Interview with Mohamed Kassem, Chairman of Egyptian Ready Made Garment Export Council
Textile exports to the United States represent 25% of non-oil exports and 20% of total manufacturing in Egypt. This is largely a result of the QIZ program, which has brought Egyptian and Israeli companies together in business.
What do you feel were the key factors that led to Egyptian textiles becoming the backbone of the countries exports?
Egypt has had a long history of textile manufacturing and we have one of the best cottons in the world. However, we are a late-comer to the government sector. Our goal is to increase from the $2.5 billion in exports that we are currently producing to $10 billion. Our strategy is channeled through our “Vision 2025” in which we expect to be hitting that $10 billion goal. To get there, we want to attract upstream investment in spinning, weaving, buying, and finishing as that is the backbone of the government owned textiles. Currently, most of our exports are dependent upon importation of yarn and material. We want to reduce this dependency on importation.
What markets do you feel are the most important for the country?
Our major markets are the EU and the US. We see a potential increase in new markets such as Asia but this is still in its early stages.
Going from $2.5 to 10 billion a year in textile exports is a huge jump. How will Egypt compete with other markets such as the Asian market?
Right now the international textile trade is around 350 billion US dollars. That is expected to increase to $700 billion by 2025 in a space of 10-11 years. Currently, China sees the lion’s share of that trade at about 40 percent. Others players are India, Bangladesh, and Vietnam, but with China and India’s rapid economic tangent with the growth of its middle classes, there will be little room for export growth in those populous countries. The experts predict that an increase of local consumption in these places will take away from their export drive. However, the demand will be very big, so it will not be difficult to reach our goal if we do our job right.
Are there plans to import cotton from other countries to achieve your goal of going from $2.5 to 10 billion in exports?
We will have to use other materials. Our Egyptian cotton is what they call the “extra-long staple”. The demand for this type of cotton does not exceed 3-4 percent of the total demand of all fibers. To be a major player, other fibers including short staple cotton must be used. You cannot use an expensive Egyptian cotton to produce cheap yarn. To produce denim or T-shirts, thicker, coarser yarn is needed. The finer Egyptian cotton is used for bed sheets and more expensive shirting. At the end of the day, the products made with Egyptian cotton are a niche market. Our goal is to expand our supply chain to produce fine yarns and fabrics, but all of this won’t account for much because the
demand for that niche is not huge. To be a player in this market, you need to play the game that everyone is playing.