04142014 Executive Session: Usman Carpet House Re-Orients Afghan Production to Higher End

 Executive Session:
PAKISTANI PRODUCER RE-ORIENTING
AFGHAN PRODUCTION TO HIGHER END

By Umair Usman
Usman Carpet House
Lahore, Pakistan

LAHORE, PAKISTAN --Usman Carpet House, a producer of  hand knotted rugs here, is re-orienting production toward higher end and finer carpets.  As the coordinator of a large programmed production of Afghan rugs in the region, the company’s efforts will have far reaching impact on the industry.

As the global economy recovers we are facing new challenges as well as opportunities.  The recession and the subsequent recovery have changed the customer base on a global level.

The last few years saw the middle class in the west shrink and the east rise. Production levels have halved, material prices and labor wages have gone up and overall production has become more difficult.

All of this has pushed the hand knotted rug into the high end, luxury category.

On top of that, the recent strengthening of the Pakistani rupee has really cut into our margins. The rise was particularly sharp, about  11% within 10 days. This was sudden and has left the whole pricing situation at our end in utter devastation.

The problems are not over. We see the continuing strengthening of the rupee, and a rising middle class in our part of the world at least for the next two to three years and this will severely impact production and subsequently prices.

However, we see opportunities in all of this, rather than difficulties. What this means for the company now is that we need to concentrated on finer, more exclusive product. No more can we create the same old product for the middle and upper middle classes. A more sophisticated end consumer will require a more sophisticated product.

Keeping these developments in mind, the company is positioning its production on more exclusive, lesser known designs, yet finer quality rugs. The carpets would retain a traditional element, while incorporating trending colors and designs.  A re-orientation of the production capabilities will ensure that our company can complement the changing business landscape. 

Overall there has been considerable increase in the prices of Afghan production.

Some examples of the new suggested retail prices are:

Super Kazakh 35/35 collection, Chapaat Weave, $1,680 in 5x8 size

 Indus 35/35 collection,  Chobi weave,  $1,800 in 5x8;

Khotan/Oushak 35/35 collection, Khotan weave, is now priced at $1,920 in 5x8;

Yorkshire 35/40 collection, Chobi weave, is now priced at $2,040 in 5x8.

 Himalaya Collection, 42/42 Chobi weave, is now priced at $2,520 in 5x8.

Collection: Mughal 50/50 collection Chobi weave, is now priced at $3,120 in 5x8.

 ED NOTE: Umair Usman is assistant to the ceo of Usman Carpet House, Lahore, Pakistan.