A

GLOBAL COUNTRY STUDY REPORT

ON

“Political and International Environment in Egypt’’

Submitted to

K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER

STUDIES, KAPDWANJ

IN PARTTICAL FULFILLMENT OF THE REQUIREMENT

OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

IN

Gujarat Technological University

Submitted by Faculty Guide

Mr. Jignesh Gondaliya

Assistant Professor

MBA SEMESTER III

K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER

STUDIES, KAPDWANJ

Affiliated Gujarat Technological University Ahmedabad

2012 - 2013

Mistry Mahammadirfan. A. 117240592008

Patel Tejaskumar. N. 117240592013

Patel Dhariniben. K. 117240592009

Patel Namrataben. D. 117240592016

Patel Pinkalkumar. D. 117240592021

Patel Bhavikaben .P 117240592022

STUDENT’S DECLARATION

We Irfan, Tejas, Namrata, Dharini, Pinkal, Bhavika, hereby declare that the report

for Global / Country report entitled “ political & international environment in Egypt

’’ is a result of our own work and our indebtedness to other work publications

references if any have been duly acknowledged.

Place: KAPADWANJ (signature)

Date: Mistry Mahammadirfan

Patel Tejas

Patel Namrata

Patel Dharini

Patel Pinkal

Patel Bhavika

I.

PREFACE

Being an M.B.A student, it is necessary to prepare a global country report. Their

object of practical training & knowledge is to develop atmosphere and all other

business practices.

The preparation of the whole report was a great opportunity for us to explore

ourselves to the practical field. All analysis done by us regarding the EGYPT

country could make us all confident enough & prove ourselves. We could come

out of the bookish knowledge.

Preparation of such type of report calls intellectual nourishment professional help

and encouragement. Due to report, we are exposed to the method and practices

being use in the field of applications.

II.

ACKNOWLEDGEMENT

Every student owes a great deal to others and we are no exception because

learning is a process which entails give and take, exchange of ideas and value

addition through discussions. So it gives us immense pleasure to be able to

express our gratitude to one and all who have contributed to the successful

completion of our project with a great learning.

First and foremost we would like to thank our project guide Mr. Jignesh

Gondaliya. He gave us an in-depth knowledge of the working of the GCSR report

and enhanced our understanding on its various aspects.

His invaluable and significant guidelines improved our outlook and contributed in

making our project a real learning experience. He also encouraged us to put in

our best efforts and bring out the beat of our abilities.

III.

EXECUTIVE SUMMARY

Egypt was the home of one of the most significant civilizations of the early Middle

East and was of one of the earliest urban and educated societies. However, he is

also severely criticize by others who point to his dogmatic style of law and the

damage that the collective system cause to Egypt’s long-term development

forecast.

Many Egyptians hope to see a more self-governing political agreement emerge

but severe economic difficulty mean that a more self-governing future any time

quickly is not very likely. Islam is the officer religion of Egypt. About 88% of

Egyptians are Muslims and in general Egyptians are quite secular.

Despite unrest in recent years, Egypt's political state today is stable and a

completely self-governing state is likely within the near future. Egypt was ruled by

many countries before establish self-government and today it is run by a multi-

party semi-presidential system where the executive power is divided between the

leader and the prime minister, although in practice the president tends to hold a

greater share of the power.

Egypt was the first Arab state to establish political relations with the state of Israel, after

the sign of the Egypt-Israel Peace Treaty. Egypt is a major power between other Arab

states and has always played a significant role as a mediator in resolve disputes between

various Arab nations as well as in the Israeli-Palestinian dispute. Egypt’s government,

under President Umbrae, has work hard over the last three years to pick up the pace with

regard to reform which aim to boost higher financial growth and reduce being without a

job.

The Egyptian Constitution provides for a strong executive. Authority is vested in

an elected president who can appoint one or more vice presidents a prime

minister and a cabinet. The president's term runs for 6 years. Egypt's legislative

body the People's Assembly has 454 members--444 popularly elected and 10

appointed by the president. The constitution reserves 50% of the assembly seats

for "workers and peasants."

In March 2007 Umbra introduced several constitutional amendments that would

increase presidential powers and more significantly ban any political parties

based on religion race or ethnicity. The amendments were put to a popular

referendum and despite low voter turnout and boycotts by opposition groups

passed with 75.9% approval. Political factors data such as tax policy, labor law,

environmental law, trade restrictions, and tariffs.

A country’s tax system has a significant impact on business activities conducted

in the country. These tax incentives in the form of a special tax treatment

otherwise included in domestic tax law or purpose designed law (e.g. investment

laws).Since 1971, Egypt has been providing investors, with many tax incentives

regardless of the legal form of their business activities (i.e. corporate or

unincorporated). In this structure of Egyptian tax system is direct versus indirect

taxes, and investments tax incentives, particularly corporate tax incentives.

Main changes to corporate income tax for Egypt:

The corporate tax base by eliminating provisions for special tax treatment

and introducing world wide income tax for residents;

Specific rules incorporated of calculation asset depreciation for new law,

over allowable depreciation claims there by increasing transparency and

reducing the discretionary powers of tax officials;

Establishment introduced to improve the certainty of tax rules governing

foreign companies market ;

Main changes in personal income tax for Egypt:

The top marginal tax rate reduced from 32% to 20% of egypt;

A personal annual allowance independent of social status and

The personal tax base for broadened by introducing residence-based on

foreign tax credits.

In Egypt, Tax revenue collected by central government and tax payable by

businesses structure. In this data for last years can be given that, in this data is

different country for the India and Egypt. Egypt country camper on % of GDP in

two years for the same and camper on India is lower GDP. Taxes payable by

businesses in total tax rate is Egypt 43.6 and India 61.8.In this condition for this

two country in more tax payable on India and Egypt is lower tax payable of

central government.

The Egypt labor law no. 12 from 2003 is the one who regulate the labor market of

Egypt. This new labor law has 257 articles regarding the legal aspects that

regular the Egypt’s labor market condition. The contracts of employment must be

in on paper in the Arab language and in 3 copies. Each of the copies must be

kept by the employee, the social insurance and the employer. The Egypt labor

law obliges the employers from the private sector to employ 5% from the total

number of people with disabilities at the Manpower Offices` offer.

A fixed contract has a period of maximum 5 years; in case that the owner and the

worker want a longer period of service, the worker has the right of terminate the

contract later then the 5 years but with no getting return. But the owner must be

notified with the most 3 months before. The labor contract must specify the trial

period; no employee must be kept in the try-out period more than maximum 3

months. In this charts data can be a Egypt labor force. Egypt labor force data

years to years change their. Labor force in Egypt country can be in increase firm

of their.

Environmental issues in Egypt are governed by Law No. 4 of 1994. This law

provide for the formation of an agency for the security and help of the

environment, the Environment Affairs Agency (EEAA).

Ships of any people off shore platform and any other company or agencies

official to look at or use natural marine resources are permissible to discharge

into the protective sea of Egypt any polluting substance resulting in harm to the

water environment. The Egyptian government has developed a five-year

environmental action plan (1997/98-2001/02) for violent the country's solid waste,

air and water pollution problems.

The stock of U.S. strange direct investment (FDI) in Egypt at the end of 1999 was

$2.2 billion, an increase of 8.7 percent from 1998. U.S. FDI in Egypt is strong

largely in the oil, developed, and banking sectors. Egypt has margins for most

services sectors in which it has made General Agreement on Trade in Services.

These margins place a 49 percent limit on foreign equity in structure and

transport services.

Foreign firms may own up to 100 percent of Egypt private insurance firms.

Investors acquire more than a 10 percent stake in an insurance company require

support from the Egyptian Insurance managerial Authority (EISA). A 2008

change to the insurance law made EISA more self-governing and strengthen its

role from organizational regulator to a risk-based and market-sensitive controller.

No foreign bank seeking to set up a new bank in Egypt has been able to get a

license in the past 20 years, and in November 2009, the Central Bank Governor

reaffirmed that no new banks would be given license. However, efforts to reform

the long-term three state-owned banks have been mixed, and the Central Bank

rejected privatization for the three banks in 2009 on the grounds that market

situation were not right. The banking reforms in the past five years have succeed

in notably falling the share of non-performing loans.

Despite the way of a February 2003 law to allow for new telecommunications

company in accords with Egypt's WTO commitment, Telecom Egypt continue to

hold a de facto control since additional fixed-line licenses have not been issued

by the National Telecommunications dogmatic Authority (NTRA).

The government is liberalizing naval and air transportation services. The United

States remains involved in replace the restrictive 1964 union with an Open sky

air services agreement. Egypt is working with the U.S. on transport security

issues at seaports and airports, and a joint note of sympathetic on the jug

Security idea is expected soon.

About 85 percent of lively pharmaceutical ingredients in Egypt are imported. In

2004 the government compact customs duties on most imports of

pharmaceutical inputs and products from 10 percent to 2 percent. Health system

influences on Egypt country per 1000 people in 2005- 2010 to compeer on Indian

country. But Egypt country is 1000 people in 2005-2010 for a 1.7 % health

system influences and Indian country is 0.9% health system influence.

A major customs tariff change took place in September 2004, basically reform

the Egyptian tariff organization within the environment of a full customs reform.

Tariff bands and items have been largely reduced, managerial and WTO-

incompatible ad-valor service fees eliminate and the average tariff rate has been

largely reduced (from 14.6% to 9.1%).

New laws presidential and ministerial decrees have been enacted meant at

developing the educational system in general by the most central law set up

over the past five years has been law 155/2007 concerning the teachers’

framework. This law improved teachers’ incentive by raising their salaries by

amounts up to 50% of the basic salary as well as introduce official approval

incentives up to 150% of basic salary.

In addition, a professional college for teachers was recognized with the objective

of initiate an assisting body to work on the execution of the national strategic plan

for the 2007-2012 pre-university reform. Egypt ensures the self-government of

university. Each university has its own nature and a private budget. Both the

board and its own chairman direct each university.

Even if a lot leftovers to be done, current infrastructure is already greatly

industrial and relatively capable. Infrastructure is critical to the development of

tourism and the appeal of new and foreign investors. Egypt has an excellent ICT

services which are key to a modern project base.

Waiting lists for fixed-line telecoms have almost left and Egypt has one of the

best subscriber growth rates for mobile phones in the county. Government can

be influence in railways, roads, water and wastewater, urban transport their all

influence by government in Egypt country. The Financial Times paper reported

in late 2008 that Egypt's public infrastructure—including schools, hospital and

public moving system--was in poor state.

A challenge in most low and middle income country remains finding ways to

allow the many actors in the health sector to address these basic health needs

more efficiently. A range of chapters examine by means of regular reviews

quantitative and qualitative analyses of existing data and country studies.

Approaches that ask hard questions use in order cleverly and engage key

stakeholders and institution is critical to “knowledge and responsibility” practice

that motivate successful execution of health services.

Egypt's calcified politics has long been judged an asset in a confused region but

as leader Hosing Umbra ages in office with no clear descendant investors are

wonder if it might be a liability Egypt's economy is still buoyant in spite of

ambiguity about whether the 81-year-old president will seek a sixth term in 2011

or lever his son into power or whether a dark-horse military or other candidate

will emerge.

Egypt's bourse is among the region's best performers the economy has grown at

nearly 5 percent through the global downturn and while foreign investment

curved in in the crisis, it still flows but there are signs of fear. An Egyptian banker,

when asked what IPO deal flow would look like in 2011, would not remark until

pressed to say, in private, that it was too hard to predict with a presidential

election looming.

Mr. Mubarak said overnight that he had asked the government to resign after him

compulsory a curfew and prepared troops to back up police as they struggle to

control crowds who busy the streets to demand that he step down.The Tunisian

upheaval began with anger over increasing food prices, high redundancy and

anger at official vice problems which have also left many people Egypt emotion

upset and angry of their leadership.

Egypt is in the midst of a run of major political, security, and economic transition

that will open out for years to come. The 2012 presidential elections set to end

later this month in a final run-off election mark the end of one age in this transfer.

But Egypt faces a long road ahead, counting drafting a new creation setting

checks and balances in the new political system, and finishing trials for former

leaders in before governments.

The changes in the formal structures and internal balance of power in Egypt’s

government alongside the social and economic transformation Egyptians carry

on to experience, will be some of the most important strategic dynamics reshape

the Middle East. The changes happening in Egypt could spark its greatest

relocation since the 1970s, when it turned away from the Soviet sphere of sway

and toward the joint States and signed a peace treaty with Israel.

The days when the United States could prioritize regional safety over hold for

Egypt’s political and economic transitions are over. This political vagueness has

damaged Egypt’s economy, leave-taking endemic problems of high

unemployment, growing public debt, corruption, and rising pressures on Egypt’s

strange cash reserves—without a logical economic policy reply from the interim

government. This family economic and political volatility could lead to more

problems in the safety power.

The United States must also take into account the economic and political blow of

support to Egypt’s armed in a new, complete U.S. approach to Egypt. The strong

role that Egypt’s security organization plays in the economy counting the

inefficiencies this has created makes it a critical area for both economic and

political reform in Egypt. The leverage and influence that the United States has

on Egypt will become more and more incomplete by several factors, counting

more assertive and self-governing political leaders in Egypt general anti-

Americanism and financial and political constraint inside the United States.

Everyone as a member of society has the economic, social, and cultural rights

enumerated below whose fulfillment should be made possible by the State

separately or by international collaboration." The end result accepted by all but

the Soviet bloc representatives was Article 22 which introduces the social,

economic and cultural rights and which by describing them as "indispensable"

for human dignity links them to the traditional political and civil rights.

Technology transfer between states is one more future activity for addition in the

group, including Costa Rica and Norway, consider that each technology transfer

“constitute a possible for distraction or abuse,” and as a result that the treaty

must include technology transport. Egypt and India talking for a vocal alternative

of states believed it should not be regulated. Some part States want to protect

the idea of free skill transfer. In the March 2011 Prep Com, the Islamic Republic

of Iran stated the must protect the unchallengeable rights of States and

information transfer was the future point of the report.

Some Member States have argued that financial contact between states as they

apply to conformist guns should be keeping pace. Some European states have

argued that finance is out of control by state parties, and the United Kingdom and

Indian delegations argued that the should not include a finance section. Some

Member state and civil society organizations have called for the inclusion of the

financial section in an effort to make sure that any action that promote the

increase of arms in a divide country, whether through trade, aid, thinker property

rights or loans is keeping pace in the.

TABLE OF CONTAIN

SR.NO PARTICULAR PAGE.NO

DECLARATION I.

PREFFACE II.

ACKNOWLEDGEMENT III.

EXECUTIVE SUMMARY IV.

1 Political factors in Egypt 5

1.1 Tax Policy 8

1.2 Labor low 11

1.3 Environmental low 14

1.4 Trade on Egypt 16

1.5 Tariffs 20

2 Government have great influence in Egypt 22

2.1 Education in influence by government 22

2.2 Infrastructure influence 27

2.3 Health 29

2.4 Fiscal federalism of merits and demerits 31

3 Political & international environment in Egypt 33

3.1 Political stability 33

3.2 International influence of Egypt 36

3.3 International treaties where India & Egypt are members

39

4 Conclusion 40

5 Reference V.

1

Egypt general information

Basic Facts

Size: 385,229 square miles (about two times the size of the State of California)

Capital: Cairo

Population: 70 Million

Per capita income: About $1,200

Religion: Muslim (88%); Coptic Christian (12%)

Language: Arabic

President: Mohamed Hosni Mubarak

History

Egypt was the home of one of the most significant civilizations of the early Middle

East and was of one of the earliest urban and educated societies. Another

defining minute in Egypt‘s history came in 642 A.D. when the state was occupied

by the Arabs and Egypt became part of growing Islamic Empire that would

stretch across North Africa and into Spain up to Southeastern Europe and

Eastward all the way to modern-day Afghanistan. In 1517 Egypt formally became

a part of the expanding Ottoma Empire but this control was intervallic by a

French attack in 1798 led by Napoleon. The French were required out of Egypt

only three years afterward and in turn they were barred by Mohamed ‗Ali an

Albanian lieutenant in the Ottoman army. In 1869 the Suez Canal was built

making Egypt an even more high-quality and contested part of real-estate.

2

The Suez Canal made travel and trade from Europe to Asia much cheaper but

the designed geographic location in the end made the militarily better European

power much extra keen to regain control of the country. Crippling general debt

gave the British the pretext to occupy Egypt in 1882 and to formally declare it a

protectorate in 1914. Egypt participates in the first and second world wars on the

side of the British and the allied powers.

Egypt also participated in the 1948 war in Palestine, where Arab forces were

unable to block the creation of the state of Israel on land historically occupied by

Arabs. This union only lasted until 1961. However, Arab self-rule continues to be

an important rallying cry for Egyptians and others who appeal to ordinary bonds

of language and history. Promise to a common Arab cause made many

Egyptians understanding to the plight of Palestinians who had lost their homes in

the 1948 war that created the state of Israel. Following months of heighten

tension Israel attack Egypt in 1967 beginning the Six Day War. Israel destroyed

the Egyptian air force captured Sinai and closed the Suez Canal. The 1967 war

was a disastrous defeat for the Egypt and for Nasser‘s leadership.

In the financial sphere, Nasser was accountable for broken up Egypt towards

collectivism through nationalize industry instituting sweeping land reform and

making the state the main supplier of goods and services to citizens. Nasser is

still valued by many today for his leadership of Arab nationalism and the program

that he institute to provide for the reduced. However, he is also severely criticize

by others who point to his dogmatic style of law and the damage that the

collective system cause to Egypt‘s long-term development forecast

After Nasser‘s death in 1970 vice president Anwar Sadat took over. On 6

October 1973 Egypt launches a shock attack on Israel in order to regain

manages of the Suez Canal.

3

Hosni Mubarak Sadat's vice president was sworn in after Sadat‘s murder and he

has been the president of Egypt ever since. Mubarak nonstop many of Sadat‘s

political legacies. He has privileged the peace treaty with Israel and he nonstop

economic reform that were begin under Sadat. He has also maintained close

relatives with Western governments mainly the United States. This was illustrate

by Egypt‘s contribution in a 35,000 strong force in the 1991 Persian Gulf War

next to Iraq. Despite this close enterprise with the United States Mubarak has

manage to uphold political control from side to side unskilled means.

