Egypt’s Ramadan still has a Chinese flavour

An April decree bans importing imitations of traditional Egyptian handicrafts, including Ramadan lanterns. But is it enough to revive local handicraft businesses?

Lamia Hassan, Tuesday 9 Jun 2015 (Ahram Online)

unnamed2Islamic Cairo’s Khan El Khalili market is crammed with shoppers buying the goods they need for the Islamic fasting month of Ramadan. From its entrance on Azhar Street to its smallest alley, the neighbourhood is brimming with people, mostly locals, examining the products displayed in shops and on the side of the street.

As Ramadan approaches, the season’s colourful lanterns have just made a comeback around the market, starting from the tiny LE 5 lanterns to the bigger ones selling for hundreds of Egyptian pounds.

Known to be the hallmark of unique Egyptian products, Khan El Khalili and its surrounding streets have long bustled with shoppers from all over Egypt and the rest of the world. With its handmade copper plates, cushions, clothes, alabaster, jewelry, lanterns and even chandeliers, Khan El Khalili caters to all different tastes.

But, while the products cramming the market have remained the same for years, their origin has recently changed.

Especially when it comes to Ramadan lanterns, Pharaonic-themed souvenirs and jewelry, cheaper Chinese imports now outweigh local products.

“People used to come from all over to buy the finest goods made by Egyptians, but then the cheap [imported] products took over the market,” says Hassan Mohamed, the owner of a small workshop in El Darb El Ahmar that makes engraved copper plates.

Chinese products started appearing in the market 10 to 12 years ago, says Amr Abdallah from Awlad Ezzat (Ezzat’s Sons), one of the big lantern shops on Al Azhar Street.

“Chinese products weren’t very popular when they first appeared, but over the years more shops started importing and replacing their local products,” says Abdallah.

When the Chinese Ramadan lanterns became popular, Abdallah himself started importing them, he says.

But five or seven years ago, he changed his mind.

“I decided that it was time to stop buying imported lanterns and to support local business,” he says.

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Ban on imported imitations

Amid concerns about foreign imports putting local craftsmen out of busines, Egyptian Minister of Trade and Industry Moneer Fakhry Abdel Nour in April announced an import ban on all imitations of Egypt’s traditional handicrafts, as a move to protect Egyptian identity and intellectual property rights.

The ban comes as an application of Article 20 of the 1994 international General Agreement on Tariffs and Trade (GATT) which gives any country the right to take the necessary measures to protect its “national treasures of artistic, historic or archaeological value.”

“It’s our right to protect our intellectual property and our identity and to take the necessary measures to do so, and all the countries do the same,” says Yasser Gaber Shaker, the Ministry of Trade and Industry’s spokesperson.

The ban includes Ramadan lanterns and Pharaonic-themed souvenirs such as papyrus.

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But it remains unclear to what extent the ban will help to revive local handicraft production and sales.

While the ministry says the decree has already been implemented, some vendors claim that they have not yet seen a clear document detailing its terms. Most salesmen have already placed their orders for the season, they add.

Ministry spokesperson Shaker however claims that importers have spread a rumour that the ban has been postponed so that they can continue to sell their imported products.

Preserving crafts from the past

Not far away from Khan El Khalili and Al Azhar, Taht El-Raba’a, the production house behind many of the market’s lantern shops, is all geared up for Ramadan.

Unlike the other shop owners, Abdel Aziz Hashim hangs only the old-fashioned tinted glass lanterns outside his shop.

“For me, these are the only lanterns I know,” he explains. “Everything else they added or brought in from China has nothing to do with Ramadan.”

But over the last decade, plastic lanterns from China have flooded the Egypt market.

“Try asking kids who are born in the past 10 years about the traditional lanterns,” echoes Salama Hanafy, whose family has run a lantern making business from a tiny room in the neighbourhood for over 50 years. “They will know nothing about them.”

