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Beset by Political Chaos, Egypt Admits its Textile Industry is Hurting

Beset by internal chaos, Egypt has persistently maintained that its textile industry remains strong, despite mounting evidence to the contrary. Now, its government is finally acknowledging the negative impact it has suffered from political tumult.

Last week, a statement was issued by the Egyptian Cabinet stating that it was taking measures to stanch the textile industry’s losses, particularly those incurred by the Holding Company for weaving and spinning.

In 2013, the Holding Company lost an estimated $2.9 million. Also, the general consumption of cotton by Egyptian weaving and spinning mills recorded a 1.7% decline between March and May 2013. The consumption of imported cotton also experienced a marked decline, dropping 6.3%, according to data provided by the Central Agency for Public Mobilization and Statistics (CAPMAS).

Osama Saleh, the Minister of Investment, attributed the losses to degraded textile equipment and the increasingly dire financial circumstances of its workers. Fouad Abdel Aleem, chairman of the Holding Company, said that the steady rise of the price of cotton has also taken its toil on Egypt as well.

Both studiously avoided discussing Egypt’s battered textile industry in relation to the political triage that has enveloped Egypt. Stridently projecting confidence has been the general strategy for the Egyptian government but that optimism is becoming harder to reconcile with its well known political instability. A few months ago, Mohamed Kassem, chairman of Egypt’s Ready-Made Garments Export Council, contended that, despite domestic chaos, “production has never stopped and deliveries will be met.”

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Nevertheless, Egypt’s textile sector has languished since the 2011 revolution. According to Mohamed al-Murshedi, president of the Textile Industry Division and vice president of the Federation of Investors, approximately forty percent of Egypt’s textile factories have shuttered their doors due to national economic malaise.

Mohamed al-Qalyubi, president of the the Investors Organization of Mahala, said that at least forty textile factories have permanently shut down, including major ones operated by Abu al-Sabaa and Fajar al-Mahala.

Fatahi al-Sayyed, president of the Investors Organization of Buhaira, claims that as many as 100 manufacturing companies of various sizes have closed down as a result of Egypt’s economic downturn.

Egypt’s exports received a short-lived boost last December from the devaluation of its currency. However, businesses have struggled to capture these gains since the general economic condition continues to deteriorate and the garment industry is so dependent upon its own imports of yarn, fabric, and various accessories.

Egyptian cotton is renowned for its high quality but is mainly exported since it is generally too expensive to be used to manufacture denim and t-shirts, the main cotton products desired by Western retailers.

One of Egypt’s biggest employers, the textile industry provides nearly a quarter of all its industrial jobs and accounts for twenty-seven percent of of all non-oil exports. Egypt exported $2.2 billion worth of textiles in the first nine months of 2012, a hefty ten percent drop off from the previous year. In 2013, so far, that decline persists unabated. Now, Egypt’s straitened circumstances have become so dire they have produced a newfound public candor. Even the official CAPMAS report cited civil unrest as the principal cause of the nation’s economic floundering.