The government can be classify as a one-party strict state where the government

engage in election fraud intimidation, torture, and political treatment to maintain

its manage. Many Egyptians hope to see a more self-governing political

agreement emerge but severe economic difficulty mean that a more self-

governing future any time quickly is not very likely.

The People and Culture

Islam is the officer religion of Egypt. About 88% of Egyptians are Muslims and in

general Egyptians are quite secular. Islam recognize all of the same prophet as

in Judaism and Christianity however Islam also recognize the forecaster

Mohammed as the last in a line of prophet. The mosque plays a central role in

the lives of the majority Egyptians and it engages in many of the same program

of charity that we are recognizable with in Churches in the West. The other

twelve percent of the Egyptian residents is Christian. Egypt is a poor country with

an standard per person income of about $1,200 per year. Like many other less

urbanized country Egypt has a high rate of people growth which puts a important

strain on the country. Also similar to most rising countries there is a wonderful

gap between the rich and the poor.

4

The top ten percent of the country are accustomed to relaxed lives and a living

normal much like our own in the joint States but the mass of the population in

both urban and rural areas has an very hard time creation ends meet. These

harsh economic conditions are reflected in a relatively high rate of child death low

rates of literacy and chronic shortage for much of the residents. Egyptian culture

is an intensely social one. Comprehensive families are still very close and

friendships made during early days last throughout ones lifetime. Most public

activities revolve around gathering of friends and family whether at the home to

share a meal or out of the house at a local russet shop or eating place.

5

Political factor

Despite unrest in recent years, Egypt's political state today is stable and a

completely self-governing state is likely within the near future. This bodes well for

the country as a whole and puts Egypt resolutely back onto the traveler map.

Egypt was ruled by many countries before establish self-government and today it

is run by a multi-party semi-presidential system where the executive power is

divided between the leader and the prime minister, although in practice the

president tends to hold a greater share of the power.

President Mohamed Hosing Umbra has been in office since 14 October 1981

and he is at present serving his fifth term in office after re-election in September

2005. He is the leader of the ruling National self-governing Party, while Prime

Minister Dr Ahmed Nazi was sworn in as Prime preacher on 9 July 2004.

Egypt was the first Arab state to establish political relations with the state of

Israel, after the sign of the Egypt-Israel Peace Treaty. Egypt is a major power

between other Arab states and has always played a significant role as a mediator

in resolve disputes between various Arab nations, as well as in the Israeli-

Palestinian dispute. Egypt's political system at present receives much needed

monetary support from the US which is helping to project the country into a new

era of hopefulness.

Egypt‘s government, under President Umbrae, has work hard over the last three

years to pick up the pace with regard to reform which aim to boost higher

financial growth and reduce being without a job. Wide spectrums of a reform

whose goal was the modernization of the government and promote private sector

action were implementing Egypt country for political factors.

6

Political structure

The Egyptian Constitution provides for a strong executive. Authority is vested in

an elected president who can appoint one or more vice presidents a prime

minister and a cabinet. The president's term runs for 6 years. Egypt's legislative

body the People's Assembly has 454 members--444 popularly elected and 10

appointed by the president. The constitution reserves 50% of the assembly seats

for "workers and peasants."

The assembly sits for a 5-year term but can be dissolved earlier by the President.

There also is a 264-member Shura (consultative) Council, in which 88 members

are appointed and 174 elected for 6-year terms. Below the national level

authority is exercised by and through governors and mayors appointed by the

central government and by popularly elected local councils. In March 2007

Umbra introduced several constitutional amendments that would increase

presidential powers and more significantly ban any political parties based on

religion race or ethnicity. The amendments were put to a popular referendum and

despite low voter turnout and boycotts by opposition groups passed with 75.9%

approval.

7

Main political parties

The multi-party system was restored in 1976 by the then president Sedate.

However in practice it is the ruling National Democratic Party (NDP) which

completely dominates the political arena. The Muslim brothers a brotherhood

created in 1928 by Hassan El Banna is the main opposition party of the country.

They were banned but in spite of it they were able to win 88 seats in the People's

Assembly in the 2005 elections.

Political factors data such as tax policy, labor law, environmental law, trade

restrictions, and tariffs.

8

1.1 Tax policy

Introduction

A country‘s tax system has a significant impact on business activities conducted

in the country. Many countries use tax laws as a mechanism for the

encouragement of investments. These tax incentives in the form of a special tax

treatment otherwise included in domestic tax law or purpose designed law (e.g.

investment laws).

Since 1971, Egypt has been providing investors, with many tax incentives

regardless of the legal form of their business activities (i.e. corporate or

unincorporated). In this structure of Egyptian tax system is direct versus indirect

taxes, and investments tax incentives, particularly corporate tax incentives.

Egypt Tax System

Indirect Taxes

Direct Taxes

Customs duties

Stamp duties

General sales tax

Agricultural Land Tax

Building Tax

Income tax

9

Tax Policy Reform Highlights

It began reforming income tax for June 2005 Parliament approval Law in

91/2005, which become effective in July 2005 for personal income tax and

January 2006 for corporate income taxation began reforming.

Main changes to corporate income tax for Egypt:

Simplified by consolidating all income tax legislation in to one law.

The corporate tax base by eliminating provisions for special tax treatment

and introducing world wide income tax for residents;

Specific rules incorporated of calculation asset depreciation for new law,

over allowable depreciation claims there by increasing transparency and

reducing the discretionary powers of tax officials;

Establishment introduced to improve the certainty of tax rules governing

foreign companies market ;

Main changes in personal income tax for Egypt:

Income tax into three categories brackets restructured;

The top marginal tax rate reduced from 32% to 20% of egypt;

A personal annual allowance independent of social status and

The personal tax base for broadened by introducing residence-based on

foreign tax credits.

10

In Egypt, Tax revenue collected by central government and tax payable by

businesses structure.

Tax revenue collected by

central government

Taxes payable by businesses

% of

GDP

Number

of

Payments

Time to

prepare

file and

pay tax

Hours

Profit

tax

Labor

tax and

contributions

Other

Tax

Total

tax

rate

2005 2010 June

2011

June

2011

June

2011

June

2011

June

2011

June

2011

Egypt 14.1 14.1 29 433 13.0 27.1 3.6 43.6

India 9.9 9.5 33 254 24.7 18.2 19.0 61.8

In this data for last years can be given that, in this data is different country for the

India and Egypt. Egypt country camper on % of GDP in two years for the same

and camper on India is lower GDP. Taxes payable by businesses in total tax rate

is Egypt 43.6 and India 61.8.In this condition for this two country in more tax

payable on India and Egypt is lower tax payable of central government.

11

1.2 Labor Law

The Egypt labor law no. 12 from 2003 is the one who regulate the labor market of

Egypt. The labor law wants to increase the attachment of the private sector

market in the same time with the attainment of the stability rights for the

employees and the ones of the employers. This new labor law has 257 articles

regarding the legal aspects that regular the Egypt‘s labor market condition. The

employer` s true to fire employees is among the law‘s most important points.

Other point is representing by the conditions regarding the right; the law also

specifies the employees` right to strike.

The contracts of employment must be in on paper in the Arab language and in 3

copies. Each of the copies must be kept by the employee, the social insurance

and the employer. The employment contract must include some clear-cut

information, according to the labor law. The characteristic contract must include:

the employer‘s name and the work places address, the employees address,

name, occupation and experience, the employees social insurance number as

well as the documents that prove his/her identity, the kind and nature of work that

makes the contract` s subject, the time and method of payment.

The Egypt labor law obliges the employers from the private sector to employ 5%

from the total number of people with disabilities at the Manpower Offices` offer. It

refers to the employers that have an employee number of 50 or less. The

employer can also start a scheduled time with the disabled people he/she want s

to hire, to check the registry certificate that proves the disability. The employer

who wants to hire a disabled person must send one registered mail letter that

contains the delivery confirmation at the in charge manpower office in the first 50

days of the disabled peoples employment.

12

In organization that employee foreign people are thankful by the ministry to make

a specific record in order to have a control of the foreigner` employees. The

record must have mane and the surname of the foreigner, the date of birth, the

qualifications of the foreign person, the title of the job with a exact explanation of

the job, the employment permit` s number and date and the number and the date

of the employment certify wages.

A fixed contract has a period of maximum 5 years; in case that the owner and the

worker want a longer period of service, the worker has the right of terminate the

contract later then the 5 years but with no getting return. But the owner must be

notified with the most 3 months before. The labor contract must specify the trial

period; no employee must be kept in the try-out period more than maximum 3

months.

Years Egypt labor force

1999 1,90,00,000

2000 1,99,00,000

2001 2,06,00,000

2003 2,01,90,000

2004 2,07,10,000

2005 2,13,40,000

2006 2,18,00,000

2007 2,21,00,000

2008 2,46,00,000

2009 2,54,00,000

2010 2,61,00,000

2011 2,77,40,000

13

egypt labor force

1990

1995

2000

2005

2010

2015

yea

rs

In this charts data can be a Egypt labor force. Egypt labor force data years to

years change their. Labor force in Egypt country can be in increase firm of their.

14

1.3 Environmental Law

Environmental issues in Egypt are governed by Law No. 4 of 1994. This law

provide for the formation of an agency for the security and help of the

environment, the Environment Affairs Agency (EEAA). The EEAA is destined to

formulate the general policy and to prepare the basic plans for the safety and

help of the environment. It should also follow up the achievement of such plans.

The law provides for a mandatory environmental review, to be undertaken by the

capable managerial authority according to EEAA's instructions, as part of the

support process for all proposed projects.

The law forbids the usage of risky substances and wastes or the construction of

any establishment for treat such substances without a license from the

competent administrative authority. It is also forbidden to import hazardous waste

or to allow its entrance into or passage through Egyptian territory. It is mandatory

for all those who produce or handle dangerous materials to take safety measures

to ensure that no environmental break shall occur.

All establishments are requisite to ensure that while practicing their activities no

leaked or emitted air pollutants (caused by the burning of fuel, etc.) shall exceed

the maximum allowable levels. It is also barred to incinerate, to dispose of or to

treat garbage and solid wastes as well as to spray pesticides or any other

chemical mix unless it is done according to the setting and safety measures

specified in the Executive Regulations of the law.

Ships of any people off shore platform and any other company or agencies

official to look at or use natural marine resources are permissible to discharge

into the protective sea of Egypt any polluting substance resulting in harm to the

water environment. The law further provides for a system of incentive to be

15

offered to those who implement environmental safety activities or projects and

sets penalties for those who are in infringement of its provisions.

The Egyptian government has developed a five-year environmental action plan

(1997/98-2001/02) for violent the country's solid waste, air and water pollution

problems. The plan's priority include: preparing viability studies for planned

development projects influence companies to work toward ISO 14000

environmental standards certification and urging the use of scientific

management techniques and waste recycle to preserve normal resources.

Egypt is a participant to various convention environment protection, among which

are: the Environmental Modification Convention; the African meeting on the

protection of Nature and Natural Resources; the Vienna gathering for the

Protection of the Ozone Layer; the conference for the Prevention of Pollution

from Ships; the Barcelona Convention for the Protection of the Mediterranean

Sea against Pollution; the Brussels principle on Civil legal responsibility for Oil

Pollution Damage and the Moscow Treaty exclusion Nuclear Weapon Tests in

the feeling.

16

1.4 Trade on Egypt

The U.S. trade balance with Egypt in 2000 was $2.4 billion, based on U.S.

Government data, $33 million higher than in 1999. While the joint trade balance

was in effect unaffected, the value of trade increased in 2000. U.S. stock exports

to Egypt totaled $3.3 billion, up from $3 billion in 1999. U.S. imports from Egypt

were $888 million, and raise over the prior year‘s $617 million. The stock of U.S.

strange direct investment (FDI) in Egypt at the end of 1999 was $2.2 billion, an

increase of 8.7 percent from 1998. U.S. FDI in Egypt is strong largely in the oil,

developed, and banking sectors.

Trade Barriers of Egypt

Services barriers

General Agreement on Trade in Services

Egypt has margins for most services sectors in which it has made General

Agreement on Trade in Services. These margins place a 49 percent limit on

foreign equity in structure and transport services. In the computer services sector

larger help of foreign equity may be allowable such as when the Ministry of

Communication and Information Technology determine that such services are a

basic part of a larger business model and will benefit the country.

Insurance

Foreign firms may own up to 100 percent of Egypt private insurance firms.

Investors acquire more than a 10 percent stake in an insurance company require

support from the Egyptian Insurance managerial Authority (EISA). A 2008

change to the insurance law made EISA more self-governing and strengthen its

role from organizational regulator to a risk-based and market-sensitive controller.

17

Banking

No foreign bank seeking to set up a new bank in Egypt has been able to get a

license in the past 20 years, and in November 2009, the Central Bank Governor

reaffirmed that no new banks would be given license. More information at

banking improvement begin in 2004, the government has divest itself from many

joint venture banks, and privatized the fully government-owned Bank of

Alexandria in 2006. However, efforts to reform the long-term three state-owned

banks have been mixed, and the Central Bank rejected privatization for the three

banks in 2009 on the grounds that market situation were not right. The banking

reforms in the past five years have succeed in notably falling the share of non-

performing loans.

Telecommunications

Despite the way of a February 2003 law to allow for new telecommunications

company in accords with Egypt's WTO commitment, Telecom Egypt continue to

hold a de facto control since additional fixed-line licenses have not been issued

by the National Telecommunications dogmatic Authority (NTRA). The NTRA

delayed a plan to issue a second license in mid-2008, citing a lack of interest in

the global markets for fixed-line service. However, in October 2009, the NTRA

began accepting local and global bids for license to establish so-called "triple

play" services of data, voice, and video in private residences, for which greater

global market interest exists. The licenses for "triple-play" services are slated to

be issued in 2010. Compare to fixed-line service and mobile phone service in

Egypt is a more aggressive sector, and three major private company – Ethicality,

Mob nil, and Vodafone – control the market.

18

Transportation

The government is liberalizing naval and air transportation services. The United

States remains involved in replace the restrictive 1964 union with an Open sky

air services agreement. In June 2008, Delta Air Lines resume process of non-

stop service between Cairo global Airport and New York‘s John F. Kennedy

Airport. Egypt Air joined the Star Alliance in July of 2008 and has entered into a

code share contract with United Airlines. Egypt is working with the U.S. on

transport security issues at seaports and airports, and a joint note of sympathetic

on the jug Security idea is expected soon.

INVESTMENT BARRIERS

Under the 1986 United States-Egypt joint Investment Treaty (BIT) Egypt is loyal

to maintain an open investment regime. The BIT requires Egypt to accord state

and Most-Favored Nation (MFN) treatment (with certain exceptions) to U.S.

investors to permit investors to make financial transfers without control and

promptly and to adhere to international standards for expropriation and

compensation. The BIT also provides for binding international arbitration of

19

positive disputes. Based on a review of Egypt‘s speculation policies the OECD

has invite Egypt to adhere to the OECD statement on global Investment and

international Enterprises. Egypt signed the Declaration in 2007 beautiful the first

Arab and first African country to join. During this process Egypt decided to review

the limits on investors identified in the OECD‘s 2007 Investment Policy Review of

Egypt such as certain limits in the tourism sector as well as the biased action of

foreign investors in courier services.

ELECTRONIC COMMERCE

Egypt's Electronic Signature Law 15 of 2004 established the Information

Technology Industry Development Agency (ITIDA) to act as the e-signature rigid

power and to further develop the in order knowledge sector in Egypt. The

Ministry of State for Administrative Development (MSAD) is implement an e-

government initiative to add to government efficiency decrease services condition

time establish new service release models reduce government operating cost

and encourage e-procurement.

OTHER BARRIERS

Pharmaceutical Price Controls

The Egyptian government controls prices in the pharmaceutical sector to make

sure that drugs are reasonable to the public. The government does not have a

translucent mechanism for pharmaceutical price. The Pharmaceutical group in

the Ministry of Health and Population reviews prices of various pharmaceutical

products and negotiate with company to adjust prices based on a cost-plus

method. This method however does not allow price increases to pay off for

inflation and the pricing policy has failed to keep pace with the increasing cost of

raw materials. About 85 percent of lively pharmaceutical ingredients in Egypt are

imported. In 2004 the government compact customs duties on most imports of

pharmaceutical inputs and products from 10 percent to 2 percent.

20

1.5. Tariffs

A major customs tariff change took place in September 2004, basically reform

the Egyptian tariff organization within the environment of a full customs reform.

Tariff bands and items have been largely reduced, managerial and WTO-

incompatible ad-valor service fees eliminate and the average tariff rate has been

largely reduced (from 14.6% to 9.1%). This latest tariff reform reduced the

number of tariff bands and tariff rates. It included cuts on most imports fees and

surcharges, including processed foods, undeveloped goods, paper products, and

some strong domestic goods among others.

Exchange Rate: 1 EUR = 7.00 Egyptian Pounds (piaster)

Customs Tariffs:

1. only for long-term residence and for immigrants (not for Egyptians)

ITEM Customs estimated

value in Egypt pounds

(LE)

Tariff rate % VAT%

CARS

Up to 1000 cc Purchase price* 40 15

1000-1300 cc Purchase price* 40 15

1300-2000 cc Purchase price* 40 15

1600-2000 cc Purchase price* 135 30

More than 2000 cc Purchase price* 135 45

Car must have the same year of construction as the export to Egypt.

21

2. Only for tourist visa (foreign nations and Egyptians) with a maximum of 6

months.

ITEM Customs estimated

value in Egypt

pounds (LE)

1st – 3rd

Month

4th – 6th

Month

CARS

Up to 1000 cc - 250* 250

1000-1300 cc - 250 250

1300-2000 cc - 250 250

1600-2000 cc - 500 500

More than 2000 cc - 1000 2000

Egypt with a maximum of 6 months fixed price remains same.