Although both Hashim and Hanafy welcome the new ban, they say that its implementation will be difficult.

Importers might already have enough imported goods in storage for the next year or even two, says Hashim.

And traditional lanterns will remain more expensive due to a rise in the cost of the materials needed to make them, says Hanafy: “We used to buy the glass for the lanterns for LE0.60 a kilo, but now it’s LE 3, which will definitely increase the cost of a lantern.”

Emphasising quality

But Hisham Raslan, another Khan El Khalili shop owner, relates the recent shift to Chinese products to a decline in the quality and creativity of local work.

“One of the reasons we have always depended on local handicrafts is for their quality, but when this started deteriorating and the Chinese manufacturers started to coming up with ideas for new products, we started to depend heavily on Chinese products,” he says.

Raslan, who is against the ban on imports, says that the products imported from China are different to those produced locally.

For example, Chinese manufacturers have innovated with pens covered with images of Pharoahs, Pyramids and Ancient Egyptian statues, he says.

The new decree is a positive step in the right direction, but more efforts are needed to revive local handicraft industries, says anthropologist Nawal El Messiri, who has worked on reviving local traditional craft industries for years at the Egyptian Folk Traditions Society.

The government and concerned organisations should raise awareness among manufacturers on the importance of quality for business growth, she says.

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“When manufacturers understand that people will stop buying their lanterns if they continue to make them with sharp edges or in poor quality, they automatically put more effort into what they make,” says El Messiri.

When tinsel embroidery from Upper Egypt was in danger of disappearing, her organisation helped to train local youth to master the technique and managed to sell their products outside Egypt, she says.

Beyond traditional handicrafts and Ramadan items, the government could also help to protect other local craft industries from foreign competition, she adds.

“Some of the best local furniture comes from Damietta, but many similar items are also imported,” she says. “There should be bans on all of these.”

For his part, Shaker stresses that the trade ministry supports local craft businesses with more than just the April ban on imports.

“We are working with 39 small and medium industries in 17 governorates across Egypt to help them develop their business and up their standards to revive the local industries,” he says.

As Ramadan approaches, Hashim says he wishes to one day see all shops only selling local tinted glass lanterns like his, although this is unlikely to be soon.

“We have been wishing for a decree like this for years, and it’s about time we use our dollar reserves to buy only the essential items that we cannot produce, and instead depend heavily on local businesses,” he says.

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Hanging by a Thread

photo credit: Première Vision (website)

Liberalization unravels one of Egypt’s prized local industries

(Business Today Egypt, April 2010)

The showroom of El-Hosseiny textiles in the Delta town of Salmone El-Omash is one large open space.

The walls are lined with sun-bleached mannequins, their features covered in a thick layer of dust. The room is packed with overflowing boxes of brightly colored garments, leftovers from last season.

And there isn’t a customer in sight, despite the fact that it’s past noon and El-Hosseiny is one of the few stores open in Salmone, long-renowned as the country’s premier locale to buy wool clothes.

“The place never used to be like this. It used to be packed with people all the time, and we used to make LE 3,000–4,000 in profit per day,” says Ahmed El-Hosseiny, who runs the store and a textile factory in neighboring Mansoura.

“But every year it gets worse. One day we make LE 50, and another day we make nothing.”

At this time of year El-Hosseiny, like many of Salmone’s other 40,000 residents, should be brainstorming new ideas for the coming season. But with last year’s clothes gathering dust, producing a new line is more than futile — it’s a guaranteed loss.

In 2008, Salmone’s factory owners sold roughly 50% of their manufacturing quota. In 2009, that number dropped to 25%.

Salmone El-Omash was once a major hub of textile production and clothes making. Part of its name, El-Omash, literally translates to textiles. But in recent years the town’s roughly 1,500 workshops and 25 stores have seen business collapse. A lethal combination of the financial crisis, deregulation and an influx of inexpensive imports, especially from China, have leveled the local economy. And just as Hosseiny exemplifies what is happening in his village, Salmone is a microcosm of broader changes taking place throughout the country.

