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January 2019
Sourcing Opportunities
in Egypt
Textiles, Apparel and Home
Textiles Export Council of Egypt
Apparel Sector
THERE’S MORE TO
EGYPT THAN THE NILE AND SPHINX!
The clothing of men and women of several social levels of ancient Egypt are depicted in this tomb mural from the Eighteenth Dynasty (15th century BC).
Hedjhotep* in Hieroglyphs
* A minor ancient Egyptian deity, a god of fabrics and clothes and, to a lesser extent, of weaving and the deceased.
Sample of ancient Egyptian linen from Saqqara, dating to 390-343 BC
WHY EGYPT: DEMOGRAPHICS
98 mn 2.88% Average Annual Population Growth (2006- 2018)
Population
A Dynamic Labor Force 29 Million currently in
the labor force 700,000 Enter the Egyptian labor market annually
LARGE CONSUMER MARKET
Egypt has emerged as a consumer market of significant importance in
the region, as witnessed by the arrival of global brands and the sharp
expansion of retail sales in the past years. This is partly due to the
sheer size of Egypt’s population that put it as the most populated country in Africa and the Middle East.
WHY EGYPT: THE ECONOMY
Egypt’s Economy is stable with proven resilience. The Egyptian economy’s ability to post positive real economic growth rates amid the global economic downturn as well as during the political unrest that prevailed in 2011-2013 indicates how resilient economic activity in Egypt is.
5.1%
1.8% 2.2% 2.2%
2.9%
4.4% 4.3% 4.2%
5.3%
0%
1%
2%
3%
4%
5%
6%Annual Real GDP Annual Growth (%)
Diversity is a key strength in the Egyptian economy where growth is driven by many sectors, both conventional and unconventional. This enhances the economy's ability to absorb internal as well as external shocks. It also presents multiple opportunities for investors across many sectors.
Sectoral Growth Rates in Q4 2017/18 (%)
3.8%
-4.1%
0.1%
12.1%
6.8%
16%
9.4%
6.9%
7.2%
3.3%
5.5%
4.6%
11.0%
4.1%
12.5%
8.6%
4.0%
4.0%
-10% -5% 0% 5% 10% 15% 20%
Agriculture
Extractive Industries
Manufacturing
Construction & Building
Transportation & Warehousing
Telecommunications
Suez Canal
Wholesale & Retail Trade
Real Estate
Q4 2017/18 Q4 2016/17
110.0% 44.5%
-40% 10% 60% 110% 160%
Tourism
Sources: Ministry of Planning & Dcode EFC Calculations
1 Mn KM² Land Area
12-Day Shipping
USD 298bn
GDP (2018)
TEXTILE AND APPAREL INDUSTRY FACTS
100 mn Population
Apparel Investments 322.7 M/USD
1,500+ Garment
Factories +1.5 mn worker
USD 3 bn T&C
Output
50% of Garment production exported to
U.S.
Investment/Product diversity
Supportive infrastructure
Established competitive advantage
ATTRACTIVE SOURCING DESTINATION
Cotton Production
Yarn Making
Weaving Dyeing
Ready Made
Garments Spinning
Investments Diversity
INVESTMENT DIVERSITY
All kinds of products (100% Cotton):
Twill
Canvas
Denim
Non-Denim
All kinds of single Jersey fabrics in all weights, starting from 90 grams x sqm until 260 grams (100% cotton or cotton blends):
Single Jersey w/Lycra Pique Pique w/Lycra All kinds of Rib: 1x1; 2x2; 2x1
Yarn dyed stripes Fleece Fleece Lycra
Egyptian Knitted
Products
Egyptian Woven
Products
PRODUCT DIVERSITY
Main Ports
Capacity (mn ton/year)
Alexandria 38
El-Dekheila 27
Damietta 20
East Port Said
13
Port Said 13
Suez 7
El-Sokhna 9
Adabiya 8
Total 135
SUPPORTIVE INFRASTRUCTURE
Airports
20 Railway Network
9,570 Kilometers
Road Network
108,784 Kilometers
In addition to:
Advanced testing labs & technology centers
Egypt’s Air Cargo Airport, located in Cairo, currently has
5 cargo terminals
Commercial river/sea ports
15
Key global markets in Europe, the Middle East, Africa and the Indian Subcontinent are all readily accessible from Egypt. Closer to the European and North American markets than other major exporters including India, China and the Philippines, Egypt is also located on key international logistics routes.