3. Only for Egyptians who worked and lived in Germany and leave the country for

good.

ITEM Customs estimated

value in Egypt

pounds (LE)

Tariff rate % VAT%

CARS

Up to 1000 cc Purchase price* 40 15

1000-1300 cc Purchase price* 40 15

1300-2000 cc Purchase price* 40 15

1600-2000 cc Purchase price* 135 30

More than 2000 cc Purchase price* 135 45

Cars with a maximum age of 5 years!

22

Governments Have Great Influence in Egypt

Egypt global country governments have great influence on the health, education,

and infrastructure of a nation data can be given.

2.1 Education in influence by government

The Egypt government has urban an overall structure to improve human

development and established its commitment to recover access to and quality of

education from pre-school to tertiary levels. The Egyptian government has

developed an idea of Egyptian Education for the 21st Century, which is the basis

for the educational sector‘s 20-year planned framework. Education is the liability

of two ministries within the structure of the Egyptian government, the Ministry of

23

Education accountable for all primary and secondary schools in Egypt and the

ministry of Higher Education in charge for university education.

The Egyptian government identify the growth of the educational sector both pre-

University education and higher education as well as skill development as being

gravely significant to ensure adequate and balanced social growth in Egypt. The

development of the educational system is critical to ensuring the competitiveness

of the Egypt labor force in the globalizing economy. Reforms in the instructive

system have been introduced with the aim of civilizing the system as a whole and

the quality of education in exacting. Educational legislations, which specified the

general structure leading the main features of the educational policy, have

witness several amendment since 2004.

New laws presidential and ministerial decrees have been enacted meant at

developing the educational system in general by the most central law set up

over the past five years has been law 155/2007 concerning the teachers‘

framework. This law improved teachers‘ incentive by raising their salaries by

amounts up to 50% of the basic salary as well as introduce official approval

incentives up to 150% of basic salary.

In addition, a professional college for teachers was recognized with the objective

of initiate an assisting body to work on the execution of the national strategic plan

for the 2007-2012 pre-university reform. The main objectives of the planned plan

include:

Achieve quality in friendship with the national education principles in Egypt

by working on the growth of schools;

Rising effective management systems, monitor and evaluating

performance inside the system; and

24

Providing equitable access, civilizing quality for all by behind equal

educational opportunity for all children in Egypt.

The rising population has led to severe and basic impacts on the educational

trail. These issues include:

Greater than before right of entry ratio for children inside the required

education age group is more 90% of those children.

The severe lack in the number of teachers needed in Egyptian schools to

cope with the rising numbers of pupils, taking into deliberation the

worldwide rate.

This general rate is a teacher for every 20 pupils.

University and Higher Education

The office of higher education supervises university and high education. In

addition, there are aphanites establishment which take on the same educational

steps and the same curriculum in addition to Islamic studies. Egypt ensures the

self-government of university. Each university has its own nature and a private

budget. Both the board and its own chairman direct each university. University

has a best council that includes in its membership, heads of university and a

number of public and experienced individuals.

In 2002, ministerial decision No. 1067 was issued for the organization of the

highest Council on Higher Education. The highest Council plans the general

policy of university education, scientific research, co-ordination among university

regarding various activities, and the agreement of students‘ admittance and

numbers. The Egyptian government also confident the creation of private

universities with the aim of improvement education levels and relieving some

burden on public universities. As mention above, 15 private university comprise

51 faculties currently operate in the country.

25

Egypt‘s education system is in need of structural reform, counting greater than

before flexibility and good organization in power and institutional management.

The last set of planned education sector reforms to get better the quality of

educational services and knowledge outcomes, and the effective management of

public spending in education) - supported by the EU through a EUR 140 million

sector budget support programmed - were late by one year. Progress in other

areas slowed, counting the review of required education in Egypt and the reform

of minor education (including the access to university) slowed down.

Education inputs

Primary

Public

expenditure

per student

% of GDP

per capita

Secondary

Tertiary

Public

expenditure

on education

Trained

Teachers

in

Primary

Education

Primary

school

pupil–

Teacher

ratio

1999 2010 1999 2010 1999 2010 % of

GDP

2010

% of total

government

Expenditure

2010

% of total

2010

pupils

per

Teacher

Egypt - - - - - - 3.8 11.9 - 27

India 11.9 - 24.7 - 95.0 - - - - -

26

Participation in Education

Gross enrollment

ratio

Net enrollment rate

Primary

Adjusted

net

enrollment

rate

Children out of

School

% of relevant age

group

Preprimary

Primary

Gross

enrollment

Ratio

Secondary

Tertiary

% of

relevant

Primary

Age group

Secondary

% of primary

school–

age children

Male/

Female

Thousand

primary school–

age children

Male Female

2010 2010 2010 2010 1991 2010 1999 2010 2010 2010 2010 2010

Egypt 24 106 - 30 - 96 77 - 100 96 15 184

India 54 118 60 16 - 92 - - - - - -

This two data can be given for education inputs and participation on education for

data given that.

27

2.2 Infrastructure influence

Even if a lot leftovers to be done, current infrastructure is already greatly

industrial and relatively capable. Infrastructure is critical to the development of

tourism and the appeal of new and foreign investors. It also serve as much-

needed maintain for exporters. Private sector contribution (under concession,

BOOT, private management) is attracting personal operators.

The personal sector‘s efficiency is obvious in the Aim Sokhna port where

customs consent time is two days as compare to 28 days in other ports. The

administration is slowly bearing in mind more private sector contribution in

communications development. Egypt has also recognized very well equipped

free zones with excellent location, most of them with a port. Egypt has an

excellent ICT services which are key to a modern project base.

28

Waiting lists for fixed-line telecoms have almost left and Egypt has one of the

best subscriber growth rates for mobile phones in the county. Government can

be influence in railways, roads, water and wastewater, urban transport their all

influence by government in Egypt country. The Financial Times paper reported

in late 2008 that Egypt's public infrastructure—including schools, hospital and

public moving system--was in poor state.

29

2.3 Health systems influences

In new years, as decision makers have become more conscious of their health

sector evils and the interdependence of health and expansion higher right of way

has been given to deliver health services and gathering the health needs of the

poor. Increase health services are documented as a main concern for countries

to be able to meet the basic health needs of their people particularly for poor and

weak populations.

A challenge in most low and middle income country remains finding ways to

allow the many actors in the health sector to address these basic health needs

more efficiently. Yet decision makers have little proof to guide their decisions

about how to most successfully, fairly, and affordably give health services. The

aim of this book is to bring jointly a wide range of proof that is not limited to a

particular outcome measure or single set of methodologies.

A range of chapters examine by means of regular reviews quantitative and

qualitative analyses of existing data and country studies. The proof on what

strategies work to make stronger health services and how they implementing in

real situations. That may include civil society organizations, nongovernmental

organizations as well as associations of professionals and other service

providers and private companies.

30

The planning also includes the degree to which the health services are hostile or helpful

in their relations with each other. But not nearly sufficient attention has been paid to

representing how to pick up services for the poor. Approaches that ask hard questions use

in order cleverly and engage key stakeholders and institution is critical to “knowledge

and responsibility” practice that motivate successful execution of health services.

Health system of Egypt country influence

Health

Expenditure

Health workers Hospital

Beds Per

capital

Total

% of

GDP

2010

Publi

c

% of

total

2010

Out

of

pock

et

% of

total

2010

External

resourc

es

% of

total

2010

$

201

0

PP

P $

201

0

Physici

ans

2005-

2010

Physicians

Nurses

and

Midwives

2005-2010

Communit

y

health

workers

2005-

2010

per

1,000

people

2005 -

2010

Egypt 4.7 37.4 61.2 0.6 123 289 2.8 3.5 - 1.7

India 4.1 29.2 61.2 1.2 54 132 0.6 1.0 0.0 0.9

31

2.4 Fiscal Federalism: merits and demerits

Merits

Optimum use of resources and development growth

The central constitution assigns the central and the state governments to decide

their income sources and area of expenditures. And the fiscal devolution of the

same permits the local state and central managerial agency to collect revenues

and spend them. In doing so it makes a successful and proper system to design

and apply the methods of financial 27 operations developmental encumber

expeditiously in a way that satisfy the beneficiary. In turn outcome in the over

total growth of the country.

Job opportunity to professionals and workers

The devolution of fiscal power to different tiers of management and the need to

keep the financial machineries consistence with the dynamics of the area from

side to side time and technology quests many professional and skilled workers.

To cope up with local needs the diversities of peoples such as working

languages of the federal and the states where ethnic federalism is implement

based on language stress of specific professionals. This urges the governments

to train professionals and workers and run by them with the required skills

therefore.

Decrease central bureaucracy and corruption:

The power division in federalism enhances the local decision in their financial

matter in ways that satisfies the need of the area and prevent decision making as

of becoming overfull in the middle rule. Thus, it avoids incompetence and

government and technical chaos. Budget auditing and reporting at different level

and inter different level are some of the mechanisms to achieve these effects.

32

Demerits

Mobility and Migration of workers and professionals

The other disadvantage of fiscal federalism is mobility and relocation of expert

and skillful persons due to difference of payment for the same professions in

unlike states and in between the central or state governments. The richer

governments tend to pay better salary and give wage increase according to the

pace of their growth where as the poor strive to satisfy public services than

person payment in their financial presentation and growth strategies. However,

having the necessary skill or profession does not suffice to work in one state or in

the central government where the working language of the central and each state

is not the same like Ethiopia. Thus language requirement in addition to

profession minimize the migration of the same professional to the region of better

payment.

Spillover property

In spending and revenue appraisal after budget allocation of a fiscal year

overflow effects may be shown. More urban part of regions next to less urban

part of other region also faces the same problem. The overflow effects which are

caused by the ―flow‖ from one region to another would be in one trail while in

other places it would be in opposite directions and such event is termed as offset

effects.

33

Political & International Environment in Egypt

3.1 Political stability

Egypt's calcified politics has long been judged an asset in a confused region but

as leader Hosing Umbra ages in office with no clear descendant investors are

wonder if it might be a liability Egypt's economy is still buoyant in spite of

ambiguity about whether the 81-year-old president will seek a sixth term in 2011

or lever his son into power or whether a dark-horse military or other candidate

will emerge. But bankers score analysts and brokers are asking more question

about who will rule after Embark concerns that may bring stress for higher

returns from Egypt investments compare to rival markets and can confine Egypt

debt ratings. Worries about Mubarak's health in power since 1981 and who has

not picked a vice president, have in the past rattled Egypt's markets.

"The stable political outlook has obviously long been something that has been

identified as an advantage for Egypt," Control Risks analyst Wolfram Lecher said.

"Now, as the presidential succession is approaching, there has been obviously

more improbability and this uncertain political outlook has turned into somewhat

of a weakness." title figures do not reflect investor care. Egypt's bourse is among

the region's best performers the economy has grown at nearly 5 percent through

the global downturn and while foreign investment curved in in the crisis, it still

flows but there are signs of fear. An Egyptian banker, when asked what IPO deal

flow would look like in 2011, would not remark until pressed to say, in private,

that it was too hard to predict with a presidential election looming.

34

Davis 2011: Calls for stability in Egypt

Tens of thousands took part in the protest in Cairo and other city Japan's Prime

Minister Naoto Kan desires Egyptian President Hosing Mubarak to start a

dialogue with his people in the wake of ongoing protests. "I hope the government

of Egypt will reinstate security and peace," Mr. Kan said in a language to the

World Economic Forum in Davis. The unrest in Egypt has now turned out to be

one of the major topics of conversation amongst the leaders at the gathering. In

the meantime Tunisia has told Davis the country is "open for business" once

more. 'Tourism disrupted'

He said people were chronic to work public services were working, and that the

financial and banking system was investment steady, as was liquidity and the

exchange rate. "Visibly tourism has been disrupted but we hope this will be a

fleeting problem, and tourism will come back to usual levels," he said.

35

Start Quote

Anything that threaten development is a worry for us‖ Angel Gerri OECD

secretary general Mr. Nabli also criticized the agency that downgraded Tunisia's

credit rating after the unrest. He called the reaction "a little bit weird" as the

political changes would get better the business setting and "root out cronyism".

The reduce would probably make it more exclusive to use on the open markets

the central bank director said.

Mr. Mubarak said overnight that he had asked the government to resign after him

compulsory a curfew and prepared troops to back up police as they struggle to

control crowds who busy the streets to demand that he step down.

The Tunisian upheaval began with anger over increasing food prices, high

redundancy and anger at official vice problems which have also left many people

Egypt emotion upset and angry of their leadership.

36

3.2 International influence of Egypt

Egypt is in the midst of a run of major political, security, and economic transition

that will open out for years to come. The 2012 presidential elections set to end

later this month in a final run-off election mark the end of one age in this transfer.

But Egypt faces a long road ahead, counting drafting a new creation setting

checks and balances in the new political system, and finishing trials for former

leaders in before governments.

Most likely Egypt will carve out its own path with its transition shaped by multiple

centers of power—some that have emerged since the popular rising in 2011 and

others that have exist for decades. The path Egypt takes will have major

implication for the rest of the region. The changes in the formal structures and

internal balance of power in Egypt‘s government alongside the social and

economic transformation Egyptians carry on to experience, will be some of the

most important strategic dynamics reshape the Middle East.

The changes happening in Egypt could spark its greatest relocation since the

1970s, when it turned away from the Soviet sphere of sway and toward the joint

States and signed a peace treaty with Israel. The days when the United States

could prioritize regional safety over hold for Egypt‘s political and economic

transitions are over. This political vagueness has damaged Egypt‘s economy,

leave-taking endemic problems of high unemployment, growing public debt,

corruption, and rising pressures on Egypt‘s strange cash reserves—without a

logical economic policy reply from the interim government. This family economic

and political volatility could lead to more problems in the safety power.

The new Egyptian government needs U.S. support for this try now. since it

continues to shift its emphasis towards economic growth and job creation the

United States should make democratic governance reform anticorruption

37

measures and support to public society organizations working for political reform

a priority.

The United States must also take into account the economic and political blow of

support to Egypt‘s armed in a new, complete U.S. approach to Egypt. The strong

role that Egypt‘s security organization plays in the economy counting the

inefficiencies this has created makes it a critical area for both economic and

political reform in Egypt. The security establishment‘s efforts to shield itself from

mistake from the civilian government will have a major blow on the route of

political reform. Throughout this process, the United States needs to uphold

sensible opportunity.

The leverage and influence that the United States has on Egypt will become

more and more incomplete by several factors, counting more assertive and self-

governing political leaders in Egypt general anti-Americanism and financial and

political constraint inside the United States. It will not be able to dictate outcome

in Egypt, but by running with Egyptian associates and other local and global

powers the joint States can help influence trends.

Commissioners from Egypt and India for their part balked at endorsing any claim

that social and economic rights were fundamental. They pointed out that

governments of poor countries could not possibly put these rights into effect in

the near future.

The language that Mali drafted met with general approval, and ultimately it

became the Declaration's Article 28 ("Everyone is entitled to a social and

international order in which the rights and freedoms set forth in this Declaration

can be fully realized.") But it did not resolve the impasse over the role of the

state.

Everyone as a member of society has the economic, social, and cultural rights

enumerated below whose fulfillment should be made possible by the State

38

separately or by international collaboration." The Egyptian representative Omar

Louie then proposed an amendment to make clear that the state was not the only

institution through which these rights might be promoted, and that the rights in

question could be implemented gradually.

The end result accepted by all but the Soviet bloc representatives was Article 22

which introduces the social, economic and cultural rights and which by

describing them as "indispensable" for human dignity links them to the traditional

political and civil rights.

The reference in the chapeau to the "organization" of each State was key,

because it left room for choice among a range of means of striving toward the

common social and economic goals—governmental programs and policies,

international initiatives, market dynamics, voluntary action, or various

combinations of these approaches.

39

3.3 International treaties where India & Egypt are members

Technology Transfer

Technology transfer between states is one more future activity for addition in the

group, including Costa Rica and Norway, consider that each technology transfer

―constitute a possible for distraction or abuse,‖ and as a result that the treaty

must include technology transport. Egypt and India talking for a vocal alternative

of states believed it should not be regulated.

India argued against its addition in the treaty on the basis of the difficulty to apply

such regulations and the likelihood of inconsistent application of rule while Egypt

supposed that technology transfers were a tool of development and ―should be

encouraged, not restricted by the one more concern is technology transfer, which

includes cross-border data and technology distribution. Some part States want to

protect the idea of free skill transfer. In the March 2011 Prep Com, the Islamic

Republic of Iran stated the must protect the unchallengeable rights of States and

information transfer was the future point of the report.

Financing

Some Member States have argued that financial contact between states as they

apply to conformist guns should be keeping pace. Some European states have

argued that finance is out of control by state parties, and the United Kingdom and

Indian delegations argued that the should not include a finance section. Some

Member state and civil society organizations have called for the inclusion of the

financial section in an effort to make sure that any action that promote the

increase of arms in a divide country, whether through trade, aid, thinker property

rights or loans is keeping pace in the.

40

Conclusion

Egypt country tax can be change for personal income tax and corporate income

tax. But personal income marginal tax rate reduced from 32% to 20% of Egypt.

Egypt country in taxes payable by businesses for an Indian country is more tax

payable and Egypt country low tax rate payable of that.

The Egypt labor laws oblige the employers from the private sector to employ 5%

from the total number of people with disabilities at the Manpower Offices` offer.

Global country may own up to 100 percent of Egypt private insurance firms.

Investors acquire more than a 10 percent stake in an insurance company

requires support from the Egyptian Insurance managerial Authority (EISA).

Education inputs in Egypt for % of GDP 2010 for 3.8 and Indian country for no %

of GDP in this condition Egypt country are better than Indian country for % of

GDP.

The Financial Times paper reported in late 2008 that Egypt's public

infrastructure—including schools, hospital and public moving system--was in

poor state.

Health system influences on Egypt country per 1000 people in 2005- 2010 to

compeer on Indian country. But Egypt country is 1000 people in 2005-2010 for a

1.7 % health system influences and Indian country is 0.9% health system

influence.

