Turkish textile manufacturers are considering shifting their investments to Egypt due to its currency devaluation and promised reforms, Bloomberg reported on Monday.
Egypt’s recent devaluation and record rate hike have put it in reach of an IMF deal,making it an attractive option for Turkish producers facing challenges such as a higher minimum wage and a strong currency.
Egypt’s nearly 40 per cent currency decline and lower energy costs have made it a competitive manufacturing base, prompting Turkish businesses to explore opportunities there.
Turkiye’s apparel industry is facing headwinds, with textile exports declining and the lira’s strength hindering cost adjustments. Turkish companies are looking at expanding their facilities in Egypt due to its more favourable conditions.
Investors in Egypt have long faced challenges with state entities crowding out private enterprise, but recent changes and increased funding from international organisations like the IMF and World Bank are expected to address these issues.
Companies like Yesim Group, which has been manufacturing in Egypt since 2008, are considering expanding their investments there due to advantages like a free trade agreement with the US and lower labour costs.
Source: amwalalghad