Egyptian ready made garment industry road show help win orders from international brand

The Egyptian garment sector has an important role and accounts a big part in its economy. At an event in Manhattan, New York, around 28 Egyptian ready-made apparel companies presented the case for investing in garment production in Egypt. The advantages in quality, design, relatively low-cost labor, warehousing and vertical manufacturing have won Egypt’s 260 ready-made garment manufacturers orders from well-known international brand names as Aeropostale, Calvin Klein, Disney, Gap, Hanes brands, J.C. Penney, Macy’s, Nautica, Timberland and Zara.

The Seven “Qualifying Industrial Zones” (QIZs) created in Egypt since 2008 allow garments manufactured in Egypt to be exported to the U.S., a market with high tariffs on apparel imports, duty free.

Due to the outbreak of unrest in 2011 the industry was hit by 6 percent decline in production. However, this reduction came on the heels of previous year-on-year growth in sales to the U.S. of 7.8 percent. With the recent depreciation of the Egyptian currency, the country’s improved price advantage helped garment exports rebound by 16 percent in the first half of 2013, as the country started returning to stability and a new constitutional order.

While Egypt is not in the top ranks of apparel exporters to the U.S. such as China, Vietnam and Bangladesh, it is one of the largest producers in Africa exporting more than 340 million pieces annually without any of the acute occupational health, safety and human rights liabilities encountered in the prime exporting nations. Egypt’s comparative advantages lie in its geographic position, superior capabilities to deal with complex designs, and relatively low labor costs.

The garment sector accounts for a quarter of non-oil exports, one fifth of total manufacturing exports, and half a million jobs – roughly 25 percent of manufacturing employment to its economy. In addition to its natural competitive advantages and strong government support for the growth of a sector whose production is 75 percent privately owned, a number of potential efficiency improvements represent low-hanging fruit for potential strategic investors.

Opportunities exist to capture more of the value chain by better integrating domestic cotton production, fabric production and dyeing with the garment manufacturing.

According to Egyptian Ready-Made Garments Export Council chairperson Mohamed Kassem, he is was pleased with the level of interest attracted by his members’ U.S. visit, despite it all — the unrest and insecurity of the past few years — the Egyptian business community continues to lead the way by doing its part to create jobs and attract foreign direct investment.

Working with business leaders like the American Chamber of Commerce in Egypt, the Ready-Made Garments Export Council will meticulously work to promote sound economic policies that encourage foreign direct investment and job growth as they believe that economic opportunities must go hand-in-hand with efforts to restore political stability and the rule-of-law.

Egypt’s revolution and transition to democracy, like others throughout history, is a work-in-progress and will take time.