2012 presidential elections set to end later this month in a final run-off election

mark the end of one age in this transfer. But Egypt faces a long road ahead,

counting drafting a new creation, setting checks and balances in the new political

system, and finishing trials for former leaders in before governments.

Reference

httpwww.ier.hit-u.ac.jp~kitamuraPDFA115.pdf

httpwww.oecd.orgdafprivatesectordevelopment46340489.pdf

httpwww.egypt-cairo.comegypt_labor_law.html

httpwww.infoprod.co.ilcountryegypt2i.htm

httpwww.globaltrade.netfbusinesstextEgyptTrade-Policy-Trade-Barriers-in-

Egypt.html

httpwww.ustr.govarchiveassetsDocument_LibraryReports_Publications20012001

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A

GLOBAL COUNTRY STUDY REPORT

ON

“Textile Engineering Industry in Egypt’’

Submitted to

K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER

STUDIES, KAPADWANJ

IN PARTIAL FULFILLMENT OF THE REQUIREMENT

OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

IN

Gujarat Technological University

Submitted by Faculty Guide

Mr. Amit Bachani

(Assistant Professor)

MBA SEMESTER III

K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER STUDIES,

KAPADWANJ

Affiliated Gujarat Technological University Ahmedabad

2012 - 2013

Mistry MahammadIrfan. A. 117240592008

Patel Tejaskumar. N. 117240592013

Patel Dhariniben. K. 117240592009

Patel Namrataben. D. 117240592016

Patel Pinkalkumar. D. 117240592021

Patel Bhavikaben .P 117240592022

STUDENT’S DECLARATION

We Irfan, Tejas, Namrata, Dharini, Pinkal, Bhavika, hereby declare that the report for

Global / Country report entitled “Textile Engineering Industry in Egypt ’’ is a result of

our own work and our indebtedness to other work publications references if any have

been duly acknowledged.

Place: KAPADWANJ (Signature)

Date: Mistry Mahammadirfan

Patel Tejas

Patel Namrata

Patel Dharini

Patel Pinkal

Patel Bhavika

I.

PREFACE

Being an M.B.A student, it is necessary to prepare a global country report. Their object of

practical training & knowledge is to develop atmosphere and all other business practices.

The preparation of the whole report was a great opportunity for us to explore ourselves to

the practical field. All analysis done by us regarding the EGYPT country could make us

all confident enough & prove ourselves. We could come out of the bookish knowledge.

Preparation of such type of report calls intellectual nourishment professional help and

encouragement. Due to report, we are exposed to the method and practices being use in

the field of applications.

II.

ACKNOWLEDGEMENT

Every student owes a great deal to others and we are no exception because learning is a

process which entails give and take, exchange of ideas and value addition through

discussions. So it gives us immense pleasure to be able to express our gratitude to one

and all who have contributed to the successful completion of our project with a great

learning.

First and foremost we would like to thank our project guide Mr. Amit Bachani. He gave

us an in-depth knowledge of the working of the GCSR report and enhanced our

understanding on its various aspects.

His invaluable and significant guidelines improved our outlook and contributed in

making our project a real learning experience. He also encouraged us to put in our best

efforts and bring out the beat of our abilities.

III.

EXECUTIVE SUMMARY

The textile industry is one of the oldest in the world. The industry was primarily a family

and household one until the early part of the 1500 when the first plant system was

established. Today the textile part in Egypt consists of well over 3000 company range

from the very small (employing less than 8 laborers) to the very large (greater than 20000

laborers). These are both public and private sector companies.

Egypt produces 25-30% of the world cotton though there is strong competition from

USA, China, India and Israel. Egypt also produces the some of the maximum quality

additional Fine cotton in the world has a 35% of the world market. Commonly used raw

materials include: Natural fiber based on cellulose (e.g. cotton, flax, jute, hemp etc.) or

protein (e.g. wool, and silk).

A number of the company in Egypt caters to the export market and these exported goods

can be classified as:

Fibers: medical cotton

Yarns: cotton yarns, rayon yarns, flax yarns, wool or acrylic yarns, hanks

Sewing thread

Cotton and blend fabrics : grey and dyed, written and complete

Woolen and blend fabrics

Ready-made fashion

The early and most primal arts were moved by nature and were developed through the

usual resources of the country and the primitive tools and materials. In the warm

countries, greater attention was given to the weaving of linen, silk, and cotton fabrics.

IV.

Linen possibly was the first textile to be manufactured. It was made by the India and

Egypt as early as 2800 B.C. in fact it is hard to conclude whether textiles had their origin

in Egypt or in the adjust. Silk after linen was the next industry of the textile trade to be

developed. Aristotle speaks of silk as being bring over from China from side to side India

to a small commercial colony in Asia Minor and there is also old story of the Greek

monks who return from China carrying a goodly number of silkworms out of sight in

their stays thus from all these countries, American textile manufacturing has developed

into a more or less modified and almost always ugly type of machine made fabrics.

The Indian textiles industry plays a significant role in the country’s economic growth.

The industry is important in conditions of output foreign exchange income and

employment with rising interest in the Indian textiles and clothes sector a number of

buyers opened their source/liaison office in India. The recent couple of years were testing

for the Indian textiles industry as a result of the global monetary slowdown.

The textiles sector in India comprise both organized and unorganized segment. More than

70 textile and clothes cluster account for about 80% of total manufacture in the country.

Major sub-sectors of the textiles sector are organized cotton/man-made fiber textiles

mills, man-made fiber/filament yarn, wool and woolen textiles, sericulture and silk

textiles, handlooms, handicrafts, jute and jute textiles and textiles exports.

In this manner industry should be able to believe political and legal aspects so as to show

that they value the policies and regulations of the government in any of the business

operation.

Tax policy

Employment laws

Political stability

Environmental system

Trade and tariff margins

The economic situation of world can also affect the industry as rising inflation rate make

the cost of manufacture high and thus reduce the profit margin of the industry.

Economic strength

Economic expansion

Interest rates

Inflation rates

Exchange rates

The change in the way of life of the people affects the growing demand of the apparels.

The change in the way of life and needs in different demographics also affect the demand

of the consumers.

Population expansion rate

Age division

Career attitude

Consumer behavior

Religion and society itself

Technological progress in all the sectors of the country has changed the entire socio-

economic situation. Particularly in the textile sector there is a lot of technological

development.

Distribution and communication channels

Technology incentive

Rate of technological change

Environmental and natural aspect

Barriers to entry

Production level

Outsourcing decision

Broadly define the textile industry includes the spinning, knitting and weaving of natural

and man-made fibers the opening of textiles and the production of ready-made clothes

The most common sectors in the Egypt textile industry are cotton fabrics, wool fabrics,

man-made fabrics, synthetic fabrics and blended fabrics.

The Union of Industries and the Ministry of Industry had urged the Finance Ministry to

launch measures to maintain the domestic industry. He stated that all contact relating to

raw inputs required for production would be closely monitor to avert these goods from

incoming the black market.

Ministry of Trade & Industry and Cotton adjudication and Testing General Organization

(CATGO) announce that International Cotton Training Center (ICTC) will ways a

training program on Fiber Technology Spinning and Textile Industry. It will be held for

the period of the period from 3 July till 28 July 2011.

Modification of existing processes/tools or the purchase and system of new equipment

may be considered to reduce the utilization of process chemicals energy and water.

Foam technology: where water is replaced by air in the form of foam in chemical recipes

and formulations. This helps to save power, decrease chemical costs, increase

manufacture and minimize effluents and pollution. Foam technology can be useful in

sizing, dyeing, printing and finishing processes.

Spray technique: where sprays of strong solutions are applied to the goods to achieve

treatment such as dyeing and finishing. The use of electrostatic systems was introduced

by Sandoz to improve consistency and distribution. Vacuity extractors can also be used

to lower the wetness content of a textile material before it enters the dryer. These are

most efficient on fairly porous artificial materials. In this technique radio-frequency

(RF), e.g. micro-wave and Infra Red are use for freshening loose stock letters and hanks

that have been given opening or dyeing treatments.

This method is a commercial reality with verifiable cost energy and time savings.

Computer control and other forms of mechanization can be introduce to dyeing

processes in order to allow greater reproducibility and optimized use of dyes and

additives in dyeing formulations. Use of solar energy as an option for the conventional

energy is a hopeful approach for reducing energy use needed for heating at process

water.

The Egyptian Prime Minister Dr. Ahmed Nazif opened the New Textile Technology

Centre situated in the campus of the Faculty of Engineering Cairo University in Sheikh

Zayed City on 27 of May 2008. This is the latest knowledge center in this sector at a state

level. The response was attended by Mr. John Yates Medibtikar Programmed Manager.

The centre is set up to provide the best utilization of factories equipments for spinning,

weaving and dyeing which were donate by the Ministry of Housing to Cairo University

as a division of the new property of the Faculty of Engineering in Sheikh Zayed City.

These equipments value is beyond 5 million Dollars. This technical center represent a

unique partnership between academic institution and government agencies and self-

governing and private sector where it is administer by the Governing Council attended by

the industrial leaders in both private and public in the textile sector.

The Center’s activities can be classified into main two sectors primary sector which is the

technology sector and the secondary sector which is the testing and value control for the

technical sector sections of textile spinning, weaving and dyeing. The testing and quality

control sector has a globally accredited laboratory which contains many devices that is

capable of performing arts the required tests for the fashion and textiles export.

Egypt Textile engineering industry (TEI) is afraid the condition improved during 2010-11

with a better performance set up by the textile industry. As per the survey of the Textiles

working group during 2008-09 the estimated annual install capacity of TEI was Rs. 5065

Crores. The total permanent production of textile machinery parts & accessories during

2010-2011 recorded a raise of 35 per cent at Rs. 3563 crores as next to Rs. 2000 crores

achieved during the earlier year.

Imports of textile machinery have rise from Rs. 3000 crores during 2009-10 to Rs. 3500

crores (approximate) during 2010-11.Exports during 2010-11 had been approximate at

Rs. 450 crores against Rs. 400 crores achieve during 2009-10. With the overall

development of the industry exports are expected to develop in the coming years.

The welcome gush in demand from the textile industry during 2004-2007 had confident

TEI to develop and expand the machinery developed capacity. This was mostly so in the

spinning machinery sector. At present demand is again looking up and it is our earnest

attempt to meet the demand in quantum quality and show coupled with effective after-

sales service.

Even today the preference of a great section of the textile industry to imported second-

hand/used machinery is touching the growth of domestic machinery manufacturing.TEI

needs full support from the Government so that it has a level in performance field and

becomes aggressive enough to supply the latest technology machines to the textile

industry.

Compared to public companies many private companies are very dynamic they put

together new technologies develop a network of retail businesses counting abroad and

achieve excellent export results. Besides the creation of distant companies (India,

Chinese.) in many free zones, the strong domestic bazaar and the state supported

Research and Development activities are among the other factors that help expand the

sector. Earlier Nassir’s completion of “socialist” statist policies made Egypt firms

mutually respectful overstaffed and with poorly skilled workers state industry have been

slow in adapting to technological changes including the completion of computers and

software.

The private firms that do exist are too trivial to make up for the weaknesses of the public

sector and have not done a improved job than the public sector industry in implement and

updating technologies which suggests that privatization might not always be the magic

answer at least when not accompany by more radical political reform. There are many

projects to develop essentials of the improvement system.

The country’s global profile has better hence hopeful foreign investments, the possibility

of repatriating invest capital and profits, tariff cuts, corporate tax reform, support of

exports, creation of special fiscal free trade zones and protection of academic property. It

is hoped that additional privatisation will lead to a further add to in foreign investment in

Egypt. Expansion of new manufacturing areas and IT focus offers room for growth.

Operator characterizes Egypt as a much stopped market. For example Spanish operator

describes the Egyptian market as being as closed as the Pakistani and Indian markets (in

interview). Operators characterize India as one of the most limited market for their

exports.

Textile and clothing sector is of high significance for Egyptian economy and service.

Employ of the sector covers about 1 Mio personnel and accounts for 30% of Egypt total

manufacturing labor force 44. In addition there are thousands of small factories and

workshops. Also the sector employs unaccounted in official workers. Textile companies

had to fulfill government supplies and to provide low price products for domestic

consumption. For years the industries was affected by this production process and suffer

from lack of technological innovation. From the 1980’s the Egypt textile industry was

progressively privatized but still suffer from trade limits on textile imports and machinery.

Garments are the main product imported by both the EU and the US though the EU had

13% of its imports in yarns as opposite to 3% for the US and 5% in fabrics as opposed to

2% for the US explanation the turn down in the exports of yarns and fabrics (reviewed

later in the report) in light of the decrease in the European textile industry.

Vision of India to build world class, state-of-the-art, developed capacity and achieve a

main global standing in produce and export of textiles and clothing. to enable Small &

Medium enterprise (SMEs) to achieve competitiveness to face the global situation with

confidence. To provide a conducive policy setting which will give confidence innovation,

augment R&D efforts, and improve output through the up gradation of technology

manufacturing process and the development of human resources. To set up the Indian

textiles industry as a creator of globally competitive value added products.

To have sustainable growth and progress of Textiles Sector in the country. To improve

output across the entire textiles value chain. To achieve comprehensive growth by

improving productivity in handlooms, handicrafts and sericulture and by ensuring

interests of weavers and handicrafts artisans. To ensure included development and

support of jute sector. Jute production to grow at 3.6% per year.

To Be the Hub in Textiles teaching and Technology Transfer for Global Competitiveness.

To equip the textile industry to endure the pressure of import access and maintain

dominance of the rising domestic market.

Objectives

Demand Based progressing Education and particular Training.

Establish Industry Linked credited Testing/Analysis Lab.

Create expertise Transfer Focal Point Based on Needs.

Unite consult Services from FECU and capital in Unique combined Project.

Network Domestic and global Expertise to Serve the Industry

Egypt President visited India in 1982, in 1983 to attend the NAM Summit and in

November 2008 on a two-sided visit during which the follow documents were signed

exile Treaty conformity on elimination of visa obligation for holders of diplomatic

special and official/service passports MoU on Cooperation in the ground of Health &

Medicine MoU on collaboration in the examination and Use of Outer Space for Peaceful

Purposes MoU on Trade & technological collaboration.

In fact some Indian company started in 2011 new production services in Egypt. Egypt

investment in India is about USD 30 million by El Sewed group an Egyptian company

manufacturing Electric meters in India.

Out of the 50 Indian companies operating in Egypt approximately 25 companies are joint

ventures and wholly owned Indian subsidiary. The rest of the Indian companies are in

service in Egypt through their delegate offices and executing various projects for

Government of Egypt and Governmental organizations. The Indian companies are in

service in almost all fields like textiles and garments, power, chemicals including

specialty chemical, adhesives, pharmaceuticals, information technology, paints,

consumer goods, healthcare, PVC, caustic soda, PET Resin, plastics, paper, packaging.

The principal Indian export items comprise crude oil, LNG, raw cotton, rock phosphate,

coke and semi-coke of coal. The top Indian exports during 2011-12 were, cuts of

boneless bovine frozen meat, diesel fuel, two & three wheelers, cotton/artificial yarn,

carbon electrodes.

Egypt's economy was particularly hard hit with slowing production and a decrease in

exports amid the unrest that followed the passive revolution and a sharp fall in tourism

revenue which is a main source of foreign currency for Egypt. The Egyptian financial

system grew 2.2 per cent in the previous 2011/12 fiscal year.

India and Egypt are two of the world's ancient civilizations with a history of close

contact. Egypt has traditionally been one of India's most important trading partners in the

African continent. Since FY 2005-06, India has been among the top five importers of

Egyptian products. This is mainly on account of import of oil and gas from Egypt.

India has emerged as one of Egypt’s largest deal partners. Nearly 95% of Egypt’s exports

to India comprise oil and gas. Cooking gas raw cotton, rock phosphate, and marble

comprise the other import items. The two-way trade between India and Egypt has

exposed significant growth in new years. The relationship between the two countries has

evolved into a significant joint venture in the economic and commercial sphere. At the

same time Indians have emerge as important investors in the Egypt and India as an

important export destination for the Egypt manufactured goods.

TABLE OF CONTAIN

SR.NO PARTICULAR PAGE.NO

DECLARATION I.

PREFFACE II.

ACKNOWLEDGEMENT III.

EXECUTIVE SUMMARY IV.

1 Egypt Textile Industry

1.1 Introduction 1

1.2 History of Textiles 3

1.3 History of Indian textile industry 8

1.4 PEST Analysis of Textile Industry in Egypt 10

1.5 SWOT Analysis of textile industry in Egypt 12

1.6 Technology used in textile industry 14

1.7 Egyptian Government to Introduce Steps to Protect

Textile Industry

16

1.8 Training program on Fiber Technology Spinning &

Textile Industry

17

1.9 Technology Change and Modification 20

1.1 New technology centre for the faculty of engineering 23

1.11 Egypt Textile Machinery Industry: Current scenario and future

Outlook

24

2 Company Analysis

2.1 Textile Manufacturing Companies 26

2.2 Top companies in Textile industry in India: 28

3 Comparison of India and Egypt textile

industry

3.1 Weaknesses and Opportunities of Egypt and India 32 -34

3.2 General features of the access to the Egypt and Indian

market

35

3.3 Domestic structure of the textile and clothing industry

in Egypt and India

36

3.4 Egypt and India Textile Imports and Exports 37 & 38

3.5 Vision and objectives of an Indian textile industry 39 & 40

4 Relations of India-Egypt

4.1 Relations of India-Egypt 41

4.2 India and Egypt Economy Relations 43

5 Conclusion 47

6 Reference v.

Page 1

1. Egypt Textile Industry

1.1 Introduction

The textile industry is one of the oldest in the world. The oldest known textiles which

date reverse to regarding 5000 BC are leftovers of linen cloth found in Egypt caves. The

industry was primarily a family and household one until the early part of the 1500 when

the first plant system was established. Today the textile part in Egypt consists of well

over 3000 company range from the very small (employing less than 8 laborers) to the very

large (greater than 20000 laborers). These are both public and private sector companies.