Homespun Industry

Villages usually evoke visions of a simple agrarian life. But Salmone turned that image on its head. For nearly 70 years, residents have been making textiles. Homespun wool workshops predated electricity in the region, and as technology was introduced, manufacturing kept pace. What began in homes evolved into workshops and factories; what sustained a region then supplied a nation.

The residents of what was once known as “Mini Japan” established an industrious reputation. In 1986, President Hosni Mubarak highlighted their contribution to the national economy with a visit to the town.

But today, the spirit is gone. “We don’t wake up before 5pm each day. We all just stay up trying to do anything that would make the night pass, then sleep all day,” says workshop owner Hassan Shafie.

Historically, production season in Salmone spanned 10 months — these days it’s lucky to last four. The inability to turn profits predictably led to decreased wages and large scale layoffs. In a local economy based around a single industry, failure also has social ramifications. Workers have abandoned the village, and desperation has fueled a rising tide of criminal activity and increased tension among neighbors.

“The thefts that are occurring now come from the village residents stealing things from each other,” says El-Hosseiny.

Free Fall

Through much of the 1990S, textile imports were banned by the Egyptian government, which allowed local manufacturers to thrive.

But in search of growth, Egypt joined the World Trade Organization in 1995, setting it on a path of market liberalization.

A series of cuts in tariffs during the last decade leveled the playing field for foreign manufacturers, and by 2007 imports were surging.

At the head of the pack were Chinese manufacturers, who “showered the market with their cheap products,” says Mostafa El-Samouly, the owner of a textile factory in Mahalla and a member of a key industry association.

Even when Salmone manufacturers switched to inexpensive fabrics like acrylic, they could not match the prices of imports.

“In China, they have subsidized fabrics, factories and everything they need to be very productive,” says Mo’awad El-Shafihe, who owns a Salmone plant. “Everything for us is overpriced; taxes are high and we have to pay a lot for water and electricity. I started selling the pieces that were worth LE 26 for only LE 13, and people are still not happy with the prices.”

Factory owners also face high import and port tariffs on foreign-made fabrics.

The combination of those factors has industry players worried that they will never be able to make up the gap with foreign manufacturers.

“Today everything in our life is Chinese and they will keep expanding everywhere until one day […] there won’t be anyone else to compete against them,” says Ahmed Sakr, a Salmone native who has a business in Cairo.

While Salmone and other industrial regions were reeling from a market saturated by international competition, the economic crisis may have put the final nail in the coffin. According to Dr. Amirah El-Haddad, an economics professor at Cairo University, textile production has dropped 25% since fall 2008.

Losing the domestic sales battle in the short term does not always spell the end of an industry. The export market, where Egypt had found success in the past, offered the potential to compensate for losses.

But the lowering of international trade barriers in the middle part of this decade put the country in direct competition with textile powerhouses like China, India, Pakistan, Bangladesh and Indonesia. (In early 2005, just after one major trade barrier was dropped, exports from China and the US doubled.)

Developed countries with highly efficient production facilities made gains in the international marketplace, leaving many Egyptian firms out in the cold.

Dusty Workrooms

The textile sector, which employs about 25% of Egyptian workers, has suffered the brunt of liberalization. But it is not the only domestic industry reeling from Cairo’s embrace of the free market. Former stalwarts like cotton, marble, and auto production have also experienced difficulty adjusting to global competition.

“Unemployment is a huge disaster now in Egypt that should be solved immediately, before it gets even worse,” says El-Samouly. With the government focusing on other aspects of economic recovery — the vast majority of its stimulus dollars have gone towards infrastructure — the textile industry, and the people of Salmone, will likely have to weather the storm on their own.

While business is bad, El-Haddad says a sector-wide recovery is possible

“After the crisis recedes, things are expected to get better,” she says. “If [manufacturers] hang in there for a year or two, they may be able to revive their business.”

