CAIRO - The textile and weaving industry continues to suffer from the inability of local products to compete with cheap imported textiles and readymade garments that get dumped in the Egyptian market. Some big factories have started to close, because production costs and workers' salaries are so high. Considering that this sector employs more than 30 per cent of the Egyptian workforce, you can imagine the social disaster if these factories keep on closing. The Government must act swiftly to salvage this industry. Mohsen el-Gilani, the head of the Holding Company for Spinning, has presented a report to Prime Minister Kamal el-Ganzouri describing the unfair competition of the local industry is suffering from products from countries such as India, Pakistan and Uzbekistan, where cotton and yarn are subsidised, and the State supports exports. Manufacturers need the Government to offer them similar subsidies to be able to withstand the fierce competition with the imported products, on which custom duty of only 5 per cent (for yarn) and 10 per cent (for cloth) is paid, as Al-Ahrar newspaper recently wrote. Around a month ago, Minister of Industry Mahmoud Eissa promised to take some measures to help protect the domestic textile industry, including the spinning and weaving, and readymade garments sectors. "These measures will protect the industry form unfair competition from some countries, as well as supporting and developing them," Eissa told the press. Apparently, part of the problem could be settled by halting or at least rationalising the export of cotton, in order to meet needs of local private-sector, public-sector or investment factories. Last year, the Federation of Cotton Exporters (FCE) reached an agreement with local spinning and weaving producers to stop signing export contracts until early June. The agreement allowed local companies to obtain cotton at the export price. However, such tranquillisers are surely not enough to salvage a giant industry that used to account for around 25 per cent of the country's exports.