The textiles industry is the fifth largest source of foreign earnings after oil, remittance,

visiting the attractions and earnings from the Suez Canal. It is the second leading

manufacturing sector in Egypt after food processing and represents 25% of total work

output (excluding petroleum products). Egypt produces 25-30% of the world cotton

though there is strong competition from USA, China, India and Israel. Egypt also

produces the some of the maximum quality additional Fine cotton in the world has a

35% of the world market.

Production in the sector:

Commonly used raw materials include:

Natural fiber based on cellulose (e.g. cotton, flax, jute, hemp etc.) or protein (e.g.

wool, and silk).

Man-made fibers (e.g. viscose rayon and cellulose acetate) Synthetic fibers (e.g.

polyester, polyamide, polyacrylic, polypropylene, etc.) of the natural fibers cotton

is the largest crop produced and processed in the textile industry.

Flax represents the second biggest source of fiber for the textile industry is refined

in Egypt mainly for the production of linen and seed oil.

Page 2

Locally produced wool is used for runner manufacturing with the maximum

quality wool being import and dew axed in Miser Beida Dyers Alexandria.

Viscose polyester and polyamide fiber are created locally in Miser Rayon of

Kafr-El-Dawar.

There are very few home manufacturers of the chemicals necessary for the production of

artificial and real fibers in Egypt. The best part of the chemicals therefore has to be

import or procure from multinational chemical company with a presence in Egypt

making it hard to adopt a CP approach.

A number of the company in Egypt caters to the export market and these exported goods

can be classified as:

Fibers: medical cotton

Yarns: cotton yarns, rayon yarns, flax yarns, wool or acrylic yarns, hanks

Sewing thread

Cotton and blend fabrics : grey and dyed, written and complete

Woolen and blend fabrics

Ready-made fashion

Page 3

1.2 History of Textiles

The early and most primal arts were moved by nature and were developed through the

usual resources of the country and the primitive tools and materials. The stimulation to

create and design sprang from the people‟s simple needs and requirements hence the first

known arts were pure and original and there were no foreign authority to help them.

As the arts of past ages untouched from period to period the arts of nations and peoples

spoken themselves through nature and spirit in forms, lines, ornaments, and colorings.

Through all the centuries still the immutable laws of work and proportion remain in spite

of changing styles and revolutions. The progress and development of all the arts, style,

painting, design, textiles, and costumes, may easily be traced from the earliest Egyptian

Babylonian and Assyrian countries through Greece and southern Italy from side to side

Asian minor to Bagdad and Byzantium to the mogul courts to Italy, France, and England.

All primal as well s Egypt designs and ornamentation were simple in structure they were

delegate and attractive and geometrically arranged with only a few lines. The Egypt use

color conventionally and though their painting were in flat tints they still conveyed

clearly the objects they desired to stand for. Red, blue, or yellow, with black or write,

gave division and clearness to their color designs. The lotus papyrus and palm kindling

growing on the banks of the Nile and the well-known asp and beetle were the main

motifs.

The plants which the Egypt used in their festivals to decorate the capitals of their pillar

were taken possibly from the full-blown lotus flowers or the rushes or reeds used to bind

stalks at top and bottom of their primal houses or possibly their temples lashed to a point

at the top. In their tents the fiber used for the covers were often plaited and woven a

custom which most likely moved them to carry out the idea of the square painted design

for their temple ceiling.

Page 4

It is not known positively when the textile industry originates. It is definite however that

it is older than design that fabrics preceded paintings and that “when the first people of

the earth took refuge in caves or under interlace boughs they were clothed in common

cloths or skins and that when the first hut was built they were somewhat well dressed” In

the warm countries, greater attention was given to the weaving of linen, silk, and cotton

fabrics.

LINEN AND WOOL

Linen possibly was the first textile to be manufactured. It was made by the India and

Egypt as early as 2800 B.C. in fact it is hard to conclude whether textiles had their origin

in Egypt or in the adjust. The tombs of Egypt of 2800 B.C. illustrate weavers at work.

The Japanese unstated the weaving of linen, gold, silver, and silk into rare papers, while

the Europeans were still writing on pieces of bark and as evolution spread from East to

West the ways of spinning and weaving were passed on to Europe to Italy and Spain, to

France, then to Germany, and finally to England.

It was from India that the information of block printing came to Europe. By sea it came

direct to France from one of her colonies. There are pictures of like textile to be found on

the walls of the place of worship of Beni Hassan, built 2100 B.C., and Egyptian and

Syrian monument of 2400 B.C. show wall pictures of the manufacture of rugs and

fabrics. Also pictures of looms indicate that drawn-work and nettings were of early

origin.

The Egyptians used wool, hemp or flax for this early woven stuff. In 400 A.D. were

woven Egypt and Roman tapestries. In 600 A.D. northern Egypt and Sicily were

developed silks. The Greeks were ignorant with cotton until it came from India and not

until the time of Alexander the Great was it recognized in Europe. Besides linen mummy

cloths, woven a thousand years previous to Christ there were also those made of woolen

stuffs. In addition cloth of gold tissue of which we read in the Bible was life form made

before the time of Moses. It was crudely produced by pounding or flattening the gold into

Page 5

linen or cotton cloths by means of wooden mallets and because the Egypt unlike the

Orientals did not know of gold wire they used the softest gold leaf in the making of these

great mummy cloths.

Rugs were first woven by the Assyrians but if the Babylonians and Egypt had not

exposed and valued the art and if later the Greeks and Romans has not soften the walls

and floors of their costly palaces with these textiles it is unsure whether we should now

know of the Oriental rug. Pliny speaks of the greater skill of the Assyrians in the weaving

and in the color combination of rugs Homer and Herodotus tells of the weavers of the Far

East and the Bible refers many times to the runner and its uses.

The Oriental rug was first made for religious purpose and later to take the place of wall

streamer. In Europe the weave of wool reach its rightness during the tenth century in

Flanders. In 1066 the Angles and Saxons were weaving wool and create became

extensive in 1331 in the reign of Edward III. Toward her colonies however England

maintain a policy intended to limit any produce of woolen goods and all known textiles

though a report of Alexander Hamilton in 1791 mentions a mill for the produce of cloths

and cassimere‟s in operation at Hartford Connecticut.

SILK

Silk after linen was the next industry of the textile trade to be developed. Five thousand

years ago it was life form made in southern China and it was only a hundred years later

that the secret of it was only a hundred years later that the secret of its making was

dispersal across to the East and finally to Europe. Aristotle speaks of silk as being bring

over from China from side to side India to a small commercial colony in Asia Minor and

there is also old story of the Greek monks who return from China carrying a goodly

number of silkworms out of sight in their stays Silk, then, was usually woven in China

but not until 500 A.D in the time of Justinian was it woven in Europe.

Page 6

Moreover two centuries onwards before any real development was made in silk

manufacture there though at the present time Europe produces one hundred and fifty

million pound of cocoons annually and Italy and France carries the biggest quantity of

that amount. This Country of Europe has always been the homes of the best weavers of

silk, velvet, lace, and tapestry.

TAPESTRY

The weave of tapestry was known early in society date back to the Egypt period. Possibly

it was on loan from the Orientals. In Europe it was first skillful toward the end of the

twelfth century in Flanders where it flourish in the rich and wealthy town of arras

Flemish weavers began to produce wool tapestry at arras, Lille, and Brussels in 1477. In

France tapestry produce began in 1466 at Lyons. Later factory were establish by the

kings for this produce. The Gobelin plant for instance was started in 1539 by Francis I

and here artists such as refuel made designs for the tapestry.

In 1619 this factory became the royal property of France. In the twelfth century the

weave of minster vestments was an important although the Germans were far after in

other kinds of weave fragrance was famous for her religious textiles known as periphery

web. With this exemption German designs were heavier and their cloths coarse than those

of the French. In 1480 needlepoint lace work began in Italy. In 1500 Italy manufactured

cloths silk, satin, clam ask and plain and cut velvets.

In 1531 Corte bring silk to Mexico whence it finally came to the United States where its

manufacture easy slow at first. In 1619 it was cultivated in Virginia and it thrived

moderately until 1666 when it proved a complete failure. Despite this tardiness however

silk cultivation is now permanent and ever growing industry in the United States as is the

manufacture of cotton and linen cloths. Thus from all these countries, American textile

manufacturing has developed into a more or less modified and almost always ugly type of

machine made fabrics.

Page 7

The good color and simple designs of the simple clothes counterpanes and samplers of

our grandmothers of colonial times are the majority outstanding hand wrought examples

of the American textile; and today perhaps the best textile weaving are dyed, design,

copied and woven by individual weavers, arts and crafts society and by certain interior

decorate shops of new York which have import French weavers and their dyes their

looms and method. Pamphlet of the chemical properties of dyes and cloths and tests for

textile may be obtaining upon request from the home finances departments of American

college and universities.

Page 8

1.3 History of Indian Textile Industry

The Indian textiles industry plays a significant role in the country‟s economic growth.

The industry is important in conditions of output foreign exchange income and

employment. It contributes around 14% to industrial production, 4% to GDP and 10.6%

to the country‟s export salary.

One of the key trends witness in liberalize post-quota time is that India emerged as a

major source purpose for new players. With rising interest in the Indian textiles and

clothes sector a number of buyers opened their source/liaison office in India. The recent

couple of years were testing for the Indian textiles industry as a result of the global

monetary slowdown. Back home the industry faced challenge of strong demand side

pressure due to inflationary trends and instability in service prices.

Size and structure of the industry

The Indian textile industry is continuous with only a few large players and many small

and medium-size companies. The industry‟s size is expected at US$ 55 bn with 64% of

the companies catering to home demand.

The textiles industry provides direct employment to more than 35 mn people and indirect

service to 47 mn people. In addition the industry generates important employment

through forward and backward linkage both in traditional (production of cotton and other

natural fibres) and modern activities (textile design, etc). In fact the textiles industry is

the second-largest employment producer after agriculture.

Industry structure

The textiles sector in India comprise both organized and unorganized segment. More than

70 textile and clothes cluster account for about 80% of total manufacture in the country.

There are nearly 40 power loom cluster in the country. Major states with a figure of

Page 9

clusters are Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Uttar

Pradesh. The textiles industry is much diversified with hand-spun and hand-woven

sectors at one end and the capital-intensive complicated mill sector at the other. The de-

centralized power loom/hosiery and knitting sectors form the largest section of the

textiles industry.

Major sub-sectors of the textiles sector are organized cotton/man-made fiber textiles

mills, man-made fiber/filament yarn, wool and woolen textiles, sericulture and silk

textiles, handlooms, handicrafts, jute and jute textiles and textiles exports.

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1.4 PEST Analysis of Textile Industry in Egypt

Political (Legal) Aspects

An Industry will not be able to gain success good standing and trust if it will not believe

legal and political sector as part of their strategy. Political and legal sectors include the

needs of the company to follow the given policies and system of the government in order

to be careful as legal and official business company. In this manner industry should be

able to believe political and legal aspects so as to show that they value the policies and

regulations of the government in any of the business operation.

Tax policy

Employment laws

Political stability

Environmental system

Trade and tariff margins

Economic Aspects

The economic situation of world can also affect the industry as rising inflation rate make

the cost of manufacture high and thus reduce the profit margin of the industry.

Economic strength

Economic expansion

Interest rates

Inflation rates

Exchange rates

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Social Aspects

The change in the way of life of the people affects the growing demand of the apparels.

The change in the way of life and needs in different demographics also affect the demand

of the consumers.

Population expansion rate

Age division

Career attitude

Consumer behavior

Religion and society itself

Technological Aspects

Technological progress in all the sectors of the country has changed the entire socio-

economic situation. Particularly in the textile sector there is a lot of technological

development.

Distribution and communication channels

Technology incentive

Computerization

Rate of technological change

Environmental and natural aspect

Barriers to entry

Production level

Outsourcing decision

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1.5 SWOT Analysis of textile industry in Egypt

Strengths:

Egypt's competitive advantage in having rich labor. The privatization strategy of

Egypt is causal to sustainable expansion in industry since governments have other

jobs rather than management of developed production. The privatization

procedure is progressing though other countries (e.g. Germany) have stopped up

this file in much shorter time.

The institution of new industrial cities has been a practical option to curb the

pollution problems of the old cities. This not only decrease problems in the over

packed areas but also helps to spread urbanization in the new cities that have

sufficient land space. The idea of industrial cities aims at boost the initiative of

cleaner production in the industrial establishment.

The domestic agreements signed by Egypt particularly that with the EU. Egypt‟s

special geographic location which gives it a relative advantage in exporting.

The relative abundance of natural gas which constitute a source of energy for

industrialization in spite of its high costs. Egypt has always been creative and all

they require is motivation.

Labor-intensive textiles in which Egypt has had rich knowledge and the relative

advantage of cotton farming length of staple and skilled low-priced labor.

Weaknesses:

Fine export product and market base. Some degree of domestic production of

middle inputs and components.

Limited payment of the FDI.

Weak capital goods industry.

No technological deepen.

Limited natural capital.

High figure of population.

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Low quality of education and low R&D.

Lack of promotion and advertising skills.

Opportunities:

Slow decrease of the protectionism and subsidy according to the ERSAP which

implies the occupation in only the resourceful products.

International agreements Egypt has signed with other country especially the EU.

Egypt tends to better recognize the concept of marketing and sales and has

recently introduced it in its universities which provide the domestic goods the

opportunity to be better marketed abroad.

Threats:

Contest in the export markets from lower cost manufacturers.

Threat of de-industrialization because of fast import liberalization.

Continual trade deficit in the manufactures sector which constitute stress of the

Balance of Payments.

Current broad import prohibitions may give confidence inefficient high-cost

production in developed industries.

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1.6 Technology used in textile industry

Textile Manufacturing Processes

Broadly define the textile industry includes the spinning, knitting and weaving of natural

and man-made fibres the opening of textiles and the production of ready-made clothes

The most common sectors in the Egypt textile industry are cotton fabrics, wool fabrics,

man-made fabrics, synthetic fabrics and blended fabrics.

Processing of Cotton Based Textiles

Cottons and cotton-based textiles are process through three main stages, comprise

spinning, knitting or weaving and wet processing.

Spinning

Spinning is the process which converts raw fiber into yarn or cotton. The fibres are ready

and then drawn out and perverse to form the yarn which is then wound onto a reel or

cone. The spinning process is entirely dry even though some yarns maybe dyed and

finished as a final customer product.

Knitting

Knitting is approved out by interlock a series of yarn loops usually using sophisticated

high speed machinery. This process is almost totally dry though some oils may be applied

during the process for lubrication. These are removed by following processing and enter

the wastewater stream.

Weaving

Weaving is the most general method used for producing fabrics. The process is carried

out on a loom (of which frequent varieties exist) which interlace lengthwise yarns (warp

yarns) with widthwise ones. Prior to weaving the warp clothes are coated with a size to

increase their tensile strength and smoothness.

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Natural starches are the most frequently used sizes although compound such as polyvinyl

alcohol (PVA), resins, alkali-soluble fiber derivative, and gelatin glue have been use. The

sizing mix is dried on the threads and leftovers a part of the cloth until it is removed in

the following processes. Other chemicals, such as lubricants, agents, and fillers, are often

extra to impart added properties to a fabric. This process regularly adds on about 10-15

to the woven goods.

Wet Processing

The stages of wet processing of cotton textiles, both woven and knitted, are shown in

Figure 3.3 as follows:

(a) Wet Processing of Knitted Cotton Fabrics

(b) Wet Processing of Woven Cotton Fabrics

Knitted

Fabric Bleaching

Dyeing and /

Or printing

and / or

Finishing Finished

Fabric

Mercerizing

Pre-treatment

(Desiring-scouring- bleaching)

Singeing Woven fabric

Dyeing and / or printing

Finishing

Finished fabric

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1.7 Egyptian Government to Introduce Steps to Protect Textile

Industry

The Government of Egypt will soon begin steps to protect its local textile industry. For

the purpose the Customs Duty ability will meet this week and consider review of taxes

and duties on textile goods the authority‟s Director Ahmed Seedy has announce.

The Union of Industries and the Ministry of Industry had urged the Finance Ministry to

launch measures to maintain the domestic industry. Mr. Seedy listed some such actions

which include revising the volumes of import fabrics which have been exempt from

customs for the time being to bring them in lines with the actual requirements of the

units.

He also optional curtail the grace period for re-selling the fabrics before they become

likely to customs duty from two to one year. He stated that all contact relating to raw

inputs required for production would be closely monitor to avert these goods from

incoming the black market.

Further he exposed that no rise in duties would be announced earlier in order to exclude

the dealers from stockpile the commodities for selling the same at upper prices in future.

The current Government actions:

The Egypt government will pay out LE 280 million to support 120 local spinning

and weaving factories.

Textiles will be exempt from customs duty until 31 March 2011.

Subsidy to the textile exporters who use local raw material will be raised by 50%.

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1.8 Training program on Fiber Technology Spinning & Textile

Industry

Ministry of Trade & Industry and Cotton adjudication and Testing General Organization

(CATGO) announce that International Cotton Training Center (ICTC) will ways a

training program on Fiber Technology Spinning and Textile Industry. It will be held for

the period of the period from 3 July till 28 July 2011.

Lectures

Global Production & Consumption of Cotton and its relation to fake fiber.

Cotton handling stages opening from picking till baling.

Cotton harvest methods (Manual – Mechanical) and its result on the quality.

Organization of cotton filament.

Ginning manufacturing (Roller – Saw) and the effect of each on yarn & end-

product quality.

Standard procedures for model & prepare samples for testing.

International standards for testing and issuing a recognized certificate.

The effects of physical cotton fiber property on handing out stages and yarn

quality.

Maximizing the quality and reducing costs in turning & textile industry.

Pollution in cotton and its effect on the processing stages – How to get cotton free

of contamination.

The effect of wetness on cotton fiber properties, methods of testing, drawing

samples and damp testing certificate.

The required data to compare between two results

Reasons of difference between tests results.