Despite the challenges, some Salmone residents remain optimistic.

“We are capable of doing anything that the market requires,” says El-Shafie, the factory owner. “We just need chances. We need fair prices for the fabrics we are using. We need export markets to open. [Then] we will be able to revive the industry.”

Inside the small workshop he shares with brothers Abdo and Mohamed, El-Shafie stares at the floor. Colored threads, half unspooled, spill into a corner and mix with spider webs. Cloth has been left on the machines, and the dust is thick enough to taste. No one has entered the space for at least a month.

“The village is dying and no one cares,” says Mo’awad El-Shafihe. bt

Channeling Success

Ramadan mosalsalat have become a big business, but the financial landscape that surrounds them remains uncertain. By Lamia Hassan

photo credit: Middle East Online

(Business Today Egypt, October 2010)

Renowned TV producer Mohamed Fawzy hedged his bets this Ramadan. He shopped around three mosalsalat (soap operas) — a third season of his show El-Daly, starring Nour El- Sherif, Farah El-Omda (The Mayor’s Wedding) and Ana El-Quds (I Am Jerusalem).

Fawzy rushed to finish the shows in time for the Holy Month, hoping at least one would fetch a hefty return from a network hungry for programming. Unfortunately, other producers had the same idea.

Faced with a glut of new content — 50 mosalsalat aired this year, compared to 38 in 2009 — Fawzy failed to strike a deal and held onto the shows. Such is the uncertain landscape of Ramadan TV. The flowering of satellite stations in the last decade has stoked fierce competition during the Holy Month, upending the business models that have dominated Egyptian broadcasting for decades.

While a full third of annual advertising revenues are generated during the month, industry insiders say profit models remain uncertain. Series are becoming increasingly expensive, production timelines have been sped up and the plethora of shows mean producers aren’t guaranteed a sale.

“I don’t think the next year or the following years will see as [many series],” says producer Gamal Al-Adl of Al-Adl Group, one of the biggest studios in the country.

Talk show host and media commentator Moataz El Demerdash also questions whether viewers have the appetite for that much Ramadan fare.

“Instead of just producing a large number [of mosalsalat], we have to study this market from A-Z as a whole and examine closely the profits coming out of it. [We need] to see what the market can tolerate.”

A Shifting Market

Ramadan mosalsalat have been a staple for more than 20 years, with millions of viewers tuning in after iftar.

photo credit: Ismailia Online

Channels 1 and 2 used to be the mainstays for series. But expanding local and satellite television markets mean more channels are competing for viewers.

The focus now is less on mosalsalat as a cultural tradition and more as revenue stream. Since the recent makeover of the Nile Television Network (NTN), the Nile Drama channel has been dedicated to serials. Increased content prompted executives to launch the Drama 2 channel this Ramadan. And there’s still spillover. Mosalsalat have also begun appearing on NTN’s Nile Comedy and Nile Life.

Other companies have joined the competition over the last two years, including Panorama Drama 1 and 2, Cairo Drama, Melody Drama 1 and 2. Arab Radio and Television has also begun airing the shows on its three channels Hekayat, Hekayat Kaman and Hekayat Zaman.

“The reason behind the rise of all these [shows] is that mosalsalat have become a large part of the ‘advertising revenue cake’,” says Al-Adl. He estimates that advertisers in Egypt and the Gulf spend a combined LE 1.3 billion during Ramadan. According to estimates in the press, the production budget of the 50 Ramadan serials that aired this year was LE 750 million.

The push for content has also driven producers to cut corners, says Hisham El-Awamry, the manager of Hekayat.

“Some producers film during the day and deliver the tape right before air time.” One episode of the series Al- Hara (The Alley) was only 30 minutes long, falling short of the 45 to 50 minute range typical of episodes.

El-Awamry says things like that happen because production companies are churning out several projects at the same time. “They bet on one big project, and produce one or two other series as well, at a lower quality.”

