Machine-Made Carpet Producers Under Pressure from Currency Barriers and Rising Costs

KASHAN – Machine-made carpet producers in the Kashan region are grappling with sanctions, obstacles to meeting currency obligations, export restrictions, rising logistics costs, difficulty sourcing raw materials, and a shortage of liquidity.

Arjan Ambassador of the Provinces Group - Hadi Najafzadeh: Kashan and Aranvebidgol machine carpet industry, as one of the important production and export capacities of the region, these days is facing a series of problems in the field of production, supply of raw materials, foreign trade and financial resources. Activists of this industry say that in addition to the restrictions caused by sanctions, the complexity of administrative processes, the difficulty of meeting foreign exchange obligations, the increase in transportation costs and the growth of the final price of products have made the activities of manufacturing companies more difficult.

Machine carpet manufacturers depend on a chain of financial, customs and commercial processes to maintain export markets and meet their obligations; Processes in which any disruption can affect the supply of raw materials, sending products and returning financial resources from exports. In such a situation, the coordination of the executive bodies, easing of regulations and providing the possibility of economic activity according to the existing restrictions are among the important demands of the activists of this industry.

administrative and currency barriers; A challenge beyond sanctions

One of the machine carpet producers in Aran and Bidgol, in a conversation with Mehr reporter, referring to the problems caused by the multitude of devices related to commercial activities, considered the process of clearing foreign exchange obligations as one of the serious concerns of the producers and stated: Economic activists have to go back and forth between the customs, the central bank, the trade development organization and the tax administration to prove the fulfillment of foreign exchange obligations and follow up on the steps to clear the obligation.

Criticizing the complexity of these processes, he expressed: We must be like a soccer ball between these devices so that we can prove our foreign exchange obligations and take action to resolve the foreign exchange obligations. It seems that the producer in this situation has become a person who has all the worries and problems on his shoulders.

Referring to the difficult conditions of economic activity during the embargo period, this manufacturer of machine-made carpets clarified: the activists of the production sector understand the international restrictions; But they expect that internal problems and inconsistencies will not add to the existing pressures.

He pointed out that instead of complicating the activities of companies, the executive bodies should act to solve the problems of producers and facilitate legal processes.

This economic and industrial activist added: "We agree that we are in a state of economic war and sanctions, but it is not fair that the problems of government departments overwhelm our business and make the producer desperate." We expect the responsible bodies to be able to solve our problems.

These statements show that from the point of view of the producers, the issue is not only the restrictions caused by the embargo; Rather, the way regulations are implemented and the level of coordination of the responsible agencies also affects the cost and speed of economic activity. Prolonging administrative processes and multiple follow-up steps can waste companies' time and resources on things that are not directly related to production and market development.

Export restrictions and the difficulty of accessing foreign markets

In a conversation with Mehr reporter, another manufacturer of machine-made carpets named the restrictions caused by the embargo in sending goods to foreign markets as one of the problems of the machine-made carpet industry activists and stated: Some foreign customers want to send products with export labels or brands of other countries such as India due to the conditions of the embargo. But the standard department does not accept this method and this issue can cause problems in sending goods to the target markets.

He also considered the problems related to the allocation of foreign currency, the import of required materials, and the fulfillment of foreign exchange obligations as obstacles to the activities of producers and emphasized: the set of these problems has made it difficult to plan for production and export.

This economic activist added: In export-oriented activities, the continuity of communication with foreign customers depends on the producer's ability to provide orders on time, meet the requirements of the destination market, and fulfill commercial obligations. When international restrictions are combined with domestic administrative and regulatory difficulties, maintaining these connections will become even more complicated. Therefore, we demand that the responsible institutions, while complying with legal requirements and standards, provide practical and transparent solutions to face export restrictions.

According to economic activists, in a situation where companies are trying to continue production and maintain their markets, solving problems related to export and foreign exchange issues should become one of the priorities of supporting production.

Facilitating processes and creating coordination between related institutions can prevent additional costs and provide more opportunities for manufacturers to focus on product quality and market development.

Increasing logistics costs and the difficulty of moving goods

Another manufacturer of machine carpets in Kashan, in a conversation with Mehr reporter, listed the increase in logistics costs and the problems related to the supply of raw materials as one of the most important current concerns of this industry and stated: Some of our main concerns are currently in the field of export, relocation, supply of raw materials, and the increase in logistics costs for the transfer of raw materials and products. There are also restrictions on sending goods, transferring money and receiving documents.

He said: The increase in the costs of sending cargo and delivering products in the target countries is one of the most important problems of export activists. These costs, along with the difficulty of transferring money and restrictions related to commercial documents, increase the final cost of being in foreign markets and make it more difficult to compete with producers from other countries.

This producer emphasized: Logistical problems are not only limited to the export of the final product and also affect the transfer of raw materials needed by the production lines. In such a situation, the increase in the cost of transporting raw materials and products, on the one hand, increases the cost of production, and on the other hand, increases the final price of the export product.