Commercial Standardization of Instrumental Testing of Cotton (CSITC).

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Guide lines for comparing between different instrumental results

Compare between sample result with "Standard Reference Sample

High ground cotton categorization.

The effect of global cotton prices on the created yarn prices.

Conservative & Modern Spinning Systems – the most updates development in

spinning & textile industry.

Quality control & quality control chart and how to use it in avoid some

dispensation problems.

Technical terms & accurate concepts related to turning and textile technology.

The effect of wetness on cotton fiber property processing and its effect on the

class of end-product.

Adjusting wetness contents in turning and textile mills.

Testing textile properties in regular atmosphere.

The modern measure methods of wetness regain in textiles.

Recent trends in prepare cotton blend.

Field Visits

Visiting a Ginning mill.

Mena El-Bassal Cotton Exchange:

1. Methods of drawing samples for wetness testing and adjudication stages of arbitration.

2. Procedures of prepare cotton standard boxes.

3. Recognizing working procedures in the imperative mills.

Cotton Research foundation Agriculture Research Center at Giza.

Textiles merge Fund.

Visit to a modern company for spinning and weaving.

Visiting Cotton Museum.

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Practical Training

Hand pulls staple length.

Egypt Extra Long & Long Staple variety.

Practical training on cotton categorization.

Upland cotton arrangement.

Relationship between the Egyptian cotton & upland cotton.

Estimating ginning out turn.

Recognizing Egyptian cotton grades.

Methods of measuring cotton fiber properties using usual instruments.

The commercial lab for filament testing.

Contamination Testing Labs.

Wetness Testing Lab.

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1.9 Technology Change and Modification

Modification of existing processes/tools or the purchase and system of new equipment

may be considered to reduce the utilization of process chemicals energy and water. As a

result of work approved out in the SEAM Project the option outlined in the following

sections are mostly suitable for Egyptian textile mills.

Shortening the Processing Time

Replacement of conventional jigger dye by pad-develop process for dyeing when

possible.

Elimination of middle drying (e.g. after dyeing of artificial component) in dyeing of

polyester/cellulose blend textile.

Carbonization of disperse-printed and fixed goods frankly without middle washing

and drying.

Use of one class of dyestuff for coloration of both machinery of p/c blends

fabrics.

Combination of Separate Processes

Single-stage bleaching: when conservative pre-treatment processes (e.g. desiring,

scouring and bleaching) are joint together to save energy (about 60%), chemicals,

water and time.

Combination of optical brightness and heat setting operation for artificial fibre-

fabrics. Combination of dyeing and finishing in one step where the finishing bath

comprise both the finishing agent (e.g. reactant resins), certain types of dyestuffs

(soluble vat, direct, reactive, pigment), additives (wetting agent and softener) along

with a appropriate catalyst. This in turn is reflecting on declining the pollution

load as well as total production cost.

Combination of finishing and transfer printing in one step for cotton/polyester

blends: when the dry heat of printing is utilized in curing the resin.

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Lower Temperature Dyeing, Printing or Finishing

Some of the textile processes can be approved out at lower temperature than are

conservatively used with useful usage of the process chemicals. These results in

reducing procedure of both the energy and process chemicals thereby lower the

pollution load. For example the following technique can be performed:

Use of red ox system (e.g. hydrogen peroxide/glucose, ammonium

persulphate/glucose) in combination with some dyes (e.g. acid, direct, basic) can

effect dyeing of certain substrates, such as wool, viscose, nylon, cotton, silk, etc.

at lower hotness than conservative dyeing.

Use of fast acting catalysts enables the fixation of stain prints at lower temperature

around 110o -115o C against 140o -150o C for conservative printing). Use of

highly active means systems (such as MgCl2.6H2O / citric acid) has a substantial

economy in operational and energy costs of resin finishing.

Low Wet Pick-up Technology

Low wet pick-up techniques are good-looking alternatives to conservative

processing methods in textile wet processing due to the high possible savings in

both energy and water. Many approaches are suggested for low wet pick-up

technique a selection of which follows:

Foam technology: where water is replaced by air in the form of foam in chemical

recipes and formulations. This helps to save power, decrease chemical costs,

increase manufacture and minimize effluents and pollution. Foam technology can

be useful in sizing, dyeing, printing and finishing processes. By suitable

combination of foam agents stabilizer and process chemicals the behavior process

can be easily achieved.

Spray technique: where sprays of strong solutions are applied to the goods to

achieve treatment such as dyeing and finishing. The use of electrostatic systems

was introduced by Sandoz to improve consistency and distribution.

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Use of high performance squeezers: to lower the wet-pick-up on the material or

yarns. These squeezers can be useful in sizing dye and finishing.

Vacuity extractors can also be used to lower the wetness content of a textile

material before it enters the dryer. These are most efficient on fairly porous

artificial materials.

Use of Heat Exchangers

Heat exchangers should be used mainly since reduction in water use means an increase in

overflow high temperature. The textile industry also needs to practice heat recovery to

avoid thermal shock to handling plants caused by hot wastewater effluent.

Radio Frequency Technique

In this technique radio-frequency (RF), e.g. micro-wave and Infra Red are use for

freshening loose stock letters and hanks that have been given opening or dyeing

treatments. This method is a commercial reality with verifiable cost energy and time

savings.

Computer Technology

Computer control and other forms of mechanization can be introduce to dyeing

processes in order to allow greater reproducibility and optimized use of dyes and

additives in dyeing formulations. The expansion of the necessary computerized control

systems will be costly but it has been report that it can be money-making within a

realistic time provided that the staffs are well trained and capable of increasing the

systems.

Solar Energy

Use of solar energy as an option for the conventional energy is a hopeful approach for

reducing energy use needed for heating at process water.

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1.10 New technology centre for the faculty of engineering

The Egyptian Prime Minister Dr. Ahmed Nazif opened the New Textile Technology

Centre situated in the campus of the Faculty of Engineering Cairo University in Sheikh

Zayed City on the 27th of May 2008. This is the latest knowledge center in this sector at

a national level. The response was attended by Mr. John Yates Medibtikar Programmed

Manager.

The centre is set up to provide the best utilization of factories equipments for spinning,

weaving and dyeing which were donate by the Ministry of Housing to Cairo University

as a part of the new property of the Faculty of Engineering in Sheikh Zayed City. These

equipments value is beyond 5 million Dollars.

During July 2006 an agreement was signed for collaboration with the Ministry of Trade

and Industry and the Industry Modernization Center. Through this agreement the

sufficient funds have been to be paid for the treatment of these labs and the international

adoption of their tests and training programmers to serve the Egypt industry and raise its

competitiveness.

This technical center represent a unique partnership between academic institution and

government agencies and self-governing and private sector where it is administer by the

Governing Council attended by the industrial leaders in both private and public in the

textile sector.

The Center‟s activities can be classified into main two sectors primary sector which is the

technology sector and the secondary sector which is the testing and value control for the

technical sector sections of textile spinning, weaving and dyeing. The testing and quality

control sector has a globally accredited laboratory which contains many devices that is

capable of performing arts the required tests for the fashion and textiles export.

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1.11. Egypt Textile Machinery Industry: Current scenario and future

Outlook

Egypt Textile engineering industry (TEI) is afraid the condition improved during 2010-11

with a better performance set up by the textile industry.

Capacity utilization TEI

As per the survey of the Textiles working group during 2008-09 the estimated annual

install capacity of TEI was Rs. 5065 crores. The total permanent production of textile

machinery parts & accessories during 2010-2011 recorded a raise of 35 per cent at Rs.

3563 crores as next to Rs. 2000 crores achieved during the earlier year.

Capacity deployment increased to 51 per cent in 2010-11 compared to 23 per cent in the

preceding year. Demand depression faced by the industry had severely affected capacity

utilization during the previous years. Capacity utilization might develop further during

2011-12.

Imports of textile machinery have rise from Rs. 3000 crores during 2009-10 to Rs. 35000

crores (approximate) during 2010-11.

Exports during 2010-11 had been approximate at Rs. 450 crores against Rs. 400 crores

achieve during 2009-10. With the overall development of the industry exports are

expected to develop in the coming years.

The welcome gush in demand from the textile industry during 2004-2007 had confident

TEI to develop and expand the machinery developed capacity. This was mostly so in the

spinning machinery sector. Units in the industry had been determined hard to step up

production and lengthen the delivery period. Due to the recessionary pressure in the

subsequent years the delivery periods were wiped out. At present demand is again

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looking up and it is our earnest attempt to meet the demand in quantum quality and show

coupled with effective after-sales service.

Current situation

The Government policy of encouraging composite mills during the 1960s, 1970s and

1980s and thereby relegating the weaving and processing industry to the decentralized

sector was a de facto support for low technology machinery. Further the earlier condition

policy of the Government in hosiery and garment industries resulted in creation of

small/low tech units, and also units were confident to undertake large-scale second-hand

machinery imports.

Even today the preference of a great section of the textile industry to imported second-

hand/used machinery is touching the growth of domestic machinery manufacturing.TEI

needs full support from the Government so that it has a level in performance field and

becomes aggressive enough to supply the latest technology machines to the textile

industry.

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2. Company Analysis

2.1 Textile Manufacturing Companies

Geographic Distribution of Companies in the Textile Sector

Spinning and

Weaving

Wool, Natural

and Synthetic

Dyeing,

Printing and

Tricot Ready-

Made

Governorate Manufacturin

g

Manufacturing Finishing Manufacturing garment

s

Cairo 132 21 35 301 277

Alexandria 4 10 17 151 72

El-Kaliobia 305 8 16 11 29

El-Gharbeya 128 18 3 15 11

Assyut 2 - - 2 1

El-Bohaira 19 3 2 - -

Beni-Suef 2 - - - -

Port Said 1 1 - 1 2

Giza 6 1 1 19 54

El-Dakahleya 21 - - 27 5

Dumyat 3 - - - 1

Sohag 2 1 - - -

El-Suez 1 - - - -

El-Sharkeya 2 5 2 3 7

Menofeya 3 3 1 1 1

The Egyptian textile industry is subject by 31 large public enterprises. The mass of these

are primarily occupied in spinning and weaving although many also carry out dyeing,

knitting, finishing and the manufacture of ready-made garments. These public companies

account for 100 of spinning, 70% of weaving, 40% of knitting and 30% of the complete

goods. They also control in terms of labor volume of production and owned capital. For

occurrence Misr for Spinning and Weaving is the largest venture in the country and

generate more than 25%.

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There are over 2300 private sector factory which are members of the Egypt Textile

manufacturer Federation (ETMF). There are also many small factory and workshops

who are not ETMF member as well as informal workers which are not integrated in any of

these groups. The private sector at present dominates the market in terms of knitted fabric

and ready-made goods. This incorporate information on the number of spindles,

number of looms, number of workers and the main products artificial at these companies.

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2.2 Top companies in Textile industry in India:

Bombay Dyeing

Fabindia

Grasim Industries

JCT Limited

Lakshmi Mills

Mysore Silk Factory

Arvind Mills

Raymond‟s

Reliance Textiles

Some details regarding these top players in the textile industry in India is given below:

Bombay Dyeing:

Bombay Dyeing came into continuation in the year 1879 as a small company trade with

Indian spun cotton yarn dip-dyed by hand and now the company has grown-up into one

among the top textile company in India. They are one of the trust and valued brand name

in the textile industry and some of the products artificial by them are:

Sports wear

Kids‟ wear

Women‟s wear

Men‟s wear

Home furnishing like sofa covers and screen clothes

Bath towels

Bed spreads and sheets

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Fabindia:

Fabindia is operating from its control center in Delhi and they are popular for their

customary techniques and hand-based processes. They are acting as a link between craft-

based rural producer and modern urban markets which in turn create a wide range of rural

service thereby preserving the custom of India. Their textile products are reasonably

priced, fashionable, craft-based and natural.

Grasim Industries:

Grasim Industries is a supplementary of the popular Adyta Birla Group and they are one

among the major private sector companies in India. The company began its journey as a

textile company in the year 1948 and now they are commerce with different products like

cement and chemical in calculation to textiles.

JCT Limited:

JCT Limited is one among the important manufacturers of filament yarn and textiles in

India and they are the supplementary of Taper Group. Some of their best features like

high normal of performance, work ethic and values have made this company to arrive at

this height.

Lakshmi Mills:

Lakshmi Mills came into survival in the year 1910 and this company has contributed to

the development of Textile Industry in Tamil Nadu in general and to the region of

Coimbatore in Tamil Nadu. Right from their beginning they are working towards their

prime objectives of customer approval and quality production and because of this they

have reach this height. The company is looked with great respect since it not only urban

itself but has also let ways for other company to develop in this sector.

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Mysore Silk Factory:

Mysore Silk Factory is located in the city of Mysore in Karnataka and they are commerce

with the production of quality silk textiles for end-user use. Different high end machines

are being used by them for the production of value silk clothes. The company began its

drive in the year 1930 with just 10 looms and now they have 159 looms, pirn machines,

warping machinery and several other preliminary machines as well.

Arvind Mills:

Arvind Mills is acting as trendsetting company in different styles of textiles and they are

now acting as the same of a wide range of life-style goods. The company has carved out

of a forceful strategy to develop their current strategy by setting up world scale

garmenting offering and facilities.

Raymond’s:

Raymond‟s group came into continuation in the year 1925 and within a short period of

their organization they have emerged as a global name in the textile industry. A number

of Group Company is operating under Raymond‟s and some of their accepted brands are:

Color Plus

Park Avenue

Manzoni

Raymond Premium Apparel

Reliance Textiles:

As we all know, Reliance is a big name in a number of industry in India and they have

made their mark in the textile industry as well. Their flagship Vimal, which was re-

launched in the year 2007-08, is one among the trust brand name in the textile industry.

They are acting as one among the top modern textile complex in the whole of Asia and

they are trying out new product plan which includes the following products:

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Production of Mosquito revolting nets according to the normal laid by World

Health Organization

Auto-textiles & home furniture

Water-repellent and fire-retardant tent fabric to help out police and security

service

These top groups of actors in the textile industry add a great to the development of the

country‟s economy by contribution to the export industry of the country and by

contribution wide range of employment opportunities.

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3. Comparison of India and Egypt textile industry

3.1 Weaknesses and Opportunities of Egypt

Compared to public companies many private companies are very dynamic they put

together new technologies develop a network of retail businesses counting abroad and

achieve excellent export results.

The special agreement with Europe and QIZs Agreement with the United States are

significant factors that support the exports. Besides the creation of distant companies

(India, Chinese.) in many free zones, the strong domestic bazaar and the state supported

Research and Development activities are among the other factors that help expand the

sector.

However the industry faces many confront due primarily to the comparatively new

renaissance witness by the sector on the one hand which require the formation of the

necessary means to take action to its expansion needs in terms of training and technical

help in order to increase productivity and to the relatively nonexistent rivalry in the

public sector on the other hand.

The main problems though facing Egypt textiles are more internal and structural than

external. Earlier Nassir‟s completion of “socialist” statist policies made Egypt firms

mutually respectful overstaffed and with poorly skilled workers state industry have been

slow in adapting to technological changes including the completion of computers and

software.

The result of these structural weaknesses is that despite Egypt‟s low wages the state

industry outputs prices have remain relatively high. The private firms that do exist are too

trivial to make up for the weaknesses of the public sector and have not done a improved

job than the public sector industry in implement and updating technologies which

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Suggests that privatization might not always be the magic answer at least when not

accompany by more radical political reform.

Industry is subject by family enterprise structure. There are many projects to develop

essentials of the improvement system. However, they have been slow to take-off and they

look to be subjugated by „real-estate‟ logic.

The country‟s global profile has better hence hopeful foreign investments, the possibility

of repatriating invest capital and profits, tariff cuts, corporate tax reform, support of

exports, creation of special fiscal free trade zones and protection of academic property. It

is hoped that additional privatisation will lead to a further add to in foreign investment in

Egypt.

Some companies such as ORASCOM are very big and are forcefully increasing on a

global basis in the region. Expansion of new manufacturing areas and IT focus offers

room for growth.

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Weakness and Opportunities of India

Knitted clothes manufacturing has remain as an extremely fragmented industry. Global

players would favor to source their entire responsibility from two or three vendors and

the Indian garment units find it tricky to meet the capacity necessities.

Industry still plagued with some past regulations such as knit garments still remaining as

a SSI domain. Labor force giving low output as compared to other competing countries

Technology obsolescence despite measures such as TUFS, Low bargain power in a

customer-ruled market.

India gravely lacks in trade pact memberships which lead to limited access to the other

major markets. Indian labor laws are relatively adverse to the trades and there is an urgent

need for labor reforms in India.

Low per-capita domestic consumption of textile representative important potential

growth Domestic market very sensitive to fashion fads and this has resulted in the

development of a reactive garment industry.

India's global share is just 3% while China controls about 15%. In post-2005 China is

expected to capture 43% of global textile trade. Company need to think on new product

developments. Increased use of CAD to develop scheming capabilities and for rising

greater options.

The textile industry is undergo a most important reorientation towards non-clothing

application of textiles known as technological textiles like thermal defense and blood-

absorbing materials seatbelts paste tape and multiple other particular products and

applications. These technological textiles are an emerging industry with a possible to

reach a size of US $ 127 billion in 2010 and hold a great assure for Indian textiles

industry.

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3.2 General features of the access to the Egypt and Indian

market

Operator characterizes Egypt as a much stopped market. For example Spanish operator

describes the Egyptian market as being as closed as the Pakistani and Indian markets (in

interview). Few barrier are mention but they are complex and important some operators

stress their inability to export to Egypt (embargo or intolerable tariff barrier) while others

who do export are facing important technological barriers which also hamper (or stop)

their exports (labeling and production necessities for import). As a Mediterranean partner

of the EU Egypt is in a specific position.

Operators characterize India as one of the most limited market for their exports. Given

the low level of current exports their information on the trade barriers is quite limited.

The assignment in India established the subsistence and impact on the following trade

events high customs duties and additional import taxes onerous clearance official

procedure. However the SIL licensing system was found to be less warning than

operators claimed. In adding the realization of marking rules which are warning does not

come into view for the time being as a trade barrier.

