Could Egypt be the next garment producing hub by 2035?

In the first four months of 2025, Egypt’s readymade garment (RMG) exports reached the milestone of crossing the 1 billion US dollar mark. After food and beverages, the textile and garment industry is the second-largest industrial sector in Egypt today. In 2024, the country’s textile exports grew by almost one fifth (18 percent) to 2.84 billion US dollars (800 million generated by denim exports), driven by demand in markets such as Europe, USA and Africa. According to modernisation plans by the Egyptian government, that number is to reach an ambitious 12 billion US dollars by 2031.

But is that number really ambitious or is the Egyptian textile and garment industry simply on a growth trajectory, spurred on by many advantageous factors? According to industry experts, the country could become the next sourcing hub by 2035 to 2045.

“Demand is definitely growing much faster than supply. For me, that makes Egypt a centralised hub for production within the next, optimistically, 10 to 20 years,” said Taha Sharabati, director of weaving and denim dyeing at Sharabati Denim, at the first “Inside Denim — Raw Talk” webinar on Wednesday.

According to Magdy Tolba, chairman of T&C Garments Egypt, a 2010 joint venture between Egypt's Tolba Group and Turkey's Taypa Group, there is no reason why Egypt should not reach 40 billion US dollars in apparel exports in the future and be on par with garment-producing countries likes Bangladesh.

“Egypt actually has the biggest potential,” he said at the Denims and Jeans show in Cairo in February 2025. “We are in middle of of the world; logistics are the best, we are in the middle between the Far East where most of the raw materials are coming from, and the major markets, which is Europe and the United States,” he added.

FashionUnited has taken a closer look at the country’s strategic advantages.

Egypt’s strategic advantages

Number one: location. Just across the Mediterranean Sea, Egypt is in a favourable spot for the European market. In addition, its proximity to the Suez Canal and the Red Sea makes it easy to ship products worldwide. For example, routes to the US take 12 days compared to over a month from Asian ports.

Number two: a young and growing workforce. Close to three fifths (58 percent) of Egypt’s population of around 118 million people are currently under 30 years old. Around 1.5 million of them, of which 50 percent are women, are employed in the more than 2,500 apparel factories.

Number three: a skilled workforce. Given roots that date back to around 5000 BCE, the country’s textile sector has a long history. Apart from spinning and weaving to garment production, the government ensures that vocational training programs keep improving skills within the industry.

Number four: vertical integration. Again stemming from the long textile and garment tradition, the entire value chain is available in Egypt: from the cultivation of raw materials (mainly cotton) to the manufacturing of yarns, fabrics, filament yarns and fibres to the production of ready-made garments and home textiles. Due to its long staple fibres, Egyptian cotton is known for its durability and soft feel, making it a popular export good.

Number five: low wages. Despite the advantageous location, Egypt does not come with the high wages that one finds in Europe. In fact, with monthly wages between 140 and 240 US dollars per month, Egypt has an edge over closer sourcing destinations like Turkey and Eastern Europe and further ones like Bangladesh, Pakistan, India and Vietnam.

Number six: cheap electricity. Electricity costs in Egypt hover around 7 cents a kilowatt-hour compared to three to four times that amount in other sourcing destinations, China for instance. While a majority (88 percent) of the electricity generated is dependent on fossil fuels, Egypt's per capita carbon emissions remain below the global average. In addition, the country is committed to increasing its share of renewable energy sources from currently around 7 percent (mainly from hydropower) to 42 percent by 2035.

Number seven: domestic investments. The country is currently making major investments in advanced technologies (such as textile digital print machinery), systems and sustainable production methods to show its commitment to align with global standards, particular EU legislation as the EU is the country’s main export destination for textiles (35 percent), followed by Turkey (30 percent), Middle East and North Africa (MENA; 23 percent) and Africa (10 percent).

Number eight: infrastructure. Among those investments are those in the country’s infrastructure to attract international investments and to establish Egypt as a sourcing destination. Thus, the country is promoting special economic zones like the Suez Canal Economic Zone (SCEZ). Established in 2015, it encompasses over 461 square kilometres and is strategically located at the intersection of major international shipping routes along the eastern and western banks of the Suez Canal. It includes a new major expressway linking East Port Said to the regional network, six new road and rail tunnels, seven underwater tunnels under the Suez Canal to link Sinai Peninsula to Egypt's mainland, as well as power, water and telecommunications networks. Nine planned factories and two service centres were announced in March of this year among textile clusters earlier.

Number nine: international investments. Miffed by additional US tariffs on China and growing wages, China has been looking for alternative sourcing locations in Bangladesh, Vietnam and Myanmar for a while. With its many advantages, Egypt fits the bill as well and secured about 70 million US dollars from Chinese textile companies in June 2025 alone, among them Zhejiang Holding and Jiangsu Haite Fashion Company. Jiangsu Guotai signed an agreement in March 2025 for a 10 million US dollar garment factory in the Suez Canal Economic Zone.

For Turkey too, Egypt is a strategic destination just across the Mediterranean Sea and many Turkish garment companies already have investments in Egypt. Moving machinery to Egypt to expand their current production capacities is already underway, and according to Sharabati, they could be up and running within the next six months to a year. In terms of textile mills, he estimates two to three years because it is a larger investment and not as easy to set up.

Number ten: strategic trade agreements. Last but not least, agreements like the Egyptian Qualified Industrial (QIZ) Zone and duty-free market access to the EU work in Egypt’s favour. In addition, along with Turkey, Morocco and others, Egypt has been freed from any exceptional US tariff, keeping it to the minimum plus ten percent.

Conclusion

In view of several existing textile clusters located near major cities such as Cairo, Alexandria and Port Said and planned clusters and industrial zones in view of a growing demand of Egyptian-made garments, both domestically and internationally, Egypt is emerging as an attractive sourcing location. In addition, a large pool of skilled labour and easy access to raw materials make it easy for companies to establish a base here - for example global design and manufacturing company Delta Galil Industries.

“With many factories moving to Egypt, that is only positive for Sharabati and for any brand that wants to work in Egypt. Having more companies in Egypt will help infrastructure improve and will create more of a centralised location for garments. You can have all the trims, the accessories, the buttons at production locations in Egypt, which creates a full ecosystem around garment production in Egypt,” summed up Sharabati.

“We are honestly very happy to have many people come to Egypt because it is going to make Egypt a safer location for many of the brands that want to produce in Egypt and want to have multiple different suppliers," he added.

While it remains to be seen if Egypt will establish itself as one of the major sourcing hubs within the next ten years, it seems well on the way.