The frantic environment leads to wheeling and dealing behind the scenes. According to El-Awamry, each channel discusses different deals with production companies about when to air series.

“There are different categories that come with the deals between the production companies and the channels,” says El-Awamry.

“Some channels gets exclusive airing of the series, while others get first-run rights, and others have to wait for the second run, after Ramadan.”

Despite the kinks, producers are bullish about the Ramadan market.

“Not only the stars, like Yousra and Nour El-Sherif, attract advertisers, but all those who are involved in the process are considered stars as well,” says Al-Adl.

“Even if the series are not depending on big actors and actresses, a big production company, or the series’ director encourages the advertisers to air their ads during the series.” bt

Getting Back to Business

Downtown shops and restaurants managed their businesses in coping with the post-revolution state of affairs. By Lamia Hassan

(Business Today Egypt, April 2011)

On weekday mornings, Cairo’s streets are bustling with people going about their business, shopping or just hanging out. Cars are everywhere, and so are pedestrians crisscrossing the streets and ambling along sidewalks. Likeusual, the downtown area is buzzing with people just two months after the revolution that saw former President Hosni Mubarak step down. Although the streets might make one think things are back to normal after weeks of protests in Tahrir Square, it’s not business as usual for shops in the area and the square’s surrounding streets. Many outlets in Tahrir are still closed after being looted, burned, vandalized and taken over by protesters for almost a month, while others simply shut their doors because of the protests themselves. Several shops along streets nearby such as Mohamed Mahmoud, Bab El-Louq and Talaat Harb have also closed their doors — some for good.

But there are a few exceptions to the rule who stuck the revolution out and even benefited from remaining open during the turbulent times. With things still up in the air for some businesses, residents and shop owners wonder whether the downtown core will bounce back better than ever or fall into disrepair. Experts, however, say that businesses can help jump-start the process by taking advantage of the new sense of pride Egyptians are experiencing.

State your business

Walking on Bustan Street, right next to Talaat Harb Street, it’s hard to miss the huge pink building with the sign ‘Al Bustan.’ Some know the building as home to the famous electronics and computer mall. It is also one of the biggest garages in the area. It has nine levels of parking and has become a spot that residents, workers and shoppers park in every day, although it is also one of the most expensive lots in the area at LE 4 per hour.

Just months after Mubarak left, the parking lots were filled with vehicles, although some were covered, indicating that they may have been parked there for a long time. But the busy influx of vehicles constantly heading in and out of the garageshow business in the area seems to be returning to normal. That can’t be said for the computer mall itself, which is emptier than usual.

“We actually never closed down Bustan from ‘day one’ during the revolution and up until today,” says Hanan Ahmed, a security department employee in the mall’s administrative offices. “The parking [garage] was open, but we were given orders not to let people in the mall for security reasons, but anyway, there were almost no cars at all coming in the mall because the area around was closed and was not safe.”

While the parking lot wasn’t affected by looting or vandalism and was able to open its doors quickly, the owners of the computer shops were still worried about their businesses and many ended up staying closed long after the revolution ended on February 11.

“Two days after the revolution started, most of the owners came and moved all their goods away from the area, and those  who were unable to transfer their stuff early, decided to just come and sit here every day to guard their [businesses],” says Ahmed.

Other than malls and parking areas, almost every street around Tahrir Square dozens of clinical practice, from optometristsand dentists to surgeons. Most doctors here say they were unable to open their clinics to work for weeks, if not months, because even if they could get to their clinics during the revolution and subsequent protests, their patientswere unwilling to take the risk. Dr. Akram Azzam, an orthopedic doctor and professor at Qasr El-Aini Medical School, closed his clinic for almost a month. Azzam’s clinic is located on Bab El-Louq Street, walking distance from both Tahrir Square and the Ministry of Interior, both of which saw a great deal of activity during and after the revolution and subsequent protests.

