Textile Sector in Egypt – Case Study – May 2025

Introduction

The textile industry has undergone a profound transformation since the invention of the cotton gin in the 18th century. Historically, it played a foundational role in the industrialization of many countries, especially Western countries, becoming a key pillar in employment and economic development. Over the past few decades, however, this once West-dominated sector has increasingly migrated to developing economies, where labor costs, infrastructure, and supportive trade and incentives have turned the industry into a major pillar for the economy of developing countries. Developed regions like the European Union and the United States have experienced a steep decline in textile production, while countries across Asia, and more recently, Africa, have emerged as new favorable destinations for textile factories. Fast-growing economies such as Vietnam, Turkey, Bangladesh, and Egypt are rapidly increasing their market share and relevance in this market.  

ABOUT THE TEXTILE INDUSTRY IN EGYPT

The textile sector in Egypt is one of the nation’s oldest industries, with roots that date back to ancient civilization around 5000 B.C. Beyond its historical significance, the textile industry continues to play a vital role in Egypt’s modern economy and cultural identity. It remains one of the country’s most important industrial sectors, due to Egypt’s excellent capability of producing high-quality raw materials, particularly Egyptian cotton, which enjoys a prestigious global reputation. Today, the textile and clothing industry is the second-largest industrial sector in Egypt, following the F&B (Food and Beverages) industry. It accounts for around 25% of the apparel sector Egypt hosts the largest and most productive cotton and textile clusters on the African continent, as the entire production process - from the cultivation of raw materials (mainly cotton) to the manufacture of yarns, fabrics, filament yarns, and fibers, and the production of ready-made garments - takes place in Egypt. With a volume share of about 75 % of natural fibers, cotton is by far the most widely used natural fiber for home and apparel textiles. The spinning and textile sector is one of the most important export sectors in Egypt, as Egypt’s exports of raw cotton during FY2021/22 amounted to about USD 156 million, and Egypt’s exports of ready-made clothes increased by 42% during FY2021/22. Recent trade data indicates that nearly 90% of Egypt’s textile sector exports are unprocessed cotton. Within the Agadir Free Trade Agreement framework, Morocco emerges as the primary importer, receiving roughly 58% of Egypt’s total fiber exports. In terms of product segmentation, cotton textiles account for the largest share of Egypt’s textile exports at 40%, followed by nonwovens. Woven products represent approximately 20%, while synthetic fiber textiles comprise around 15%.

WHY TEXTILE IS A STRATEGIC SECTOR

1- Egypt’s textile sector stands out as a compelling destination for investment, with the help strategic location, and supply chains. 2- While the initial capital required to establish textile manufacturing facilities can be significant, Egypt mitigates these challenges through the development of specialized industrial zones, most notably Al Sadat City. These industrial cities and zones provide “plug-and-play” infrastructure, enabling easy setup and operations while reducing long-term overhead costs. 3- A core strength of Egypt’s textile industry lies in its vertically integrated ecosystem. From cultivating high-quality Egyptian cotton and raw materials to spinning, weaving, dyeing, and producing finished garments and home textiles, the entire value chain is available domestically. 4- Additionally, major investments are being guided into advanced technologies, systems, and sustainable production methods, reflecting Egypt’s commitment to aligning with global standards. The Suez Canal Economic Zone (SCZone), in particular, is emerging as a focal point for industrial projects aiming to establish in Egypt. 5- The textile and apparel sector contributes significantly to Egypt’s economy, accounting for approximately 16% of the country’s manufacturing value added. It encompasses a mix of state-owned enterprises and a big private sector. 6- A milestone event underscoring Egypt’s rising prominence occurred in January 2025, when Elsewedy Industrial Development, subsidiary of Elsewedy Electric, signed a $60 million agreement with China’s Kingdom Holdings, a prominent player in the global textile industry. The partnership, supported by the Egyptian Commercial Service (ECS) and facilitated by the General Authority for Investment and Free Zones (GAFI), will establish a private free zone within Industria Sadat. This project includes a 50,000-square-meter, state-of-the-art textile production facility designed to leverage advanced manufacturing capabilities and contribute to Egypt’s long-term vision of industrial excellence.  

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