Egypt is speeding up promotion of its special industrial zones where apparel can be made and exported duty free to the United States.
Post the launch of its Qualifying Industrial Zones (QIZs), in 2005, Egypt has seen several major U.S. companies such as Levi Strauss & Co., Walmart, Phillips-Van Heusen, Gap Inc., Nike and JC Penney set up manufacturing base in these designated areas here.
Key items made in the 15 special zones set up around Cairo, Alexandria and other areas are pants, T-shirts, shorts, tank tops, shirts, underwear, jackets and towels.
One advantage for U.S. manufacturers looking at manufacturing in these special areas is that there is not a yarn-forward or fabric-forward stipulation, as in other free-trade agreements, i.e. the yarn and fabric do not have to be made in the region to receive duty-free benefits.
Instead, special requirements are that 10.5 per cent of the product’s value must come from Israel, such as the zippers, buttons, fabric, trim or packaging material.
And at least 35 per cent of the value of a product must have local input (24.5 per cent Egyptian and 10.5 per cent Israeli). The 35 per cent minimum content can include costs incurred in Israel, Egypt or the U.S.
Ashraf El Rabiey, who manages the industrial zones in Egypt disclosed, “The importance of the QIZs is that it is a political program that is strongly supported by the United States, Israel and Egypt. Since January 2017, exports are coming back up where since the first nine months, they jumped by 9 per cent.”
Egypt has a many advantages as a clothing and textile hub as spinning and weaving of textiles has been around since the time of the pharaohs. Egypt grows some of the best long-staple and extra-long-staple cotton in the world that is used in high-end clothing, towels and sheets.
Today, Egypt has over 1,500 garment factories and 1.5 million textile and garment workers who deliver a high level of quality to the Egyptian product; besides the country has strong laundries that achieve a high level of fashion washes that are in demand.
