Turkish textile manufacturers are increasingly turning their gaze toward Egypt as the North African country’s currency weakens, presenting a promising landscape for investment.
With Turkey grappling with a robust currency and higher minimum wages, Egyptian reforms and a nearly 40% depreciation of its currency have sparked interest among Turkish businesses.
Egypt’s emergence as an alternative manufacturing hub stems from its recent currency devaluation and lower energy costs, factors that have significantly enhanced its competitiveness.
Seref Fayat, head of the apparel division at Turkey’s Union of Chambers and Commodity Exchanges, highlighted Egypt’s adoption of “rational” policies as a pivotal factor driving Turkish businesses’ interest in the region.
Turkish textile exports have faced headwinds, exacerbated by a strengthening lira and declining exports.
The Turkish Textile Exporters’ Association reported a decline in textile exports during the initial months of 2023, extending a downward trend observed in 2023.
For Turkish manufacturers, Egypt’s advantageous position offers a glimmer of hope amidst domestic challenges.
The relative weakness of Egypt’s currency not only bolsters its appeal but also presents an opportunity for expansion and investment in the North African nation.
Investors see Egypt as a viable option despite longstanding concerns regarding state-dominated enterprises and bureaucratic hurdles.
Ramazan Kaya, head of the Turkish Clothing Manufacturers’ Association, emphasized the need for a significant depreciation of the lira to compete effectively with Egypt.
Yesim Group, a Turkish textile manufacturer renowned for its global brands, has been invested in Egypt since 2008 and contemplates further expansions.
The allure of a free trade agreement with the US and substantially lower labor costs in Egypt presents an enticing proposition for Turkish companies eyeing international growth.
As Turkish textile firms recalibrate their strategies, Egypt emerges as a beacon of opportunity amidst currency fluctuations and economic uncertainties.