly of large importers in imports of raw materials from timber such as beech wood, and ablacash wood, and the absence of a stock exchange for timber prices determines prices accurately and objectively away from the exploitation of some large importers of these materials.
-;- The absence of up-to-date designs and the tendency to imitate and simulate what others produce.
-;- The furniture manufacturing market lacks of feeder industries like accessories, iron, ablacash wood, sandpaper, glue, nails and glass to reduce dependence on the import of these materials
-;- The spread of the Computer Numerical Control (CNC) machine which is wood engraving machine threats the art of handmade furniture design and decoration. Workers who used to design and cut furniture were considered artists´-or-craftsmen. However, after the spread of CNC machines in Damietta, the craftsmen role became-limit-ed
The figure shows a brief classification of the SWOT
Strength ( S) Weakness ( W )
-;- Global experience in industry.
-;- The people of Damietta loved the furniture and inherited the profession from parents and grandparents.
-;- Capacity to reduce production costs.
-;- The spread of small businesses in homes and at the bottom of residential buildings.
-;- Specialization in the production of certain furniture rooms.
-;- Production flexibility and shorter product cycle.
-;- The good reputation and goodwill of small workshop owners
-;- Weak financial capacity of small workshop owners.
-;- Obsolescence of some manufacturing tools.
-;- Poor handling skills for some modern manufacturing machines (CNC) and preference for patterned manual labor.
-;- Lack of accredited quality control system.
-;- Imitating the production of others and the lack of a brand for each workshop.
-;- Reliance basically on irregular and informal employment.
-;- Lack of modern marketing methods and Relying basically on brokers in marketing
Opportunity ( O ) Threats ( T )
-;- The province s unique geographical location.
-;- State establishment of new furniture city.
-;- Government support for the furniture industry.
-;- Opening new export markets.
-;- Increased demand for wooden furniture as population grows.
-;- The development of furniture industry technology globally.
-;- Proximity to Damietta port and the consequent facilitation of procedures for importing certain materials and exporting the final products.
-;- Foreign competition especially Chinese wooden furniture.
-;- Monopoly of some importers of materials and production supplies.
-;- Bureaucracy, routine in localities and poor logistics support services associated with the furniture industry.
-;- Lack of municipality control over the wooden furniture market.
-;- Lack of a technological institute for the development of designs and products
The establishment of a unified body responsible for afforestation and forests in Damietta province comprising all the entities, stakeholders, expertise and cadres involved in this matter to manage the planning and management of this huge local project