Owners of some 550 textile factories in Mahalla decided to close down their factories and send the keys to the prime minister and the trade minister after the government failed to resolve yarn supply shortages.
They had demanded that the government ban yarn exports, subsidize yarn prices so as not to exceed LE6000 per ton and abolish custom duties on imported yarn until the end of this year.
The shortage and price increase of raw materials put too much pressure on factories, said a member of the Assembly of Textile Factory Owners after a meeting held last week between manufacturers and ministers.
Mohsen al-Jilany, president of the state-owned Holding Company for Spinning and Weaving, refused to meet with the factory owners and rejected their demands. Jilany said he would impose anti-dumping duties on imported cotton and refused to halt yarn exports, saying the move would expose Egypt to fines up to LE500 million for cancelling contracts.
In related news, more than 150 factories in Alexandria's Mergem industrial district are threatened with bankruptcy due to continuous labor strikes and the absence of security, which has led banks to stop issuing the factories credit.
Dr.Mohamed Moharram, chairman of the energy committee in the Mergem Investors’ Assembly, said the situation must be resolved immediately.
Tarek al-Halogy, chairman of Export Development Bank of Egypt's Alexandria branch, said the only solution is to end labor strikes and reinstate of security.
Translated from the Arabic Edition
