One of the world’s largest carpet manufacturers, Oriental Weavers Carpet, has announced that it plans to liquidate and offload its Chinese manufacturing facilities, Oriental Weavers (Tianjin) Company Limited (Oriental Weavers China), to investors in the country.
Oriental Weavers China is the Chinese operating subsidiary of Oriental Weavers, the world’s largest manufacturer of machine-made carpets, with production facilities in three countries.
The Egypt-based carpet manufacturer distributes products across about 150 countries worldwide under the leadership of members of the family of Mohammed Farid Khamis, the Egyptian industrialist and entrepreneur who founded the leading carpet maker in 1979.
According to a filing sent to the Egyptian Stock Exchange, the Egypt-based group has authorized the executive management to conduct a study and make a decision on whether to sell or liquidate Oriental Weavers China.
The move is a strategic decision to clamp down on risk and uncertainty arising from its operating environment due to its exposure in the Chinese market as the leading carpet maker embarks on strategies that will optimize its earnings and revenues in the long term.
Experts believe the decision will play a key role in reducing operating costs as it seeks to cut ties with the Asian economy due to brewing regulatory tensions in China and the intensification of trade friction between the United States and China.
Despite tensions in its operating environment, its Chinese operations reported a 186.6-percent increase from EGP6.8 million ($432,135) in the first nine months of 2020 to EGP19.4 million ($1.23 million) in the corresponding period of 2021.
The revenue growth from the Chinese and Russian markets beats the increase in other market segments during the period under review.
As of press time, Nov. 8, shares in the leading carpet maker were trading at EGP8.5 ($0.5402), 107-basis points higher than its opening price on the Egyptian Stock Exchange this morning.
At the current price, the company’s market capitalization is EGP5.65 billion ($358.9 million), while the market value of the Khamis family stake is EGP3.2 billion ($203.4 million).
The family holds a joint 56.6-percent majority stake in the company, with Farida Khamis, Yasmine Khamis, Milo Slava Khamis and Amir Khamis holding leadership roles in the family business.