Textiles and Ready-Made Garments: Sector Overview
Competitive Strengths and Capabilities
Statistics & Exports
Strong Government Support for the Textiles Industry
Textiles and Ready-Made Garments
Egypt is home to the only fully vertically integrated textiles industry in the Middle East, with the entire production process — from the cultivation of cotton to the production of yarns, fabrics and ready-made garments — carried out domestically. The sector plays an extremely central role in the Egyptian economy.
It is the first in terms of jobs accounting for 30% of local employment. It accounts 14.4% of NonPetroleum exports in 2013, according to General Organization of Export and Import Control (GOEIC).
The RMG subsector produced more than 340.6 million pieces in 2011/2012 with global brands such as Marks & Spencer, GAP, Wal-Mart, Levi Strauss, Target and Calvin Klein sourcing from and investing in Egypt.
Of the 25% of the industry focused on textile production, home textiles constitute 12% of the industry, and cotton yarn 8%, while the remaining 5% is attributed to other cotton fabrics and textiles. The majority of spinning (50%), weaving (60%) and hemming (60%) capacity is owned by the public sector while 90% of garmenting capacity is private. For the spinning and weaving industry, medium- to large-scale companies dominate the industry with a strong public sector presence in spinning and weaving. Egypt imports yarns from China, India, Turkey, Indonesia , Pakistan and other countries. Furthermore, gray and finished fabrics are imported from China, Turkey, India, and other countries to feed the RMG industry. The government’s strategy is to boost exports to the European garment market by moving up the quality ladder in garments, vertically integrating the garment production value chain (e.g., use local extra long staple (ELS) cotton, improve design and patternmaking offering) and defending leadership in low-end garmenting by establishing strong brands at both country and supplier levels. Also on the agenda is restructuring the domestic textile industry by privatizing mills and leveraging on low cost and provided labor in addition to a large domestic supply of high-quality cotton.
Competitive Strengths and Capabilities
Core Areas for Investment: Cotton production, yarn making, spinning, weaving, knitting, dyeing and ready-made garments.
High Quality Raw Materials: Egypt’s cotton is internationally prized and valued for its quality. In 2012/2013, Egyptian cotton exports reached about USD 120.3 million of raw cotton, and USD 91.2 million of cotton yarns, according to the Egyptian Central Bank statistics. Competitively Priced Skilled Labor: The textile industry is labor-intensive, and human resource costs can be a heavy burden on a large company. Wages in Egypt are among the most competitive and stable in the region. Additionally, training programs and government initiatives continuously upgrade the skills of Egyptian laborers, improving their usefulness to textile manufacturers. Strategic Location: The country’s geographic location facilitates export to Asia, Africa and Europe; Egypt is also closer to the US than its competitors such as India and Indonesia. Egypt has 15 commercial ports to facilitate exports.
Free Trade Agreements: In addition to Free-Trade agreements with the EU, COMESA, MERCOSUR Agreement and the Arab World, Egypt’s QIZ agreement with Israel and the United States gives local manufacturers both tariff and quota-free access to the US market on the condition that 35% of the commodity is manufactured in a qualifying zone, and a minimum of 10.5% of the product is from Israeli inputs.
Textiles and RMG sector employ about 30% of local employment.
Total exports of textiles and RMG reached USD 3.1 billion,...
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