The Ministry of Investment will spend LE900 million within its restructuring scheme to help six public-sector textiles companies to offset their losses. Each company will receive LE150 million.
The Spinning and Weaving Holding Company (SWHC) has 35 affiliated companies, 26 of which incur on average LE2 billion in losses every year. An SWHC official projected that through the scheme, the losing companies will achieve a break-even point in 2011.
The SWHC source said that total textile sales dropped from LE2.16 billion last year to LE1.34 billion this year. "China produces eight million tons of cotton every year, India five million tons and the US 2.8 million tons," he explained, saying that Egypt’s production could not compete with these figures.
"The government didn’t include the textile industry in its reform policies," he added. "Today, the industry is slowly dying."
In the sixties, Egyptian cotton was called "white gold" and there was great demand for it. Today, textile companies prefer to buy imported cheap cotton and produce low-quality textiles.
"Textile companies have huge debts. If we ban cotton imports, they will all close down," said Ahmed el-Bosati, chairman of Nile Cotton Company.
Industry expert Hassan Ashara held the government responsible for the problem. "Its policies are all wrong, from the cultivation stage of the cotton to its final product," he said.
Translated from the Arabic Edition.