Textiles and Garments

WHY ARE MORE and more global brands sourcing their ready-made garments from Egypt? Consider this: Abun­dant supplies of high-quality long-staple and extra-long-staple cotton. A highly skilled, cost-effective workforce — the aver­age hourly pay rate in the Egyptian textile sector is US $ 0.9 per hour. A wide network of preferential trade agreements, many of which provide tariff-free access to major global textile mar­kets. A community of suppliers and manufacturers whose exper­tise in meeting global quality standards dates back to the nine­teenth century. Proximity to major global markets, supported by a strong network of both Mediterranean and Red Sea ports.

Those advantages and more are attracting global brands such as Marks & Spencer. GAP, Wal-Mart. Levi Strauss, Target and Calvin Klein to source from and invest in Egypt. As early as 2002. leading international fashion house Valentino outsourced 1% of its menswear needs to Egypt's A rata Group. At the same time, major textile powers such as China and Turkey are estab­lishing industrial zones in Egypt, while a growing number of foreign companies are relocating their entire production opera-lions to benefit from the advantages of the local industry.

Meanwhile, a handful of home-grown players are becom­ing export powers in their own rights by acquiring design shops and labels in other markets. Others have responded to the in­creasing opportunities and competition within the sector by ex­panding and updating their operations, or going into partnership with multinational players to manufacture and sell products in Egypt's booming market or for export around the world.

Ranked among the top three carpet producers worldwide. Oriental Weavers is one such company, selling carpets in over 90 countries and capturing 30% of the United Slates' market through its US-based Sphinx division.

Attracting New Investment

Offshore investment has accounted for 37% of all investment in the ready-made garments sector since 1970. Total investment in the sector (foreign and domestic) has risen by an average of 9.5% per year over the past four years.

The world's fastest-growing economy has caught on. too, In 2006. Egypt and China agreed to facilitate Chinese invest­ments in the Egyptian textiles and ready-made garments indus­try through the establishment of a Chinese-Egyptian industrial zone. The two countries have also agreed to set up an Egypt-based Textile Technology Service Center to help upgrade pro­cesses and technology used by producers based in Egypt.

Where Quality Counts

Egypt's commitment to quality dales back to the reign of the re­former Muhammad Ali Pasha (1805-1848). making Egypt one of the world's most experienced garment and textile centers. Today, Egypt is home to the only fully vertically integrated tex­tiles industry in the Middle East: The whole production pro­cess, from the cultivation of cotton to the production of yarns, fabrics and ready-made garments, is carried out domestically.

Egypt's textiles and garments industry employs 25% of the country's industrial labor force. As the industry adopts global quality standards, more and more companies are signing up for unique programs through the government's IndustrialTraining Center (ITC). which provides subsidized training tailored to the specific needs of foreign and domestic industrial producers alike.

Supplying the World

Egypt exported more than US$ 1.2 billion worth of textiles and ready-made garments in 2006-07. accounting for 18% of the country's non-oil exports that year. More than 38.2% of the ex­ports consisted of ready-made garments, followed by cotton textiles (21.8%). cotton yarn (10.8%). cotton (10.5%) and car­pets and other floor coverings (10.5%), among other catego­ries. Major domestic exporters include Saba Apparel (exports of E.GP 1.46 billion in calendar year 2007) and Swiss Garments (EGP 408.64 million in 2007).

The US is Egypt's single largest market for textiles, buying US$ 1X0.8 million in 2006-07. followed by the European Union (US$ 160.7 million), then Asia and non-Ell European countries.

Through a broad-based campaign to at­tract new foreign and domestic investment to the sector— including an intensive cam­paign to recruit foreign retailers, modern­ize the industry and build on the success of free trade agreements — the Egyptian gov­ernment plans to more than double textile exports to US$ 3 billion by 2011.