This issue is especially important for an industry where competition in foreign markets depends on price, quality and delivery time. An increase in transportation costs can reduce a part of the manufacturer's competitive advantage; Especially when the company faces currency restrictions and the increase in the cost of supplying raw materials.

On this basis, reducing transportation barriers, facilitating business processes and providing the possibility of more secure financial transfer are among the measures that can help improve the export conditions of machine carpet manufacturers.

Removing obstacles to production and financing is one of the needs of the machine carpet industry

Referring to the capabilities of the carpet industry in the province, Kurosh Khosravi emphasized the need to support the activists in this field and remove the obstacles facing the producers and stated: As one of the important sectors of production and employment in Kashan and Aran-Vibidgol region, the machine-made carpet industry needs effective policies and targeted support in order to maintain its competitive power.

He expressed: Machine carpet manufacturers are facing challenges such as the difficulty of meeting foreign exchange obligations, banking restrictions, supply of raw materials and machinery, electricity and gas outages, and export barriers. Problems that increase production costs and the difficulty of planning for the continuation of industrial units.

The Deputy of Economic Affairs Coordination of Isfahan Governorate stated: Reforming financing mechanisms and revising regulations and procedures limiting business are among the important issues in the way of supporting this industry.

He added: Another important axis in the development of the carpet industry is the use of new technologies and the strengthening of communication between universities, technological companies and manufacturers. The use of digital tools, including artificial intelligence and blockchain technology, can be effective in introducing the identity of Iranian carpets, protecting intellectual property and developing international markets.

Khosravi pointed out: Paying attention to innovation and removing production barriers can also provide a basis for strengthening the position of Kashan and Aran-Bidgol machine carpet industry in domestic and foreign markets.

We support the development of Kashan and Aran and Bidgol carpet industry with all our strength

Mehdi Jamalinejad, in a conversation with Mehr reporter, emphasized the place of Kashan and Aran-Bidgol machine carpet industry in the country's economy and stated: We support the artisans and producers of this region with all our strength and we are ready to take the necessary measures to develop investment, upgrade production lines and remove the obstacles facing this industry.

Referring to the large presence of Kashan and Aran-Bidgol producers in the exhibition events, he said: a significant part of the brands and activists present at the recent Tehran exhibition belong to these two cities, whose high-quality products have a significant place in the international markets in addition to the domestic market.

With a positive assessment of this year's carpet exhibition in Tehran, the governor of Isfahan stated: This year's exhibition was more dynamic and popular than last year, but its simultaneity with the exhibition of the capabilities of villagers and nomads and the crowding caused by it, limited the opportunity for business negotiations, concluding memorandums and forming economic partnerships. Both events have valuable capacities, and holding them at separate times and spaces can help increase productivity and better use of business opportunities by economic operators.

Referring to the need to support producers in difficult economic conditions, he pointed out: In the province's administration, we are fully standing by the artisans so that despite the economic challenges, the process of production and employment will continue. During the visit to the recent exhibition, the issues and concerns of producers in the field of supply of raw materials, market fluctuations, export and other production obstacles were taken into consideration, and the follow-up of the demands of these economic activists is on the agenda.

In the end, Jamalinejad announced his readiness to support the development plans of the carpet industry and said: We support all manufacturers who are looking for investment development and upgrading their production lines. We have also asked the governors to directly list the issues and demands of the artisans and transfer them to the provincial administration so that the existing obstacles can be investigated in the shortest possible time and action taken to resolve them.

The necessity of practical support for production and export

The statements of Kashan and Aran Vebidgol carpet manufacturers show that the problems of this industry are not limited to a specific area. Administrative and currency barriers, export restrictions, increased logistics costs, difficulty in providing raw materials and reduced liquidity are a set of challenges that affect the daily activities of companies.

In such a situation, supporting production requires measures beyond emphasizing the importance of production and export. Coordination between responsible institutions, clarifying regulations, reducing administrative traffic, facilitating the process of clearing foreign exchange obligations and providing executive solutions for restrictions caused by sanctions, can reduce some of the pressure on producers.

It is also necessary to pay attention to the problems of supplying raw materials, the increase in transportation costs, and the increasing need of companies for working capital, in order to maintain production capacity and employment. If producers are to have a continuous presence in foreign markets, they should be provided with the possibility of economic planning, timely supply of raw materials and delivery of orders at an acceptable cost.

In order to maintain its production capacity and export position, Kashan and Aran-Bidgol carpet industry needs to reduce internal obstacles along with managing external restrictions. Manufacturers emphasize that in the conditions of embargo, administrative complications and increase in domestic costs should not become a double factor to weaken businesses.

Finally, the continuation of production and maintaining employment depends on providing an environment in which companies can focus on improving quality, developing the market and increasing competitiveness, instead of spending a significant part of their time and resources on pursuing administrative affairs and dealing with business obstacles. Effective support for production is achieved when the easing of regulations, financing and removal of export barriers actually lead to a reduction in costs and improvement in the working conditions of producers.