EghtesadOnline: Iran was the world's seventh biggest exporter of textile floorings in 2017, says director general of the Ministry of Industries, Mining and Trade's Textile and Clothing Department, Afsaneh Mehrabi, citing data from the United Nations Industrial Development Organization.
Speaking on the sidelines of the 11th International Floor Covering, Moquette, Machine-Made Carpet and Related Industries Exhibition, also known as "FMCEX 2019", Mehrabi explained that the ranking does not take into account exports of machine-made carpet.
"If included, Iran would be the world’s fifth biggest exporter of textile floorings," she was quoted as saying by IRNA.
She said Iran exported $417 million worth of textile floorings (excluding hand-woven carpets) in the last Iranian year (March 2018-19), Financial Tribune reported.
"FMCEX 2019" was hosted at Tehran’s International Fairground from Sept. 13-16.
“Currently, 870 industrial units are operating in Iran's machine-made carpet industry with a workforce of 25,000,” Mehrabi said.
According to Alireza Haeri, a board member of Iran Textile Specialists Association, machine-made carpets account for half of Iran's textile exports.
The official said Iran exports $700 million worth of textile products annually, $350 million of which pertain to machine-made carpets.
"Last [Iranian] year [March 2018-19], 90 million square meters of machine-made carpets were produced in Iran, of which 60 million square meters were sold domestically,” he said.
The official noted that Iran has the capacity to produce up to 120 million square meters and export $1.5 billion worth of machine-made carpets annually.
Iran's machine-made carpet, moquette and flooring industry depends on imported raw materials and machinery. Producers are dealing with multiple challenges originating both domestically and internationally.
Over 90% of raw materials needed for machine-made carpet production are imported from Turkey, South Korea, Thailand and China.
Speaking to Financial Tribune at the 10th edition of the expo last year, producers referred to shortage of working capital, complications in financial transactions with foreign companies, high taxes and insurance fees as the most pressing issues facing their manufacturing business.
"Most moquette producers are operating below capacity due to lack of raw materials, such as fiber and resin. Profit margins are of the descending order amid market recession and the systemic decline in purchasing power," a producer said.
With petrochemical companies mostly inclined toward export, amid the weakening national currency, local manufacturers are being deprived of the main raw material produced inside the country.
The rial has lost more than 70% of its value last year and part of the losses have been recuperated in recent months.
"Increased costs have also pushed up end prices, much to our disadvantage," he said.
Another producer told us that access to raw materials and foreign equipment in the machine-made carpet industry has become almost impossible, pushing many companies on the verge of bankruptcy.
"Many companies are unable [some say unwilling] to clear their goods from the customs due to foreign currency issues," he said, referring to a litany of problems facing importers as a result of the steep increase in foreign currency rates.
Customs terminals in Iran have been grappling with a growing number of imported shipments piling up at points of entry, as companies are unable to clear their goods.
A representative of another producer at the exhibition referred to the quality of Iranian carpets and diversity of designs as the main competitive advantage in global markets.
"Even Turkish producers, who enjoy full government support, have not been able to compete with Iranian carpets in terms of quality and design."
Kashan is the machine-made carpet production hub of Iran.
The ancient city in Isfahan Province is home to over 1,800 carpet factories.
Tehran, Isfahan and Yazd are the production hubs of floorings in Iran.
World Renowned Handmade Carpet Producer
Iran is internationally recognized for its hand-woven carpets.
Persian hand-woven carpets are exported to about 80 countries. Germany, Lebanon, the UK and China were the biggest customers of Iran. Italy, Switzerland, the UAE, Kuwait and Qatar are other traditional buyers of Iranian carpets.
According to Fereshteh Dastpak, the head of Iran National Carpet Center, about 80% of hand-woven carpets produced in Iran are exported.
Latest data show Iran exported $176 million worth of hand-woven carpets during the first seven months of last Iranian year (March 21-Oct. 22, 2018). The figure showed a 20% decline compared with the similar period of the year before.
The northwestern city of Tabriz, which is considered the world’s capital of hand-woven carpets, has employs 200,000 people in the sector.