Egypt's Ministry of the Public Business Sector has launched a new strategy to restructure all textile companies under the Cotton and Textile Industries Holding Company with the aim of restoring the Egyptian textile industry locally and globally.
The strategy involves a plan to reduce the companies’ losses and increase profits with a total investment cost of EGP 21 billion.
The strategy will be fully implemented by 2022.
The government has already started to implement a plan, at a cost of EGP 8 million, to have 17 centres in Fayoum and Beni Sweif governorates receive cotton crops directly from farmers with no intermediaries.
According to Minister of the Public Business Sector Hisham Tawfik, this system gives farmers the right to be paid 70 percent of the sales price in cash, and that the remaining 30 percent are to be paid within one week of the public auction.
As part of its vision 2025, Egypt also plans to establish a new integrated city for textile industries and to boost the sector with EGP 12 million. The plan also involves establishing four new factories, modernising old equipment in existing factories, and providing training for workers.
The government plans to quadruple textile and garment exports by 2025.
Moreover, the Chinese company Ningxia Mankai began in May to build an industrial city for textile and clothing production, which will reportedly cover more than 3 million square meters and will host nearly 600 factories with investments worth $9 billion.
The new city is expected to be at full capacity by the end of 2019 according to pilot studies, the Chinese company said.
However, the head of textile industry at the Federation of Egyptian Industries Mohamed El-Morshedysays that no actions have been taken on the ground to modernise Egypt’s textile industry, adding that the sector has failed to attract investments. He said that even the Chinese company announced as the key investor in the new textile city has not taken any real strides so far.
“The only action we can talk about is the public business sector ministry's project to improve state-owned textile factories. This project costs EGP 8 billion that will be entirely provided by Egypt’s Cotton and Textile Industries Holding Company; no investments have been made,” El-Morshedy clarified.
He also said that the textile city that has been announced is just “ink on paper,” with no actions on the ground.
“I am dissatisfied with the direction of the textile industry, especially since the government has failed to reopen all closed textiles factories. The intentions are good, but there are no real actions to turn these intention into real work,” he added.
The textile and apparel industry contributes 30 percent of industrial production in Egypt and 10 percent of total exports. The EU partnership agreement with Egypt allows the country to export textile and apparel products to EU countries without customs tariffs.