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3.3 Domestic structure of the textile and clothing industry in

Egypt and India

Textile and clothing sector is of high significance for Egyptian economy and service.

Employ of the sector covers about 1 Mio personnel and accounts for 30% of Egypt total

manufacturing labor force 44. The sector is composed of 31 public enterprise and about

2356 private enterprises registered and members of the Egypt Textile Manufacturers

Association. In addition there are thousands of small factories and workshops.

Most of the domestic productions distributed on the domestic market even if exports have

continuously increased. Since the early 60‟s textile sector was limited to public

companies. Textile companies had to fulfill government supplies and to provide low price

products for domestic consumption. For years the industries was affected by this

production process and suffer from lack of technological innovation. From the 1980‟s the

Egypt textile industry was progressively privatized but still suffer from trade limits on

textile imports and machinery.

In the 1990‟s the textile sector was mainly affected by the General restructuration plan of

the economy (ERSAP) as well as other unsettled problems such as high level of

smuggling and increased price of energy. Public companies were not able to adjust. They

currently suffer from increases in their debts decline of their financial status deficiency in

their current accounts and low investment. Privatization is still under way and must be

achieve by the year 2000.

The textile and clothing sector is of vital significance for the Indian economy employment

and exports. It is based mostly on two raw materials cotton and jute. About Mio Workers

are employed in the sector. The textile industry urbanized significantly over the last 15

years in terms of capacity yarn produce and cloth output. Indian industry is facing some

problems.

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3.4 Egyptian Textile Imports and Exports

Exports

In 2009 Egypt‟s total exports were EGP 6.87 bn1 or US$ 1.2 by 75% (US$ 0.98) of

exports leaving to garments. Approximately 45% of total exports went to the US and

45% to the EU. Garments are the main product imported by both the EU and the US

though the EU had 13% of its imports in yarns as opposite to 3% for the US and 5% in

fabrics as opposed to 2% for the US explanation the turn down in the exports of yarns

and fabrics (reviewed later in the report) in light of the decrease in the European textile

industry. With 90% of exports going to the EU and the US Egypt is barely benefit from

its regional trade agreement and nearby markets intense both raw materials (yarns and

fabrics) and finished products. Home textiles which are mainly put on from Egyptian

cotton characterize 12% of total exports confirm the fact that Egyptian cotton is yet to be

capitalized on in Egypt‟s plans for increase

Imports

In the period from 2005 to 2009 total textile imports greater than before by 1.7 folds.

Problem and temporary admission imports stood at EGP 0.85 bn in 2009 presentation an

increase of 15% from 2008. Several comments have been made by the manufacturing

concerning informal imports, however by scheming per capita use of affirmed fibers

which is equal to 4.7 kg/person and the average per capita consumption of comparable

75%

12%

8%2% 3%

Garments

Home Textiles

Cotton Yarns

Cotton Fabrics

Textiles

Page 38

countries (Africa Middle/East and Asia) 3.5 – 4.5kg/person, it is possible that the

problem of illegal imports is not as important as is commonly believed. Having said that,

extra research is being undertaken to verify these conclusion and further understand the

actual size of smuggling difficulty.

Indian Textile Imports and Exports

Exports

The target for textiles exports for 2012-13 at first set at USD 38 billion have been

revised upwards to USD 40.50 billion following the Foreign Trade Policy Annual

addition in June 2012. The export Council-wise targets are (i) Apparel Export Promotion

Council (AEPC) ± USD 18.00 billion (ii) The Cotton Textiles Export Promotion Council

(Texprocil) & The Power loom Development Export Promotion Council (PDEXCIL) ±

USD 9.00 billion (iii) The Synthetic & Rayon Textiles Export Promotion Council

(SRTEPC) ± USD 7.00 billion (iv) Export Promotion Council for Handicrafts

(EPCH) ± USD 3.30 billion (v) Handloom Export Promotion Council (HEPC) 0.40

billion (vi) Wool & Woolens Export Promotion Council (W&WEPC) ± 0.75 billion

(vii) National Jute Board (NJB) ± 0.50 billion (viii) Carpet Export Promotion

Council (CEPC) ± 1.05 billion (ix) Indian Silk Export Promotion Council (ISEPC) 0.50

billion.

Imports

The total imports of T&C products by India reach US$ 4.94 billion during the

almanac year 2011 Man-made filament was the biggest import between T&C items,

with a share of USD 0.78 billion followed by impregnate amongst T&C items with a

share of USD 0.78 billion followed by impregnate textile fabric (USD 0.74 billion) and

man-made staple fiber with a share of USD 0.54 billion. The imports have greater than

before by 26.08% during the calendar year 2011 in dollar terms over the matching period

in calendar year 2010.

Page 39

3.5 Vision and objectives of an Indian textile industry

(2007-2012)

To build world class, state-of-the-art, developed capacity and achieve a main global

standing in produce and export of textiles and clothing.

To ensure the growth of the Indian textile industry at 16 percent per annum in value

terms, to US$ 115 billion by the end of the Eleventh Five Year Plan.

To secure a 7 percent share in worldwide textile trade by the end of the Eleventh Five

Year Plan. To equip the textile industry to endure the pressures of import diffusion

and maintain supremacy of the growing domestic market.

To enable Small & Medium enterprise (SMEs) to achieve competitiveness to face the

global situation with confidence. To provide a conducive policy setting which will

give confidence innovation, augment R&D efforts, and improve output through the

up gradation of technology manufacturing process and the development of human

resources. To set up the Indian textiles industry as a creator of globally competitive

value added products.

OBJECTIVES

To have sustainable growth and progress of Textiles Sector in the country.

Overall capacity adding in the Textile Industry to be greater than before by 10% per

year. Aim at overall fibre manufacture growth rate of seven percent per year. Get

overall cloth production growth rate of 9% per year.

Achieve textiles and attire developed growth rate 10% per year. To achieve textiles

and apparel export expansion rate of 15% per year.

To improve output across the entire textiles value chain.

To achieve comprehensive growth by improving productivity in handlooms,

handicrafts and sericulture and by ensuring interests of weavers and handicrafts

artisans.

Page 40

To ensure included development and support of jute sector. Jute production to grow

at 3.6% per year.

To expand Sericulture & Silk Sector.

Raw silk production targeted to grow at an annual average rate of 4.5% during 2010-

15

To promote Growth and expansion of technical textiles in India.

Production of technical textile to grow at 11% per year till 2012-13 and thereafter at

6-8% per year till 2020.

To expand Wool & Woollen Textiles Sector. Wool production to grow 1% per year.

To develop and change the decentralized Power looms Sector. Power loom cloth

manufacture under attack to grow at 10% per year.

Vision and objectives of an Egypt textile industry (2007-2012)

Vision Be the Hub in Textiles teaching and Technology Transfer for Global

Competitiveness. To equip the textile industry to endure the pressure of import

access and maintain dominance of the rising domestic market.

Objectives

Demand Based progressing Education and particular Training.

Establish Industry Linked credited Testing/Analysis Lab.

Create expertise Transfer Focal Point Based on Needs.

Unite consult Services from FECU and capital in Unique combined Project.

Network Domestic and global Expertise to Serve the Industry

Page 41

4.1 Relations of India-Egypt

India and Egypt are two of the world's very old civilization with a history of close

contact. India and Egypt enjoyed a very close relationship during the Nehru-Nasser era

and signed a Friendship Treaty in 1955. The birth of the Non-Aligned group was inter

alia the result of this association. Since the 1980s, there have been four Prime Ministerial

visits from India to Egypt: Sheri Rajiv Gandhi (1985); Shri P. V. Narasimha Rao (1995);

Sheri I. K. Gujral (1997); and Dr Manmohan Singh (2009). Prime Minister Dr

Manmohan Singh participated in the XV NAM meeting held in Sharm EI-Sheikh in July

2009.

Egypt President visited India in 1982, in 1983 to attend the NAM Summit and in

November 2008 on a two-sided visit during which the follow documents were signed

exile Treaty conformity on elimination of visa obligation for holders of diplomatic

special and official/service passports MoU on Cooperation in the ground of Health &

Medicine MoU on collaboration in the examination and Use of Outer Space for Peaceful

Purposes MoU on Trade & technological collaboration.

High level exchanges with Egypt continued after the Egyptian Revolution and the

Egyptian Government under the Supreme Council of Armed Forces showed keen interest

to continue close relations with India; since March 2011 three Ministerial visits have

been exchanged with Egypt. Since 2006, several high-level visits have been exchange

between India and Egypt. From the Egypt side Minister of State for Military Production

Minister of infrastructure and IT Minister of State for Administrative Development and

the overseas Minister (2006) the Minister of Social commonality and Minister of

Tourism(2007) Minister of Trade & manufacturing Minister of Agriculture & Land

recovery and Minister for global Cooperation (2008) a allocation from the High Election

charge Minister Trade & Industry to add in the WTO Ministerial Meeting and Minister of

power & Energy (2009) and Foreign Minister (2011).

Page 42

Egypt has usually been one of India's most important trading partners in the African

continent. The India-Egypt Bilateral Trade union has been in operation since March 1978

and is based on the Most Favored Nation clause. Two-sided trade has grown significantly

in past five years. Since FY 2006-07 India has been in the middle of the top five

importers of Egypt products.

This is mostly on account of import of oil and gas from Egypt. Exports from India to

Egypt greater than before from USD 0.43 billion in FY 2006-07 to USD 1.49 billion in

FY 2010-2011. Indian imports from Egypt greater than before from USD 1.53 billion in

FY 2006-07 to USD 1.65 billion in FY 2010-11. The Bilateral Investment Protection

Agreement between India and Egypt entered into force in November 2000. India has a

total investment of approximately USD 2.5 billion in about 50 companies/ projects. More

importantly Indian speculation in Egypt has not been unfavorably affected by the Egypt

Revolution.

In fact some Indian company started in 2011 new production services in Egypt. Egypt

investment in India is about USD 30 million by El Sewed group an Egyptian company

manufacturing Electric meters in India.

Out of the 50 Indian companies operating in Egypt approximately 25 companies are joint

ventures and wholly owned Indian subsidiary. The rest of the Indian companies are in

service in Egypt through their delegate offices and executing various projects for

Government of Egypt and Governmental organizations. The Indian companies are in

service in almost all fields like textiles and garments, power, chemicals including

specialty chemical, adhesives, pharmaceuticals, information technology, paints,

consumer goods, healthcare, PVC, caustic soda, PET Resin, plastics, paper, packaging.

Indian company is providing direct and indirect service to approximately 35000

Egyptians. The direct employment generate by Indian companies is more than 21200 and

not direct employment more than 13500.

Page 43

4.2 India and Egypt Economy Relations

Occupy the northeast corner of the African continent Egypt is bisecting by the highly

fertile Nile valley where most financial activity takes place. Egypt's economy was highly

central during the rule of former President Gamal Abdel NASSER but has opened up

significantly under former President Anwar EL-SADAT and current President Mohamed

Hosni MUBARAK. Cairo from 2004 to 2008 aggressively pursued economic reforms to

draw foreign investment and facilitate GDP growth, which averaged about 7% per year.

The global financial crisis slows the reform efforts.

The budget deficit climb to over 8% of GDP and Egypt's GDP growth slowed to 4.6% in

2009, predominately due to summary growth in export-oriented sectors including

developed and sightseeing and Suez Canal revenues. Egypt's economy was particularly

hard hit with slowing production and a decrease in exports amid the unrest that followed

the passive revolution and a sharp fall in tourism revenue which is a main source of

foreign currency for Egypt. The Egyptian financial system grew 2.2 per cent in the

previous 2011/12 fiscal year.

The World Bank has predicted the economy will get bigger by 2.6 per cent in 2012/13. In

2013 however the IMF estimates Egypt‟s economy will produce by 3.3 percent. Egypt‟s

rise however, is seen to oppose the inflation trend of its neighbors rise is projected to

surge to 12.1 percent in 2013 up from 11.1 percent in 2011.

Bilateral Relations

India and Egypt are two of the world's ancient civilizations with a history of close

contact. Egypt has traditionally been one of India's most important trading partners in the

African continent. The India-Egypt Bilateral Trade Agreement has been in operation

since March 1978 and is based on the Most Favored Nation clause. Bilateral trade has

grown significantly in past five years. Since FY 2005-06, India has been among the top

five importers of Egyptian products.

Page 44

India has emerged as one of Egypt‟s largest deal partners. Nearly 95% of Egypt‟s exports

to India comprise oil and gas. Coking coal raw cotton, rock phosphate, and marble

comprise the other import items. The detailed trade figures on our trade with Egypt

(given below) give an idea of the scope that exists in this market. The two-way trade

between India and Egypt has exposed significant growth in new years. In fact, it has

grown more than 60 percent during the last five years from US$ 3384.35 million in 2007-

08 to US$ 5430.05 million in 2011-12.

India‟s exports to Egypt have full-grown almost 80% from about US$ 1398.83 million in

2007-08 to US$ 2421.89 million in 2011-12. Egypt's exports to India throughout these

years have grown approximately 50% in last 5 years to US$ 3008.16 million in 2011-12.

The trade balance continue to be in Egypt‟s favor though India‟s exports are also rising as

well

.

Financial

Year

Total Exports

to Egypt

US $ Million

Total Imports

from Egypt

US $ Million

Total

Trade

US $ Million

2007-08 1398.83 1985.52 3384.35

2008-09 1699.86 2121.33 3821.19

2009-10 1403.88 1692.36 3096.23

2010-11 1982.43 1354.56 3336.99

2011-12 2421.89 3008.16 5430.05

India and Egypt are making robust efforts to renew and strengthen the bilateral economic

and trade relations. The relationship between the two countries has evolved into a

significant partnership in the economic and commercial sphere. At the same time, Indians

have emerged as important investors in the Egypt, and India as an important export

destination for the Egypt manufactured goods.

Page 45

Trade in the current year

During the current financial year i.e. April-Sep, 2012-13, exports are to the tune of US$

1414.61 million whereas the imports from Egypt are to the tune of US$ 1391.39 million.

The total trade is US $ 2806 million.

Top items of Exports from India:

The principal Indian export items include crude oil, LNG, raw cotton, rock phosphate,

coke and semi-coke of coal.

Top 5 items of Imports by India:

The top Indian imports during 2011-12 were, cuts of boneless bovine frozen meat, diesel

fuel, two & three wheelers, cotton/synthetic yarn, carbon electrodes.

Indian Companies in Egypt

1. Alexandria Carbon Black

2. Alexandria Fiber Co.

3. TCI Sanmar

4. SCIB Chemicals (Asian Paints)

5. Oberoi Hotels

6. Egyptian Indian Polyester Company (EIPET),

7. Flex P Films(Egypt) SAE

8. Dabur Egypt Limited

9. Galaxy Chemicals(Egypt) SAE

10. Essel Propack Egypt

11. Kishco & Khodeir Paper Mill

12. Auto Tek Valves

13. WIPRO Information Technology (Egypt) SAE

14. Kirloskar Egypt

Page 46

15. Egypt Global Silicates

16. Nile Tex

17. Amereya For Plasticizers

18. Ranbaxy Egypt Limited

19. Marico Egypt

20. MEL Consumer Care, (Marico)

21. Egyptian Carton Manufacturing Co.

22. Indo-Med Company for Garments

23. Velocity Apparelz

24. Pidilite Industries Egypt

25. Klac Creations Garments Factory

26. Misr Hytech Seeds

27. Britlodge Holdings Ltd.

28. Ashok Leyland

29. Gujarat State Petroleum Corporation Ltd (GSPC) Egypt

30. Allied Exports

31. Essar Global Limited

32. Joher International

33. Forbes Marshall

34. Sutherland Global Services

35. State Bank of India

36. Air India

37. Bavarian Auto

38. TATA Motors

39. Kernex Microsystems

Page 47

Conclusion

The textile industry is one of the oldest in the world. Today the textile part in Egypt

consists of well over 3000 company range from the very small (employing less than 8

laborers) to the very large (greater than 20000 laborers). These are both public and private

sector companies.

Commonly used raw materials include: Natural fiber based on cellulose (e.g. cotton,

flax, jute, hemp etc.) or protein (e.g. wool, and silk).

Technological progress in all the sectors of the country has changed the entire socio-

economic situation. Particularly in the textile sector there is a lot of technological

development on Distribution and communication channels, Technology incentive,

Computerization, Rate of technological change, Environmental and natural aspect,

Barriers to entry, Production level and Outsourcing decision.

The Government of Egypt will soon begin steps to protect its local textile industry

there are better performance in textile industry.

The Egyptian Prime Minister Dr. Ahmed Nazif opened the New Textile Technology

Centre situated in the campus of the Faculty of Engineering Cairo University in

Sheikh Zayed City on the 27th of May 2008. This textile technology centre campus

established better performance of next year to year working condition.

Egypt Textile engineering industry (TEI) is the condition improved during 2010-11

with a better performance set up by the textile industry.

Page 48

To build world class, state-of-the-art, developed capacity and achieve a main global

standing in produce and export of textiles and clothing industry.

To equip the textile industry to endure the pressure of import access and maintain

dominance of the rising domestic market.

India‟s exports to Egypt have full-grown almost 80% from about US$ 1398.83 million

in 2007-08 to US$ 2421.89 million in 2011-12. Egypt's exports to India throughout

these years have grown approximately 50% in last 5 years to US$ 3008.16 million in

2011-12. The trade balance continues to be in Egypt‟s favor though India‟s exports are

also rising as well.

Operator characterizes Egypt as a much stopped market and Operators characterize

India as one of the most limited market for their exports.

Textile and clothing sector is of high significance for Egyptian economy, service and

the textile and clothing sector is of vital significance for the Indian economy

employment exports.

