Egypt’s Suez Canal Zone Attracts New Garment Factory with $40 Million Investment

Fashnopsis:

• Egypt’s Suez Canal Zone inks $40 million deal for new garment factory.
• Project aims to make the zone a regional hub for clothing and apparel.
• Factory expected to create over 3,000 jobs and attract more Turkish investment.
• Egypt’s apparel industry is a major contributor to the economy, and market is forecast to grow.
• Government plans to modernize the sector and boost exports.

SCZONE Signs Land Agreement for New Garment Factory

The General Authority for the Suez Canal Economic Zone (SCZONE) announced a significant development aimed at strengthening the region’s apparel industry. A land usufruct agreement, valued at $40 million, was signed with Eroğlu Egypt. This agreement paves the way for the construction of a brand new readymade garment factory within the Qantara West Industrial Zone.

This project aligns with SCZONE’s vision of transforming the zone into a leading regional hub for the clothing and ready-made garments sector. Egypt’s strategic location, particularly its proximity to the Suez Canal, a global shipping powerhouse, makes it an ideal location for such an endeavor, as highlighted by data analysis firm GlobalData.

Egypt’s Apparel Industry: A Powerhouse of the Economy

According to GlobalData’s “Macroeconomic Report: Egypt,” the textile and apparel industry holds immense importance for the Egyptian economy. It’s the nation’s second-largest industrial sector, contributing a significant share – 8% of exports, 34% of industrial production, 10% of the workforce, and 3.4% of the GDP.

The new garment factory is anticipated to create over 3,000 new job opportunities, further bolstering the region’s economic activity. SCZONE chairman Walid Gamal El-Din emphasized the factory’s significance in attracting Turkish investments. He revealed that this project is one of six currently under consideration for implementation in the Qantara West Industrial Zone, aiming to attract a total of 15 Turkish projects.

Strong Trade Ties Between Egypt and Turkey

Data from a 2023 GlobalData report on Egypt’s macroeconomic outlook sheds light on the strong trade ties between Egypt and Turkey. The report indicates that in 2023, bilateral trade amounted to $5.7 billion, with Turkish imports reaching $3.1 billion and exports to Egypt valued at $2.6 billion.

Promising Growth on the Horizon for Egypt Vision 2030

This development comes amidst a promising outlook for Egypt’s apparel market. A separate GlobalData report, titled “Egypt Databook: Menswear – Brand Shares, Market & Sector Summary & Forecasts to 2025,” predicts the region’s apparel market value to reach EGP184.2 billion (approximately $3.9 billion) by 2025, reflecting a growth from EGP158.9 billion in 2023.

Favorable Environment for Garment Industry Growth

With an estimated 2,500 existing garment factories and a workforce of 1.5 million earning an average wage between $175 and $1048, Egypt’s apparel industry presents a significant economic force. Recent improvements in the ease of doing business and declining interest rates create a favorable environment for further industry growth. The government’s “Sustainable Development Strategy (SDS): Egypt Vision 2030” further strengthens this commitment by outlining plans to support the textile and apparel sector through modernization efforts and stronger integration between textile and apparel production.

Source: Just-style/ Globaldata