“It was impossible for me to resume work for a really long time, as I actually work there at night and with the curfew neither would I be able to do this, nor would people be able to be there at night or even make it there with all the streets are closed,” says Azzam. “And even until now, months after […] the revolution, it is still not the same.”

And he is not alone. Many doctors agree, especially those with clinics on streets closest to Tahrir.

In charge of changing times

Decades ago, Downtown Cairo was one of the most popular and trendy areas in the city. People would visit to get the best that Cairo had to offer, from clothes to restaurants and much more. In recent years, although the area is still busy with people, most stores now cater to lower-income shoppers who flock to the area in droves for its cheap goods.

This has changed in the wake of the revolution. The shops are stringing banners and signs announcing discounts up to 70%, with others touting slogans like: “The people want to breakdown and destroy all prices.” Nonetheless, consumers have remained wary of spending in the wake of the revolution, leaving these stores virtually empty.

On Talaat Harb Street, the Nour El-Ain clothing shop is deserted and has only one employee working. A few of the stores next door are closed, others are deserted as well.

“Things never got back to normal for me or for any of the shops around the area, even if you see that the streets are busy outside,” says Sobhy Farouk, Nour El-Ain’s manager. “As you can see, we all have sales and still people are not really back and shopping.”

Groppi, one of the country’s oldest cafés and bakeries, used to be a favorite hangout for Cairenes and remains a symbol of Downtown Cairo’s glamorous past. Now, only two tables are occupied, a trend that the restaurant is seeing all too much.

“We closed down for more than 28 days, but we didn’t get customers back again,” says Gamal Azmy, the manager. “As you can see, there is almost no one here and I don’t think that things will be in better shape around the area anytime soon.”

From Al-Sharq Al-Awsat Newspaper

Businesses believe in booms

While the majority of businesses in the area closed down during the revolution, there were also some that enjoyed a boom, especially food stalls selling Egyptian classics like koshary and falafel. One of the most successful was the popular sandwich restaurant Felfela. The small shop always has a line of people in front of its Talaat Harb Street takeaway, waiting patiently for their sandwiches. The falafel and fuul sandwiches only sell for between LE 1–2, but with thousands and sometimes more than one million people in Tahrir, Felfela raked in the cash.

“Our takeaway outlet was doing a reat job,” says Madgy Farag, a Felfela employee. “You could see people lined in front of [our shop] to get their sandwiches during the revolution, while on the other hand, our restaurant, which is located on the neighboring Huda Shaarawi Street, was closed for a really long time, as we usually depend heavily on tourists.”

According to Tarek Selim, associate professor of economics at the American University in Cairo and faculty affiliate to Harvard Business School, the lower volume of sales most businesses near Tahrir are experiencing is normal after turmoil.

He predicts the situation will get better as the country becomes more stable.

“In every business, you have to study the short run versus the long run,” he says. “In the short run, which is about six months until the elections are over, there will be instability, uncertainty and losses as people are still concerned about the security [measures] there, especially with strikes. But in economics, we call this the ‘funk condition.’ This funk condition means that the future has to be brighter.”

Selim says businesses should start planning for the future and do their best to attract business back using Egypt’s newly rediscovered patriotism as a starting point.

“Clothes shops should focus more on [selling] pure Egyptian products, […] products related to the revolution and things that could be interesting for both the locals and the tourists,” says Selim. “And for restaurants, they should change their Western designs and add a local flavor. Maybe put up photos from the revolution as well as having more commercial Egyptian food.”

Thinking long term, could political stability ensure a new beginning for Downtown businesses?

“I would say that there will be a very high demand in these businesses in a year, and it will be a touristic area,” says Selim”When the revolution collects its fruits, things will definitely change in Downtown, and it will become popular again.”

But until then, businesses in the vicinity of Tahrir Square will just have to patiently wait, a difficult choice considering they must continue to pay salaries and rent. bt