When Berhane Abraha was in sixth grade, his father had to leave Ethiopia because of his political beliefs. For the young boy, this was a formative moment. He felt obliged to find work and support his mother. She eventually had to ask a relative if Berhane could join his small carpentry workshop. Despite receiving minimal payment, it addressed his emotional need to feel he was supporting her.
Three years ago, at the age of 45 and already the CEO of a successful eyewear businesswith more than 20 franchises and three production labs across Ethiopia, Berhane started a new business to manufacturebespoke furniture and fittings for the hospitality industry as well as private customers.
“I had an emotional attachment to the industry from my time in that workshop. When I hear the sound of woodwork, it takes me back. I still remember the smell of one specific type of wood as well; when it is cut, it transports me,” he says.
Majestic Furniture now has 70 employees and three retail shops. Berhane says within the next couple of months, the company is opening another factory and four more franchised outlets. He is hoping to increase the staff to 120.
Majestic Furniture manufactures a range of products, including beds, sofas, kitchen cabinets and doors. It sources leather and wood locally but imports some of the accessories and fabric for the pieces from India, China and Europe.
Manufacturing what the market wants
Berhane had a piece of land with a warehouse he acquired many years ago. However, he didn’t immediately start manufacturing once the idea for Majestic Furniture was solidified. He first conducted market research to understand the challenges and gaps in the furniture industry in Ethiopia.
The market potential is good, according to Berhane. “There is a lot of construction in the country with hundreds of new hotels being built. These are all going to need furniture, doors and cabinets. I wanted to grab the opportunity and use the land I had, as long as I could obtain a portion of that market,” he says.
From his initial market research, he realised good finishing was essential for customer acceptance. He invested in bringing Italian experts into Ethiopia to train Majestic Furniture’s employees on the correct technique for painting and finishing.
“The second thing I realised from the research was that having the right designers onboard was crucial, so I appointed them,” he explains. “For almost two years now, we have been developing the product, testing it in the market, and now we are ready for serious growth. People are happy with the pricing and with the product. They look at it and think it is imported.”
Majestic Furniture is selling to the public from its showrooms – as well as online – and business is picking up. The youthful population of Ethiopia, where more than 50% of the 114 million citizens are younger than 30, is a potential market in the medium term. “These young people are looking to move into their first homes and start their lives,” he explains
“A German company recently released a study and estimated that in Addis Ababa alone, there is a need for 10 million doors. There are only about 350 companies in the country that can supply these and together we don’t make up even a third of the volume required,” says Berhane.
The company’s main focus, however, remains sales to the hospitality industry. According to a 2020 JLL report on the hotel industry in Ethiopia, economic growth in the country and the increase in foreign investment will positively impact corporate demand for hotel accommodation in the next few years. The report states that the country has more than 21 internationally branded hotels currently under development, which could add 4,300 rooms.
Berhane hopes that Majestic Furniture will get a slice of this market once construction is finalised and believes the time spent on product development will pay off. As Majestic Furniture is aiming for high-end customers and corporate clients, its products have to reflect quality.
To this goal, the company has substantially invested in the technology and skills required for perfect painted finishes and digital painting equipment has been imported from China. Qualified trainers are still being brought in to improve the finishing and quality control.
As the industry becomes more competitive, human capital remains a challenge as skilled workers are increasingly being poached. To solve this problem, Berhane has prepared himself to always have permanent skilled workers from India or The Philippines on the factory floor to train local staff on an ongoing basis.
He is considering exports in the future but for now, he would like to concentrate on substituting imports.