Workers go on strike, factories close down, textile companies are short of raw materials, and cotton textiles are subject to strong competition from international rivals… Since political problems occurred in Egypt in 2011, the development of the country’s textile industry has been worrying. The textile industry is one of Egypt’s pillar industries, with about 400 factories, employing 300,000 people, of which 70,000 are in state-owned enterprises and 230,000 are in private enterprises, contributing 1/4 of Egypt’s non-agricultural jobs. , textile exports accounted for 27% of total exports of non-petrochemical products. The “Egyptian Gazette” pointed out in May this year that since the political situation suddenly changed, the textile industry has been hit hard. Due to lack of financial support, textile companies are struggling to purchase raw materials and pay workers’ wages. At the same time, due to old equipment and poor maintenance, only 30% of state-owned textile enterprises are able to operate at maximum capacity. Obsolete equipment also directly affects the quality of products.
The Egyptian textile industry is declining day by day. Egyptian industry insiders call on the Egyptian government departments to integrate with international standards and provide more favorable financing policies to textile manufacturers and exporters.
The “Tai Dou” factory suffered heavy losses
“Although Egypt’s textile exports have a long history, it is currently facing internal and external troubles. Due to the political turmoil and economic recession in the past three years, the Egyptian textile industry has been in a trough. Most textile factories have been closed, and some privatized enterprises After the restructuring, it has become a state-owned enterprise acquired by the government after judicial judgment.” The president of the Egyptian Textile Export Association said that on the one hand, the development of Egypt’s domestic textile industry has stagnated; on the other hand, since the European market exempts textile imports from Pakistan from tariffs, Pakistani textiles The price exported to Europe is about 30% lower than that of Egypt. Egypt is facing fierce competition from Pakistan in the field of cotton textiles.
The Egyptian Textile Holding Company is Egypt’s largest state-owned textile industry factory and a “leading” textile enterprise in Egypt. The company is located in Mahalla, Egypt’s important cotton production town, and has 32 companies under its umbrella, including 9 cotton companies and 22 spinning, weaving, dyeing and finishing companies. However, even Egypt’s leading enterprises have experienced company liquidation in 2012, workers’ strikes, union reorganization and other disturbances in 2013. In February this year, the workers’ strike lasted for more than a week. Ahmed Mustafa, chairman of the holding group, recently disclosed publicly that salary expenses for this fiscal year were 2.3 billion Egyptian pounds, compared with 1.9 billion Egyptian pounds in the previous fiscal year. The losses of Egyptian textile companies totaled 2.1 billion Egyptian pounds, which was higher than the level of 1.8 billion Egyptian pounds in the 2012/2013 fiscal year. Among the 32 branches, only the cotton company was profitable.
The closure of factories or low production capacity has caused the country’s textile companies to lack production raw materials. Egyptian textile commodity buyers have publicly stated that due to the closure of local textile factories, apparel products, especially dresses, evening wear and military apparel, including uniforms, berets, boots, socks, blankets, belts, etc., are in short supply.
Companies call for financial support
The development of Egypt’s textile industry lacks financial support, and the country’s banks are also facing a shortage of cash and therefore refuse to provide loans to the textile industry. This makes Egyptian textile companies struggling to purchase raw materials and pay workers’ wages. At the same time, due to old equipment and poor maintenance, only 30% of state-owned textile enterprises are able to operate at maximum capacity. Obsolete equipment also directly affects the quality of products.
In addition, the development of Egypt’s cotton industry has also been affected. Egyptian cotton has long, smooth and good toughness. It is the best raw material for the textile industry and has long been famous in the world. However, due to lack of funds, Egyptian textile companies generally choose to purchase low-grade cotton in the international market at a price between 600 Egyptian pounds and 700 Egyptian pounds per quintal (100 kilograms), because high-quality Egyptian cotton costs 1,000 Egyptian pounds per quintal. Egyptian pounds. The domestic market for Egyptian cotton has shrunk, and cotton farmers’ enthusiasm for planting has been hit. Egypt’s cotton output has decreased year by year, from 3.8 million quintals in 2012 to 2.5 million quintals in 2013. In addition, foreign textile manufacturers prefer to use short-staple cotton. Short-staple cotton already occupies 97% of the market share, while Egypt’s flagship product is still long-staple cotton. At the same time, due to the promotion and planting of long-staple cotton around the world, Egypt’s long-staple cotton has lost its international competitiveness in terms of quality and price. This situation will create a vicious cycle. The Egyptian communiqué pointed out that if the government does not save the textile industry as soon as possible, Egyptian textile products will lose their international competitiveness. Egyptian industry insiders also called on the government to provide financial support to the textile industry.
The government allocates an additional EGP 300 million
In February this year, Egypt’s Finance Minister stated that the government planned to allocate 2.83 billion Egyptian pounds from the budget to ensure the supply of basic supplies in Egypt. Cotton and Textile Industries Co., Ltd. (CTIHC) will receive EGP 206 million, which will be used to pay bonuses to workers. According to news this month, the Egyptian government has recently adjusted the subsidy plan for the textile industry and will decide to increase the financial subsidies to the country’s spinning enterprises from the original 200 million Egyptian pounds to 500 million Egyptian pounds in the 2013-2014 fiscal year.
Mounir Fakhry Abdel Nour, Egypt’s Minister of Industry and Trade, said that this decision is based on the Egyptian cabinet government’s decision to revitalize Egypt’s cotton spinning industry and the development of the textile industry, and aims to help the country’s textile companies purchase cotton. Encourage Egyptian spinning enterprises and exporters to increase the purchase of Egyptian cotton, while reducing cotton imports, so that Egypt’s cotton spinning industry can achieve overall development. According toAccording to data from the Central Bureau of Mobilization and Statistics, in the second quarter of this year in Egypt, the amount of Egyptian cotton purchased by Egyptian companies dropped to 79.9%, only about 81,600 kantars. During the same period, Egyptian cotton exports also increased compared with the same period last year. dropped 46.5% to 126,600 tons.
According to the decision, in the cotton sales season that will end at the end of August this year, spinning companies will receive a financial subsidy of 350 Egyptian pounds for every kantar (approximately 45-50 kilograms) of Egyptian cotton purchased. Exporters who purchase one qantar (approximately 45-50 kilograms) of Egyptian cotton under the same conditions can receive a subsidy of 200 Egyptian pounds. The government’s latest decision is to save spinning companies that are on the verge of bankruptcy and hopes that the output of Egyptian cotton can reach 1 million kantars. In the past, Egyptian spinning companies were reluctant to buy domestic Egyptian cotton because of its high price, but the new measures seem to have brought the price of Egyptian cotton to the price of imported cotton.
