Losses gradually reduced in Egyptian textile sector
Companies operating in Egypt’s textile sector continue to incur heavy losses, although their situation has somewhat moderated. According to Al-Ahram, the losses of 36 public companies active in the textile industry fell to 800 million Egyptian pounds in 1999, down from EP 1.1 billion in 1998. That year the companies were carrying EP 5.8 billion worth of bank debt.
One company in particular was responsible for lion’s share of the bank debt. Al-Ahram reported that the losses incurred by 10 subsidiaries of the Textile and Spin Holding Company represent 75 percent of the total losses incurred by public sector.
Another company in trouble is the Helwan-Misr Textile Company, which recently formulated a two-year long restructuring plan. This plan sets as a target EP 317 million turnover and a EP 36 million operating profits. It involves injecting EP 115 million into new investments that are geared to renew and develop the company’s factories. The plan also consists of slashing the company’s labor from 6,220 to 3,188 workers.
In addition to the public sector, reported Al-Ahram, there are currently 2,356 private companies that are operating in the field. Most are registered with the Egyptian Textile Manufacturers Association. The local textile and spin sector employs one million workers, which is equivalent to 30 percent of the labor force employed by the industrial sector as a whole.
Egypt's textile industry was fast developed in the 1920s, although the earliest modern weaving establishment was established in 1989. Traditionally, the chief textile centers have been located at Mehalla, Kafr A1 Dawar, Shubra A1 Kheima (Cairo), Helwan and Alexandria. Newer establishments have recently located in the new industrial cities of Amereya, Borg El Arab, 10th of Ramadan and 6th October. ¯ (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)