Country: Egypt

Emphasising on his government’s focus on the development of textile industries, Egypt’s Prime Minister Ismail Sherif on March 28 sought out a comprehensive plan to develop the industry.

This plan is slated to be submitted for discussion during a Cabinet meeting on Tuesday, Cabinet Spokesman Hossam Qawish said.

Also Read – Egypt inks deal with Werner International to revive textile firms

Ismail, while addressing a meeting with governor of the Central Bank of Egypt, the ministers of trade and finance, the head of the Federation of Egyptian Industries and representatives of textile companies, said that urgent measures will be taken to develop and encourage textile industries to bring about a rise in exports. The industry covers all working segments, mainly women, and is associated with other small and micro enterprises, he said, adding that studies for establishing a textile city in Minya must be completed on a priority basis.

Besides, the meeting also addressed the main obstacles facing textile industries.

In order to streamline its 25 state-owned textile companies, Egypt has inked a deal with US-based Werner International. This was revealed by investment minister of Egypt Ashraf Salman.

Egypt’s textile manufacturing sector, which was once a flourishing industry, has gone downhill in the past decades due to use of redundant textile machineries, dating back to 1950s, by the state-owned companies.

With the restructuring of the 25 state-owned textile industry by Werner International, Egypt’s textile industry will get the much-needed boost.

Founded in New York in 1939, Werner international is a management consultancy firm that caters to the world’s textile, apparel and fashion industries, and has a clientele list in 70 countries. It has been working with Egypt for a long time, providing services to the Egyptian government in creating its upstream textile manufacturing base in the 60s and textile sector development strategy in the late 70s. The company’s support to the textile industry had helped Egypt maintain its momentum in the 90s as well. The Company also supported Egypt’s plan to privatize its textile manufacturing companies.

Also Read – Egypt to hike export fee on fabric scraps to EGP 3,500/ tonne

Commenting on the deal, Ahmed Moustafa, head of the state-owned Holding Company for Textiles said, “The restructuring will start in February and will take 43 weeks to complete.”

In the first 10 months of 2015, the exports of textile, home textiles and readymade garments companies made US $ 2.4 billion, accounting for around 15 per cent of the total non-oil exports, as per the Ministry of Industry and Foreign Trade.

As per the report from the Netherlands Centre for Promotion of Imports from developing countries, the public and private companies from the labour-intensive sector creates around 25 per cent of all industrial jobs in Egypt.

In a renewed effort to support the textile industry, the Egyptian government has decided to impose an export fee of EGP 3,500 per tonne on fabric scraps. The decision has come in response to demands from textile manufacturers in this regard.

These fees have been imposed on raw materials to ensure their availability in the local market and avoid negative impacts on the local textile scenario due to shortage of scraps, especially since it is a labour-driven industry. A previous decision in this regard is to expire by the end of 2015.

According to Trade and Industry Minister Tarek Qabil, “Exports of fabric scraps have been growing over the past three years from 43 tonnes in 2013 to 93 tonnes in 2014, and 294 tonnes in 2015.”

The ministry of trade and industry has also sought the required approvals from the Cotton and Textile Industries Holding Company and the Egyptian Textile Export Council Holding Company to maintain the fee. The Home Textile Export Council also suggested charging a fee, so that the fabric can be used by small and medium-sized factories. The Egyptian Businessmen’s Association, in fact, suggested a fee hike of 25 per cent.

Also Read – Egyptian textile and apparel sector poised to grow 4 times by 2025

The move follows the recently approved investment projects by the Egyptian government for safeguarding the local textile manufacturing industry. In this regard, the Industrial Development Authority has issued 181 fresh approvals for new industrial projects, including 27 projects for textiles. According to IDA’s report, Textile production in Egypt ranked fourth among the sectors chosen for investments. These approvals will be implemented across 20 governorates like Menoufia (35 projects), Sharqia (23 projects), followed by Cairo and Giza, with 15 projects each, Alexandria with 15, Sohag and Gharbiya with 12 each etc.

The industrial development indicators for this month reflect the demand of local and foreign investors for industrial activities and their trust in the Egyptian textile sector.