LE 300 Million for Textile Companies in Egypt

The cabinet decided on 8/10/2012 to allocate a sum of LE 300 million for restructuring spinning and weaving companies. The Cabinet said there will be no return to privatization policy, adding labor will not be laid off if some loss making companies are liquidated. Minister of Trade and Industry Dr. Hatem Saleh said following a meeting with Prime Minister Dr. Hisham Qandil, the ministers of finance, investment and international cooperation that the government is keen to maintain the industry of spinning and weaving as it enjoys relative privileges in terms of labor intensity and low investment cost.

The Minister said the meeting discussed how to capitalize on land which is owned by some spinning and weaving companies within the framework of restructuring efforts. He said these companies are expected to be divided into profit making companies whose profits would be maximized and loss making ones which can not be restructured. He said there are many alternatives for dealing with these companies including partnership with private sector or liquidation to minimize losses drain.

The Minister said selling assets would not be as previously, adding the government would resort to partnership. The Minister said the meeting did not touch on privatization adding there will be cooperation with the private sector to restructure companies. He said efforts are underway to tackle the conditions of 430 faltering factories of which 90% are having problems with Banks and 10% are having license problems. He said this problem will be addressed soon. Meantime, the Prime Minister has decided to launch a website including facts and information about the social and economic conditions of all categories of the society.