Egypt Attracts Turkish Garment Investors with Low Wages and Export Benefits

 

Egypt Attracts Turkish Clothing Investors

 

Egypt Attracts Turkish Garment Investors with Low Wages and Export Benefits

Turkish textile and clothing companies have begun moving part of their production operations to Egypt in an effort to reduce costs and address mounting challenges in Turkey, including inflation, rising energy and labor costs, and exchange rate fluctuations, according to the Kohan Textile Journal.

Egypt is currently a prominent alternative destination, offering low wages (less than $150 per month), reasonable energy costs, its proximity to Europe and the United States, and free trade agreements, particularly the QIZ agreement, which allows Egyptian products to enter the US market duty-free.

Sherine Hosni, Executive Director of the Ready-Made Garments Export Council in Egypt, said, "Egypt provides a comprehensive service to investors, from reducing bureaucratic procedures to providing tax benefits and direct export support." However, this trend has sparked controversy within the Turkish textile sector. Haluk Akin, Chairman of the Turkish Ready-Made Garment Machinery Manufacturers Association (KOMID), warned of regulatory and logistical challenges in Egypt, stressing that "transferring customers forces us to keep up with them with services and equipment, but the structural differences between Egypt and Turkey cannot be overlooked."

Mustafa Başahan, Vice Chairman of the Istanbul Ready-Made Garment Exporters Association (İHKİB), also expressed concerns that overreliance on low-cost production could undermine innovation in Turkey, calling for the adoption of the "Italian model" based on branding, flexible, high-quality production, and a reliance on technology and digitization.

These developments come at a time when the Turkish ready-made garment sector recorded a more than 10% decline in exports during the first months of 2025, dropping to fourth place in Turkey's export rankings for the first time.

While expansion into Egypt may provide a temporary solution for some manufacturers, industry experts emphasize that maintaining Türkiye's competitiveness requires strategic solutions that include strengthening value chains, investing in human capital, and supporting sustainability and innovation.