Ceramic production companies have deemed it necessary to raise their prices in the coming period following the flotation of the Egyptian pound and its devaluation, besides the increased cost of production inputs, including gas, electricity, and fuel.
During the eighth International Ceramic and Sanitaryware Exhibition (ICS), held between 9 and 12 November, surveyed ceramic manufacturers all agreed on the necessity of raising the price to match the quality of Egyptian ceramics—some of the finest in the world.
Royal Ceramica expects production costs to rise by 25% in the coming period, driven by the rising cost of fuel and the flotation of the pound, said Tarek Sadek, director general of Royal Ceramica. However, he noted that the latter contributed to increasing the competitiveness of Egyptian ceramics.
He pointed out that the rise in fuel prices have impacted the company’s ability to export. The company targets to increase production by 60% in the first quarter of 2017.
Royal Ceramica is expected to open a new factory with a capacity of 30,000 metres of ceramics per day at a cost of EGP 300m, which would put the sheer capacity of the company at 85,000 metres per day.
Moreover, he noted that the company exports 40% of its total production to 25 countries worldwide. Yet, exports have declined by 30%, according to Sadek. He added that the government should lower gas prices so that factories can compete abroad again.
The cost of production is expected to increase by 40% within days, on the back of the increased fuel prices and the devaluation of the pound, said marketing manager at Remas Ceramic Mahmoud Soliman.
He pointed out that his company raised its prices by 10-15%, which may have caused a recession in the market, leaving exports as the sole option for manufacturers.
Soliman noted that the company exports 40-45% of its production to Arab and African countries.
Sherif Mostafa, marketing manager of Ceramica Venezia, also highlighted the market slump, saying sales declined by 30%.
Wagih Hunter Bissada, CEO of Ceramica Alfa, said his factories’ products will have increased by 25% by 2017 due to the rising cost of fuel and the devaluation of the pound, noting that his company relies on imported inputs, including production machines and spare parts.
He pointed out that the application of the value-added tax affected the pricing by only 3%, which is non-comparable to the impact of the devaluation and the increasing of fuel prices.