Egypt enjoys the existence of the Suez Canal, which is considered to be the
shortest link between the east and the west due to its unique geographic location. Approximately 8% of the world’s maritime shipping passes through the Suez Canal each year.
Vessels transiting through the canal from east to west or from west to east
make significant savings in distance, time and operating costs. Moreover, the maritime transport is the cheapest means of transport, with
more than 80 % of world trade volume transported via waterways (seaborne trade).
Egypt has access to large key markets through various multilateral and bilateral trade agreements with the USA, European, Middle Eastern and African countries; which secures benefits to Egyptian-based producers supplying these markets.
PROXIMITY TO GLOBAL MARKETS
CONTRACT TO SHIP DATE – LEAD
TIME
75 Days
Compared to 90 days in Turkey and 120 days in the Far East
COMPLIANCE
One of the competitiveness of the Egyptian Apparel industry for exports is social compliance.
CERTIFICATION
Most of the Egyptian Factories are certified Wrap Most of the Egyptian Factories are certified ISO Some factories are certified OEKO-TEX
BETTER WORK PILOT IN EGYPT
From July to December 2017, Better Work pilot implemented the second phase of its services in approximately 30 factories, primarily in Egypt’s garment export sector, to improve working conditions and boost business competitiveness .
Established at the request of the Government of Egypt, the pilot engaged
the government, manufacturers and their associations, all trade unions, international apparel brands and their suppliers.
Egypt is allowed to manufacture and export its readymade clothes and
furniture to Walt Disney Company based on ILO decision .
Apparel Exports Destinations in 2018
UK 7%
108 M/USD
74 M/USD
Italy %5
Belgium 1.5%
25 M/USD
Netherlands 1%
18 M/USD
Spain 9%
143 M/USD
Total Exports to EU
541 M/USD
Accounted for 34%
Germany 6%
93 M/USD
France 3%
53 M/USD
EGYPTIAN APPAREL EXPORTS DESTINATIONS IN 2018
United States 50%
Europe 34%
of which:
Spain 9%
Turkey 8%
UK 7%
Italy 5%
Germany 6%
Rest of the World 12%
France 3.3%
Belgium 1.5% Netherlands 1.1%
TOP 10 EXPORTING COMPANIES TO THE U.S. & EUROPE IN 2018
1-Lotus Garments. 2-Alex Apparels For Readymade Garments 3-Jade-Apparel-Industries 4-Giza Spinning & Weaving Co. 5-T & C GARMENTS 6-Delta Textile Egypt Factor y 7-Embee International Ind 8-Stars Fashion 9-C R S Denim Garments Egypt 10-Kazareen for Textiles 9-
1-Swiss Garment Company 2-Eroglu Egypt 3-Dice Sport And Casual Wear Factory 4-Velocity Apparelz 5-Jade-Apparel-Industries 6-Eurotex for Garments 5-C R S Denim Garments Egypt 8-Espranto Jeans Co. 9-Plaza Ready Made Garments Ind. 10-Iemco Garments Company
To the United States To Europe
APPAREL WORLD FACTOR COSTS COMPARISON IN 2018 Factor cost in Major Apparel Exporting Countries
Egypt has the lowest production cost Electricity ( 7 US cent /kwh)
Monthly Wage rate at (115$)
TRADE AGREEMENTS
Qualified Industrial Zones (QIZ)- with Israel & the Unites States Egypt-EU Association Agreement. Egypt-EFTA Free Trade Agreement. EFTA (Iceland, Liechtenstein, Norway and Switzerland). Agadir Free Trade Agreement. Greater Arab Free Trade Agreement (GAFTA). Pan Arab Free Trade Agreement. Common Market for Eastern and Southern Africa (COMESA). Egypt Turkey Free Trade Agreement. Egypt-MERCOSUR Free Trade Agreement.
QIZ PROTOCOL: KEY FACTS
924 881 820 824 850 691 729 797
2011 2012 2013 2014 2015 2016 2017 2018
Apparel exports under QIZ In M/USD
WHY SOURCE FROM EGYPT?
