Madbouly said that as part of its reform plan the government decided to intervene and support such a vital industry. He added that the government seeks to substantially increase the production rates of the spinning and weaving sector to meet the needs of the domestic market, state-run factories and the private sector; and to increase exports as well.    

The company, whose contributions once constituted 40 percent of the country's national economy, has been burdened with debts estimated at EGP 21 billion, and has incurred accumulative losses of EGP 8 billion, Madbouly said after concluding an inspection tour of the ongoing development process.

The development cost, he noted, is estimated at EGP 30 billion, including EGP 8.5 for new constructions and upgrading existing ones at all the companies' branches nationwide.

In addition, the prime minister pointed out that importing new machines to improve the company’s final products – including cloth, terry cloth, and others – will cost up to EUR 650 million.

The premier explained that the state’s decision to intervene to develop the spinning and weaving sector is in line with similar decisions the state took to develop certain sectors that serve the country's economy. Such intervention, he said, should also help prepare the way for the private sector to complete the development process later on.

He acknowledged that post spinning and weaving products – which are essential for the manufacturing of clothes – are very important to the private sector working in the clothing and textile industry. But he asserted that the private sector cannot initiate the development process of the spinning and weaving industry.  

"The reality reflects to us the inability of the Egyptian private sector to take the first steps in developing this important industry, especially the spinning," a cabinet statement quoted Madbouly as saying, calling on the private sector to kick-start a real partnership with the state after its recent steps.

"The state was able to secure financing for these projects, and it is now the private sector’s turn, which we welcome, to assume responsibility for management, operation and marketing, which are aspects in which the private sector is distinguished," he added.

Egypt seeks to create an attractive environment for both local and foreign investors in line with the State Ownership Policy Document (SOPD).

The SOPD aims to increase real GDP growth to between seven percent and nine percent through increasing public investments by between 25 percent and 30 percent and the creation of more job opportunities.

The basic plan of the SOPD is to raise the input of the private sector from the current 30 percent to 65 percent over the next three years.

In August 2022, Egypt announced it will start in 2023 the experimental operation of a new spinning factory, described by the government as the world's largest factory.

The new factory is part of a broader plan already set into motion by the Egyptian government to upgrade the public sector spinning and weaving industry.

The plan, under which 23 state-owned textile companies have already been merged into eight, includes developing the infrastructure of the companies concerned and obtaining advanced new machines.

It also includes developing Masr Spinning and Weaving Company by establishing six new factories, upgrading two existing ones (Ghazl 4 Factory and Ghazl 6 Factory), developing a training centre, and automating work systems, production, sales, quality, maintenance, human resources and store sectors.

Egypt’s textile manufacturing industry is the second-largest in the country.

Due to the COVID-19 pandemic, Egypt’s textile exports shrank by 14 percent in 2020 to $2.8 billion, down from $3.7 billion in 2019, according to the Textile Exports Council.