One of the world’s largest carpet manufacturers, Oriental Weavers Group was founded in 1979 by industrialist and entrepreneur Mohammed Farid Khamis. The company’s Supply Chain Director, Tarek Shedid, has been working for the company for just over a year and, in this time, has implemented a centralised system for procurement, planning and warehousing, as well as moving some previously outsourced operations in house. This vertical integration helps to reduce costs by allowing economies of scale and ensuring the company is in control of both production and distribution. Shedid says: “Our strategy is to transform to a secure supply chain model and this will include three levels: content, technology and culture. We have central corporate procurement for the group and we have central logistics for the group, which includes shipping, customs clearance and taxation. By the end of this year, we will have covered the whole activity over the group.”
Oriental Weavers produces three grades (A, B and C) of machine woven carpets and rugs for the market, and it also operates as OW Hospitality, which produces woven broadloom products, with offices in London and the American cities of Dalton, New York and Las Vegas. In 2014, the company produced 113 million square meters of carpet and rugs, which equals 5.7 billion Egyptian Pounds, a three percent increase on 2013. Shedid speaks fluent Arabic, English and French – he studied for an MBA in France and has previously worked in the UK – and languages are incredibly useful as Oriental Weavers operates on a global stage, with facilities in China and the USA, as well as Egypt (95% of production takes place in Egypt).
Shedid explains that the company uses cost efficiency, technology and innovation to deliver growth. “A flexible production capacity that can respond to market conditions exists across all price points,” he adds. With products to suit every budget, Oriental Weavers ensures it is successful across different sectors.
Part of its flexibility is achieved by having some of the biggest factories in the world and a fully integrated production line, capable of exporting to around 130 countries worldwide. Oriental Weavers had traditionally imported polypropylene, a raw material from the Gulf, as well as China and Korea, and Shedid believes that moving away from this is crucial, so that any issues in these areas will not affect production. It now operates a complete production process — from producing polypropylene granules as raw material for synthetic fibres, to spinning and dyeing yarn. And then weaving, finishing, packing, delivering and distributing the products through its domestic and international distribution facilities and retail outlets.
Shedid also talks about the importance of amending the corporate structure of the company. “Oriental Weavers is currently changing so it can adapt to the markets. For example, we now have to think outside of the box to innovate and keep our position as market leader.”
Examples of such innovation in order to meet the company’s 2020 objectives include being the first in the world to develop four million-points-per-square-metre technology and an automated carpet warehouse – the only one of its kind in existence. Oriental Weavers exports approximately 55% of its production through a distribution network that includes offices in the United Kingdom, Egypt and the United States. Distribution and warehousing centers in Egypt, the USA, UK and Canada offer direct access to the largest markets in the world.
Sustaining such a global business is a challenge, as Shedid explains: “It is not easy because the market is very dynamic and the competition is very aggressive. We have a lot of challenges, especially in Egypt, such as the foreign currency shortage. But Oriental Weavers is able to withstand this given our international exposure. As for the energy shortage in Egypt, we did not suffer from this due to our diversified supplier base of the oil-based raw materials.”
As a result of the restructuring, Oriental Weavers has been working closely with a consultancy which can give an impartial view. Shedid adds: “This has helped us to have the right direction for the coming 20 years, but we needed someone with a helicopter view to give us this clear direction.” The direction Shedid talks of includes its focus on ensuring it has a world-class workforce. Shedid himself has been working with HR to develop a training programme to make the most of its 17,000 staff and allow talent to be developed from within. He adds: “We have the best salary structure, as well a bonus scheme, a retention policy and an end of service policy. All of that is designed to create loyalty for the group, a group family.”
Box-out: Product range
Oriental Weavers produces three grades (A, B and C) of machine woven carpets and rugs for the market, and is one of the largest producers of machine-woven carpets in the world.
A leading Egyptian exporter, MAC Carpet is Oriental Weavers’ wall-to-wall tufted carpeting product, delivered to more than 107 countries.
Egyptian Fibers Company (EFCO) is the group’s manufacturer of non-woven felt and is one of the leading non-woven carpet manufacturers in the world, currently exporting production to more than 67 countries worldwide.