According to Diego Melado, Head of the EU delegation in Cairo industrial modernization unit, the first €19.5 million have been earmarked by the Ministry of Investment to help restructure the sector and retrain workers. The €80 million grant will be paid in four installments, ending in 2008 with objective of supporting the Egyptian government with its privatization program of the Public sector spinning and weaving companies. Meanwhile, the Egyptian Ministry of Investment has received offers from local and foreign investors to purchase Shebin El Kom and Delta spinning companies which are considered the 5 th and 6 th largest spinning companies in Egypt. With the Governmental program for privatization of the Public owned spinning facilities, the private investment spinning companies will become the main dominant manufacturing factors within the Egyptian spinning industry except Misr Spinning and Weaving (Mahalla), which is said to be the Egypt upstream textile hub. The exports of Egyptian Cotton Yarn in year 2004 have decreased by 20% compared to year 2003 and reached 32,872 tons. The exports were negatively affected from the Egyptian Cotton Fiber dilemma during year 2003, during which there was lack on availability of the Egyptian Cotton Fibre. The problem was created due to the decreased of the Egyptian Cotton crop planted area and at the same time the disavailability of reserves of long staple varieties (Giza 80 and Giza 83), which are suitable and demanded by the Egyptian spinning mills. Consequently, the shortage of the Egyptian Cotton Fibre, affected the production capacities by not reaching their production levels of 2002 and 2003. Meanwhile the imports qualitative restrictions, such as fumigation and custom duties, limited the imports of other qualities of Cotton Fibre, and affected the utilization of the production capacities in the Egyptian Spinning Sector in year 2004. The Egyptian spinning industry is the 2 nd largest industry in the Euro-Mediterranean region. Egypt , in spite of its superior raw material, has obviously been unable to exploit this advantageous position to its best capabilities. On the contrary, Turkey, which represents 34.75% of the total amount available in the region, with 6,337,600 Ring spindles in year 2003, has seen an upswing on investments during the last 10 years clearly explains that Turkey has taken up the chances offered and improved its machinery status within the spinning industry.
The EU assistance aims to prepare the platform for investments in the Egyptian Spinning Sector in order to explore and efficiently develop the available advantages of the Egyptian Spinning Industry and integrate within the Euro – Mediterranean Textile and Clothing Industry.

Date:3/1/2005

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