Commercial Ports (16)
Quality Control
Experienced Managers
Competitive Power Cost
12- Day Lead Time
ACCREDITATION
Egyptian Apparel Exporters are complied with Global quality, health, safety and environmental standards .
TEXTILE SECTOR STRATEGY VISION 2025 Egypt to become the leading exporting MENA country in the Textiles industry, focusing on high and medium value added products catering to the world’s largest retailers and manufacturers with reliable and agile delivery.
STRATEGIC OBJECTIVES
Creation of 1 Million New Job Opportunity
Train 750,000 Workers, Supervisors and Managers
Increase exports to achieve USD 10 Billion
Attract local and Foreign Investments of USD 13.5 Billion
Increase the Value-Added to 70% of locally manufactured raw materials
STRATEGIC FOCUS
Expanding the Industrial Base through Developing and Enhancing the Competitiveness of local industry
Backward Vertical Integration of Industry, promoting investments into primary textiles and fiber production
Foster Export’s growth and market entry
Focus on Human Capital Development
Reform of Government policy
Upstream Downstream
INCREASED UPSTREAM & DOWNSTREAM
INVESTMENTS
Yarn
Fabrics
Apparel
Dyeing
&
Finishing
Home
Textile
Accesso-
ries
CORPORATE SOCIAL RESPONSIBILITY
”Your Job Next Door Initiative “
Contributing to the development of Upper Egypt through introduction of apparel production unites in small villages, The idea is creating small production unites in rural areas and areas where the unemployment rate is high, each unit will be adapted and supported by the big manufacturers in terms of quality, management, know-how and training as well as orders will be given to these unites to ensure their sustainability for 2 years, the main aim is creating a level of youth entrepreneurs and new job opportunities
The first phase of the project succeeded to establish 12 production units in Qalyoubia
Governorate, providing 1,000 direct jobs and 4,000 indirect ones. The production capacity of these units is between 60 - 70 thousand pieces per month per unit.
On the other hand, the council signed protocol with the Governor of Kafr El-Sheikh to
create another pilot of the initiative which aims at establishing 8 production units. Each factory includes about 70 to 80 machines according to the capacity of the factory to provide job opportunities from 200 to 300 workers.
INITIATIVES
“AECE and Textile Export Council Signed Memorandum of understanding with L ’Union des Industries Textiles UIT – France”
On the 12th of November 2017, AECE & Textile export council signed MOU with UIT to enhance and promote bilateral trade and industrial cooperation in the textile & fashion sector.
“AECE Export Council Signed a cooperation protocol with Confederation of Tunisian Citizen Enterprises CONECT– Tunisia”
On the 20th of December 2017, AECE export council signed cooperation protocol with Confederation of Tunisian Citizen Enterprises “CONECT “in Tunisia to enhance and promote bilateral cooperation in the field of foreign exhibitions and exchange of technological expertise in the apparel and fashion sector.
INITIATIVES- CONTD.
Supporting Small & Medium Enterprises “Joint Cooperation with upcoming USAID project TO”
Apparel Export council organized a meeting between number of SMEs companies and Chemonics Int. (one of the largest USAID consultants and project executors) to gain insights into the technical assistance or other needs to grow their exports.
Destination Africa 3rd Edition November 2018
Following the success of the Pan-African B2B textiles sourcing event in 2017, Destination Africa 2018 in its 3rd Edition Succeeded to attract 52 Egyptian and African manufacturers, 250international buyers from Top international Brands like Guess - Koton – Hugo Boss - Croccodillo - Perry Ellis – LPP - Li & Fung - Jerry Leigh - Cricket & Co – Pimkie - Haggar - Spring Near – VF – PVH – KIK - G Star with anticipated sales of $50 M.
Textiles, Apparel and Home Textiles Export Council of Egypt – Apparel Sector
Contact us at Address: 166 El Choueifat St.,Off El Tesaeen road,Fifth Settlement, New Cairo Tel/Fax: (+202)25656036 Mobile: (+202) 01000756728 Email: [email protected]
Website: www.rmgec-egypt.com Facebook : https://www.facebook.com/ApparelExportCouncil