Prime Minister Ibrahim Mahlab ordered Saturday the formation of a committee including the Ministers of Planning and of Investment to restructure the textile sector and provide public spinners the required quantities of cotton, Youm7 reported.
Over governmental efforts to flourish the textile sector and end its crisis, Mahlab directed the formed committee to provide the employees their due wages before the end of the holy month of Ramadan.
During his meeting with the Ministers of Planning, Local Development, Housing, and Investment, and a number of textile sectors’ officials, Mahlab called for the necessity to remove the sector obstacles, support the public spinners, and attract new investment.
Forming the committee is within the Cabinet’s new strategy to restructure the public sector, especially the textile sector. The government planned on finishing the textile factories’ infrastructures and providing public spinners the needed finance to restore its productivity.
In the past few years, the textile sector suffered many problems represented in the lack of cotton production, harsh decline in cotton exports, declining national consumption, and a wide-range of employee strikes and protests for not getting their financial dues.
In May 2014, the Central Agency for Public Mobilization and Statistics (CAPMAS) monitored a 46.5 percent decline in cotton exports, totaling at 126,600 metric kantars compared to 236,800 kantars during the same period last year.
Egypt’s consumption of local cotton edged down sharply by 79.9 percent, totaling at 81,600 kantarsduring the second quarter of the current agricultural year, compared to 504,400 kantars in the previous year.
To promote the national consumption of cotton, the government would provide 200 million EGP ($28 million) to support public spinners and allow them to purchase Egyptian cotton. They refrain from purchase Egyptian cotton for its high prices of 1,300 EGP per kantar while imported would be 750 EGP, Al-Mal Business daily previously reported in May. The public spinners would get a 200 EGP subsidy for each consumed kantar.
The government is preparing to offer a number of public sector companies to the Egyptian Stock Exchange EGX as to provide the needed liquidity to restructure the sector and provide the public spinners subsidy, Al-Masry Al-Youm reported in May.
The success of Initial Public Offerings at EGX late May comprised of the Sabaa International Company for Pharmaceutical and Chemical Industry and the Arabian Cement Company. Subscription requests increased to 26.8 and 18.5 times over respectively. The government will offer part of the Public Spinners shares at EGX, Minister of Trade and Industry Mounir Fakhry Abdel Nour said.
“Besides offering part of the Public Spinners shares at EGX, the government is working on redrafting the investment measures and transferring the textile sector’s factories and spinners from the public sector to a will established sovereign fund,” he added.