Opinion| UNIDO Egypt fosters manufacturing sector recovery in a changing economy    Opinion| Consequences of US withdrawal from Middle East    Cairo joins in 'Orange the World' campaign raising awareness on gender-based violence    EU, Egypt partner in supporting gender-targeted programmes: Ambassador Berger    Luiza Formenius launches new single 'I'll Be Home For Christmas'    Korean Ambassador urges need to enhance space cooperation with Egypt    Export-Import Bank of Korea delegation visits Cairo to chart Roadmap for future cooperation    Egypt renews call for nuclear weapon-free zone in Middle East    Wegz is most streamed artist in Egypt during 2021 for second consecutive year: Spotify    Orange Egypt Continues its Sponsorship for iRead Awards Ceremony    Egypt participates in 8th Forum on China-Africa Cooperation    Egypt, Qatar discuss cooperation in sports infrastructure    Poor sleep habits are associated with deficient control of blood sugar after meals    Prominent Egyptian anchor calls on UK to designate "Muslim Brotherhood" a Terrorist entity    Egypt, Israel sign deal sign MoU to increase gas supplies, hydrogen transport    Egypt's stocks end week in green as benchmark EWX 30 surges 0.69%    Mortada Mansour sets road map for Zamalek, after normalization committee depart    I seek to secure stable financial sources to build strong judo team: Motei Fakhr El-Din    Orascom Construction joins consortium to develop Egypt's first green hydrogen production facility    98 potential candidates run for Libyan presidency    'Lake Victoria – Mediterranean' navigation corridor awaits feasibility studies, funds: official    Egypt's trade with Nile basin countries climbs 26% y-o-y in 9 months    Egypt selected to host COP27 international climate conference in 2022    Number of British tourists to Egypt seen hitting 500,000 this winter – envoy    The unvaccinated prohibited from entry to Egypt state institutions starting December 1    Egypt, Greece ink deal for first subsea power link between Europe and Africa    SCOHRE sparks discussion on harm reduction, tobacco control    Egypt to receive first of six high-trains from Spain's Talgo in mid-November    Egypt's iron and steel exports jump 197% in 8 months    Ethiopia halts work at its embassy in Egypt for 'economic reasons'    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Russia says it's in sync with US, China, Pakistan on Taliban    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    Brazil calls up 8 EPL players for World Cup qualifying    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Sisi calls on House, Senate to commence second legislative sessions on 3, 5 October    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    Qa'a play showing at Lycee El Horreya Theatre, Alexandria is a must go    APO Group enters new exclusive agreement with Getty Images on African press releases and images    On International Museum Day, Egypt opens two new museums at Cairo Airport    Old Cairo's Al-Fustat will be revamped on Egyptian President's directives    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Government textile industry faces immense challenges
Published in Daily News Egypt on 09 - 07 - 2012

Government textile industry faces immense challenges
By Mohamed Salah Al-Din
The government textile sector is suffering from variety of problems; it is indebted to banks and various government agencies, it suffers from ageing equipment, it is unable to produce enough output to cover the costs of labour and material inputs.
The sector's troubles make it a thorny subject for the new Egyptian political regime.
After statements by the Freedom and Justice Party, the government textile sector is anticipating decisions that could help the public sector to stand the competition of private companies.
Sabry Ereeda, head of the Cotton and Textile Industries Holding Company (CTIHC), stated that textile companies suffer from historical debts which have prevented them from modernising equipment since the 1980s. Ereeda stressed that holding the head of the company accountable for poor performance is a mistake, as it is necessary to hold everyone responsible for performance.
Textile companies seek to cover the cost of raw materials and labour, but they end up selling finished products for prices close to those of raw materials. The sector is currently looking forward to the coming reforms, according to Ereeda, especially smaller enterprises that aspire to develop a comprehensive vision to bring in appropriate profits.
There are only three public sector textile factories in Egypt, but they cannot compete until they're able to provide high quality products. This is not possible with the current outdated equipment. The price of one kantar of cotton is EGP 725 while a ton of wool costs EGP 135,000. The wool is imported by the STIA Company, as this comapany holds an importation licence. Ereeda said the sector is not only in need of wool, but also Acrylic and Polyester. Factories often close for several days until the raw materials are acquired.
Companies in the public sector have difficulty coordinating with various administrations within a single company.
Ninety percent of production goes to the armed forces. Ereeda added that the company provides yarn to the EgyptHelwan Company in exchange for cloth in order to fulfil the military's needs in a timely fashion so as to avoid paying fines, noting that contracts with the armed forces currentlystand at approximately EGP 3million.
The current system of Egyptian textile manufacturing is the same one used in Germany in 1984, Ereeda exclaimed, adding that new electronic weaving systems are able to reveal flaws in the fabric, a technique made difficult or impossible by hand looms.
Companies in the textile sector require investments in equipment, labour, and administration in order to produce high quality products acceptable to consumers.
The ratio of administrative workers to technical workers is 4:1, Ereeda added, noting that companies need to increase the latter in order to operate efficiently.
Annual interest on debts to the National Investment Bank adds up to nearly EGP 60million, and the settlement brokered by former Minister of Investment, Mahmoud Mahhy El-Din, was in the favour of the banks.
Ereeda said he was against the closing of Egypt to cotton imports, but noted that protective tariffs must be established so that Egyptian companies can compete with their foreign counterparts. The public sector's textile production is poor because of the lack of investment for many years. Ereeda stated that he is not against privatisation in principal, but that it must proceed transparently and protect the workers.
Wages in the private sector are higher than the public sector due to the significant decline in the production of the latter.

Clic here to read the story from its source.