Prospects for the Textile and Clothing Industry in Egypt

PRLog (Press Release) – Feb 14, 2007 – The textile and clothing industry in Egypt is a vital contributor to the country’s exports and employment. The sector produces a wide range of fibre-based products, including raw cotton, yarns, fabrics, garments and made-up textiles. International brands such as Gap, Guy Laroche, Pierre Cardin and Tommy Hilfiger are made in Egypt under licence for the highly protected domestic market. The industry benefits from low labour costs (around US$60 a month) and some of the world’s best raw cotton, although much is exported. The public sector dominates—despite privatisation—but plays a lesser role in knitting and garments. State-owned Misr Spinning & Weaving is the biggest textile enterprise in Africa and the Middle East. The industry faces several challenges. Raw cotton output is falling, productivity is low, especially in the public sector, and major investment is needed in dyeing and finishing. Many firms are inflexible, and find it hard to adapt to changes in technology and markets while foreign investors are deterred by the slow pace of economic reform and by instability in the region. Exporters depend on the EU and USA for 90% of their exports, and fear that sales will be hit by the global elimination of quotas at the end of 2004. But a fall in the Egyptian pound against the US dollar has boosted competitiveness—as should upcoming free trade agreements with the USA and Turkey. Also, the government is striving to upgrade the industry and strengthen its marketing capabilities—with the help of consultants Werner International and funding from the European Commission.

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