According to a report in the “Egyptian Gazette” on May 26, Egypt’s textile industry is declining day by day and is in urgent need of strong support from the government. According to the report, the textile industry is one of Egypt’s pillar industries, with about 400 factories and employing 300,000 people, of which 70,000 are in state-owned enterprises and 230,000 in private enterprises. It contributes 1/4 of Egypt’s non-agricultural jobs, and textile exports account for 27% of total exports of non-petrochemical products. Since the sudden change in the political situation in 2011, the Egyptian textile industry has been hit hard. Due to lack of financial support, Egyptian 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. The obsolescence of equipment also directly affects the quality of products.
The report pointed out that if the government does not save the textile industry as soon as possible, Egypt’s textile products will gradually lose their competitiveness in the international market.
The cash-starved banking industry also refused to lend to the textile industry.
Due to lack of funds, Egyptian textile companies generally choose to purchase low-grade cotton in the international market at a price between 600-700 Egyptian pounds per quintal (100 kilograms), while high-quality Egyptian cotton costs 1,000 Egyptian pounds per quintal. pound. As the domestic market for Egyptian cotton has shrunk, cotton farmers’ enthusiasm for planting has been dampened, and Egyptian 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 and eventually make Egyptian textile products lose their competitiveness in the international market.