Reference

httpwww.indiantextilemagazine.inuncategorizedindian-textile-machinery-industry-

current-scenario-and-future-outlook

httpwww. http://www.tmmaindia.net/report/c-strategy-

httpwww.unido.orgwhat-we-docross-cutting-issuessouth-south-cooperationinitiative-on-

cottonegypt.html

egyptian govt to introduce steps to protect textile industry document in word file to

online source used

httpimages.library.wisc.eduHumanEcolEFacsMillineryBooksMBEllsworthTextilesrefere

ncehumanecol.mbellsworthtextiles.i0009.pdf

httpwww.ripecap.netUploads463.pdf

httpwww.Training program on Fiber Technolog.pdf

http://www.ficci.com/international/75182/Project_docs/India-Egypt-Economic-

Relations.pdf

http://www.mea.gov.in/Portal/ForeignRelation/Egypt-January-2012.pdf

www.egypt.com

www.india.com

http://texmin.nic.in

www.egyptministry.com

v.

A

Global Country Study Report

On

“The Role of Economical & Technological Environment of Egypt”

In the Partial Fulfillment of the Requirement

Of the Award of the Degree of

Master of Business Administration

In

Gujarat Technological University

Semester III (2011 – 2013)

Submitted By:-

Name Enrollment No.

Atish S. Shah 117240592003

Jacky P. Shah 117240592007

Harshit B. Shah 117240592011

Guided By:-

Dr. Hiteshkumar Shah

Asst. Prof. KSMCS

Submitted To:-

K. P. Patel School of Management & Computer Studies

Jeevanshilp Campus, Kapadwanj.

Affiliated To

Gujarat Technological University

I

Students’ Declaration

We Atish Shah, Jacky Shah & Harshit Shah hereby declare that the report for

Global Country Study Report entitled “The Role of Economical & Technological

Environment in Egypt” is a result of our own work & our indebtedness to other work

publications, references, if any have been duly acknowledged.

Place: - Kapadwanj

Signature:-

Date: - 19th Nov. 2012.

Atish S. Shah

Jacky P. Shah

Harshit B. Shah

II

Preface

“Experience is the best teacher.” This saying has played a guiding role in

including as a part of the curriculum of the M.B.A Programs of the Gujarat

Technological University. Quite frequently these days’ people talk of practical

knowledge, both in academic institutions and outside. At each and every aspect in life we

require some sort of theoretical and practical knowledge. It means only classroom lecture

may not be enough to get the proper knowledge either in the business field or social life. This

global country report on various PESTAL Analysis of Egypt in Semester -3 would allow us to

know the various environmental factors study and how to interlink that county or to interpret

the study in our countries context, and it allow the student study real Business Environments.

We know that Project is for the development and enhancement of the

knowledge in this particular field. It can never be possible to make a mark in

today’s competitive era only with theoretical knowledge when industries are developing

at global level, practical knowledge of administration and management of business is

very important. Hence, such kind of platform is of great importance for a student and full

efforts should be made to capitalize on it.

With a view to expand the boundaries of thinking, we have undergone Global

Country Study Report (GCSR) in second year of MBA (sem-3) .We have made deliberate to

collect the required information and fulfill project objective.

III

Acknowledgement

Any work accomplishment is seldom on person achievement there are usually

many people behind it who contribute to its goodness in form or the other. To

acknowledge is very great way to show your gratitude towards the people who have

contributed in your success in one or other way.

We find words inadequate to express our gratitude to Mr. Hitesh Shah (Asst.

Professor) for providing us an opportunity to carry out our Global Country Study Report

(GCSR) for his continuous guidance and supervision and support during the project. We

sincerely thank him, despite his tight schedule spared time for discussions and gave basic

ground rules and directions, without which completion of this project would have been

impossible.

We are highly grateful to the management of K. P. PATEL SCHOOL OF

MANAGEMENT for giving us the opportunity to work on this Project and in the process

enriches ourselves with immense learning on all aspects.

At last but not the least we also express our feeling of gratefulness to all those who

directly or indirectly have inspired us and helped us to prepare this report.

IV

Executive Summary

Egypt's Economical & Technological system here refers to the economical &

technological structure, GDP, inflation rate, consumer index, technological changes &

diffusions that are implemented in Egypt's mainland and regulate the state power,

government, and the relationships between the state and society in the People's of Egypt since

its founding. This report contains both economical and technological situation in Egypt

country the objective was to find the opportunity of business & most successful sector of

Egypt. The aim was to go through this report how the different business of different

sectors runs in Egypt and what government policy and political situation are benefited to

Indian country. As per the report the economical & technological situation is having well

for Indian business. Project work helps to deal with the real government policy and party of

different country like Egypt. Project report consists of the brief description of an Egyptian

economical tradition, different technological principal in Egypt, and also constitutional frame

work of Egypt section which provide the overview and background information about the

country different aspects, other section of the report like different economical condition the

market for science and technology and different trade business of Egypt. The graph provides

different information like GDP, CPI, Inflation rate, government budget and annual

growth rate on central government these are very useful to assume or forecast how the

Egyptian economical and technological situation are strong for developing the business

opportunities for India any developed sector.

Macro economics enriches our knowledge of the functioning of an economy by

studying the behavior of national income, productivity, investment, savings and

consumption. Furthermore, it throws much light in solving the problems of joblessness,

inflation, economic instability and economic growth. The concept of stock and flow are

mainly used in the macro economics or in the theory of income, productivity and

employment. Lastly, both the concepts of stock ad flow variables are very significant in

modern theories of income, interest rate, business cycles etc.

In 2009, the globe found itself in the most horrible economic recession while the

2nd

World War, with GDP growth dropping to a negative 1.9% after the 4.0% in 2007 and

2008 respectively. The key reason in this decline was the vice-chief meltdown and

associated credit crunch which originated in the USA, but then spread to the rest of the

world. This resulted in a loss of confidence, tight credit, declining demand, reduced

spending and investment, declining property prices and significant job losses worldwide.

The impact of the recession was felt most acutely in the advanced economies of

the world, despite unprecedented fiscal and monetary stimulus measures instituted by

governments to ameliorate the consequences of the credit crisis.

V

During the fourth quarter of 2009, the Egypt economy started emerging from the

recession that had started in the same period a year earlier. In this quarter the year-on-year

decline in economic activity of advanced economies was only 0.7%, compared to 4.6% in

the first quarter. It is expected that positive growth will be recorded from the first quarter of

2010, with most major developed economies participating in this turnaround. However,

recovery will be slow – economic growth of about 2.0% is expected in this economic

grouping in 2010.

Although not impervious to conditions in advanced economies, emerging

economies fared significantly better in 2009. Egypt and India did particularly well, with the

latter recording a GDP growth rate of 4.6% in 2009 & 5.1% in 2010.

Commodity demand depended increasingly on economic growth in Egypt and, to

a lesser extent, other emerging economies in 2009. Expansion in Egypt slowed only from

9.6% in 2008 to 8.7% in 2009, mainly from decreasing international trade. In line with

developed countries, Egypt also injected massive stimulus into the economy in the form of

fiscal, monetary and fixed investment measures to arrest the decline in economic activity.

These measures proved very effective, with GDP growth accelerating from 6.2% in the first

quarter of 2009 to 10.7% in the fourth.

In the world as a whole economic growth is forecast to recover to 3.2% in 2010,

compared to a trend growth rate of 3.5% to 4.0% in the period preceding the recession. The

key risks to the global economy in 2010 are viewed as further weakness in consumer demand

due to high unemployment, premature tightening of fiscal and monetary policy, a sharp rise

in oil and other commodity prices, and further failures of large financial institutions. At the

same time, the impact of stimulus measures will start waning. A combination of some of

these factors could cause renewed negative global growth, leading to a w-shaped growth

profile. The latter prospect is viewed as an uncomfortably high risk by many analysts. The

possibility that pervasively low short-term interest rates could lead to the development of

more asset bubbles, particularly in emerging economies, is also viewed as a risk.

Due to declining economic activity, infrastructure bottlenecks in terms of electricity

supplies and transport and harbor capacities, as well as the shortage of skilled and

experienced human resources, eased temporarily in 2009. Increasing economic activity in

2010 will put renewed pressure on these infrastructure components. With regard to export

logistics through the Richards Bay Coal Terminal, rail capacity remained a serious problem

even during the recession.

Egypt’s inflation rate fell in September to the lowest level in at least two years as the

economy struggles to rebound from the uprising that ousted President Hosni Mubarak last

year.

VI

Inflation in urban areas, the gauge monitored by the central bank, slowed to 6.2

percent from 6.5 percent in August, the official statistics agency said. It was the lowest

inflation rate since Aug. 2010 when Bloomberg started to track the current series. Consumer

prices rose 1.2 percent from the previous month.

“This confirms that the level of private spending is reduced, and is outweighing the

impact of higher oil prices.” Mona Mansour, co-head of research at Cairo-based investment

bank CI Capital Holding, said by phone.

The inflation rate was less than CI Capital’s 6.7 percent forecast.

Clothing and footwear prices rose 2.9 percent from the year-ago month. Housing and

utility prices rose 2.7 percent, that’s less than half August’s 6.7 percent. Food and beverage

prices, the biggest component of the consumer price index, increased 9.3 percent from a year

earlier after gaining 8.2 percent in August.

Oil prices have gained 10 percent this year. The U.S. benchmark oil, West Texas

Intermediate, slipped 36 cents to $92.03 a barrel on the New York Mercantile at 8:21 a.m. in

London.

Economic growth in Egypt fell to 1.8 percent in 2011, a 19- year low, and a median

estimate of 13 analysts compiled by Bloomberg shows gross domestic product is expected to

expand 2 percent this year. International reserves have fallen to $15 billion, or more than 50

percent below their levels in the month before the start of the January 2011 uprising.

Egypt is facing the Middle East’s widest budget deficit, and officials have said they

are seeking to secure a $4.8 billion International Monetary Fund loan this year.

Thus from the whole study we can summarise as Egypt’s Economy ranked 27th

in the

world economies having the currency as the Egyptian pound (EGP).

According to WTO statistics, the Egypt’s some Economic data for 2012 are as

follows:-

GDP: $525.6 billion (2011 est.).

GDP growth: 1.8% (2011).

GDP per capita: $6,200 (PPP) (2010 est.).

GDP by sector: Agriculture: 13.5%; Industry: 37.9%; Services: 48.6% (2010 est.).

Inflation (CPI): 12.8% (2010 est.).

Population: below poverty line 20% (2005 est.).

VII

Gini coefficient: 34.4 (2001).

Labour force: 26.1 million (2010 est.).

Labour force by occupation: Agriculture (32%), Industry (17%), Services (51%) (2001

est.).

Unemployment: 11.9% (2010 est.).

Main industries: Textiles, Food Processing, Tourism, Chemicals, Pharmaceuticals,

Hydrocarbons, Construction, Cement, Metals, Light Manufactures.

Ease of Doing Business Rank: 110th.

External Exports: $25.34 billion (61st; 2010 est.).

Export goods: Crude oil and Petroleum products, Cotton, Textiles, Metal Products,

Chemicals, Agricultural goods.

Main export partners: United States 7.95%, Italy 7.26%, Spain 6.78%, India 6.69%, Saudi

Arabia 5.53%, Syria 5.3%, France 4.39%, South Korea 4.27% (2009).

Imports: $46.52 billion (47th; 2010 est.).

Import goods: Machinery and Equipment, Foodstuffs, Chemicals, Wood products, Fuels.

Main import partners: United States 9.92%, China 9.63%, Germany 6.98%, Italy 6.88%,

Turkey 4.94% (2009).

FDI stock: $72.41 billion (31 December 2010 est.).

Gross external debt: $30.61 billion (31 December 2010 est.).

Public finances: Public debt: 83.4% of GDP (2011 est.).

Revenues: $46.82 billion (2010 est.).

Expenses: $64.19 billion (2010 est.).

Credit rating: B+ (Domestic), B+ (Foreign), B+ (T&C Assessment Standard & Poor's).

Foreign reserves: US$18.300 billion (December 2011).

Main data source: CIA World Fact Book

All values, unless otherwise stated, are in US dollars

VIII

Thus, The economy of Egypt was highly centralized under President Gamal Abdel

Nasser. In the 1990s, a series of International Monetary Fund arrangements, coupled with

massive external debt relief resulting from Egypt's participation in the Gulf War coalition,

helped Egypt improve its macroeconomic performance. Since 2000, the pace of structural

reforms, including fiscal, monetary policies, privatization and new business legislations,

helped Egypt move towards a more market-oriented economy and prompted increased

foreign investment. The reforms and policies have strengthened macroeconomic annual

growth results which averaged 5% annually but the government largely failed to equitably

share the wealth and the benefits of growth have failed to trickle down to improve economic

conditions for the broader population, especially with the growing problem of unemployment

and underemployment among youth under the age of 30 years. A youth protest demanding

more political freedoms, fighting corruption and delivering improved living standards forced

President Mubarak to step down on 11 February 2011. After the revolution Egypt’s foreign

exchange reserves fell from $36 billion in December 2010 to only $16.3 billion in January

2012, also in February 2012 Standard & Poor’s rating agency lowered the Egypt’s credit

rating from B+ to B in the long term.

The most emerging sector now - a - days in the Egyptian economic is ICT Sector as

the following lines so, the Egyptian information and communications technology sector has

been growing significantly since it was separated from the transportation sector. The market

for telecommunications market was officially deregulated since the beginning of 2006

according to the WTO agreement.

The government established ITIDA through Law 15 of the year 2004 as

governmental entity. This agency aims at paving the way for the diffusion of the e-business

services in Egypt capitalizing on different mandates of the authority as activating the

Egyptian e-signature law and supporting an export-oriented IT sector in Egypt.

The cellular phone market was a duopoly with prices artificially high but witnessed in

the past couple of years the traditional price war between the incumbents Mobinil and

Vodafone. A 500 minutes outbound local and long distance calling plan currently costs

approximately US$30 as compared to approximately US$ 90 in 2005. While the current price

is not so expensive, it is still above the international price as plans never allow "unlimited

night & weekend minutes."

A third GSM 3.5G license was awarded in April 2006 for US$3 billion to a

consortium led by the UAE company Eitesalat (66%), Egypt Post (20%), the National Bank

of Egypt(NBE) (10%), and the NBE's Commercial International Bank (4%), thus moving the

market from duopoly to oligopoly.

Thus, in the next sem. i.e., in 4th

Semester we can took the ICT sector as the main

subject of the our detailed GCSR study on the Egypt. However, there are some other sectors

also so we can throw light on them also.

IX

In light of the above, we can conclude that Egypt's trade performance has been

modest. Despite commitment to the GATT, Egypt is still leaping on the road to regional and

global integration. In spite of the increase in per capita export manufactures, Egypt continues

to specialize in traditional areas of comparative advantage: namely petroleum and cotton. Of

particular interest is the fact that Egypt's major export market, namely the United States and

the EEC countries, alone include about two thirds of Internet users in the world. A similar

argument also applies to tourism: Western and South Europe is the major source of tourists

coming to Egypt. The potential offered to Egypt by the Internet in this context, therefore,

cannot be overlooked.

Thus from the whole study we can derive the relations of Egypt & India as,

bilateral relations between Egypt and India. Modern Egypt–India relations go back to the

contacts between Saad Zaghloul and Mohandas Gandhi on the common goals of their

respective movements of independence. Major Egyptian exports to India include raw cotton,

raw and manufactured fertilizers, oil and oil products, organic and non-organic chemicals,

leather and iron products. Major imports into Egypt from India are cotton yarn, sesame,

coffee, herbs, tobacco and lentils. The Egyptian Ministry of Petroleum is also currently

negotiating the establishment of a natural gas-operated fertilizer plant with another Indian

company. In 2004 the Gas Authority of India Limited, bought 15% of Egypt Natural Gas

distribution and marketing company.

Economic relations: India is the fourth largest trade partner of Egypt after the US, Italy and

Saudi Arabia.

Oil: In 2003, Indian giant Reliance signed a contract with the Egyptian General Petroleum

Corporation (EGPC) to import 8 shipments of raw oil in 2003. Two years preceding the

contract, they had imported shipments from Egypt. In August 2004, the Indian company

GAIL procured 15% of the Egyptian Company Natural Gas which deals with marketing and

distributing natural gas in Egypt. Egyptian and Indian ministers of petroleum met in 2004 in

Egypt to discuss the prospect of investment and purchase of oil and gas from Egypt.

Investments: In 2011, Egyptian investment in India was at about USD 30 million. El Sewedy

group, an Egyptian company, manufactures Electric meters in India. Another Egyptian

company, Orascom Telecom, used to have 10% stake in the then Hutchinson-Essar which has

since been bought by Vodafone.

The current Indian investment in Egypt stands at $2.5 billion in about 45

projects. Alexandria Carbon Black, the Alexandria Fibre Co., Dabur India's production

facility for its cosmetics line, Niletex, Auto Tech Engineering, Marico's acquisition of two

hair care brands and the Sanmar Group's acquisition of a unit of Trust Chemicals of Egypt

represent some of the main Indian investments in Egypt. GAIL has equity and management

stake in two gas distribution ventures in Fayoum and Cairo as well as in Natgas. In April

2007, OVL and its partner IPR Red Sea Inc. announced a significant oil field discovery in the

North Ramadan Concession in the Gulf of Suez and reported a second discovery in

X

November 2008, though these deposits were later found to be commercially unviable. Satyam

Computers and Wipro have set up global delivery centers in Cairo. The Oberoi Group has

been managing a hotel and Nile cruises; Kirloskar Brothers assemble diesel engines and

irrigation pump sets in Egypt; Ranbaxy has an Egyptian subsidiary for manufacturing

pharmaceutical formulations; Ashok Leyland, Tata Motors, Maruti Suzuki and Mahindra &

Mahindra are marketing their vehicles in Egypt, and Bajaj Auto dominated the three-wheelers

market.

http://www.economywatch.com/world_economy/egypt/indo-egypt-trade-relation.html

According to the department of commerce and Industry in India, Indian exports to

Egypt have touched $ 423.68 million in 2004 which is up by 15.29% and the imports from

Egypt have reached $ 137.27 million in the same year which is up by 39.77%.

The main exportable items from India were Iron and steel, Jute yarn, Plastic and rubber,

Chemicals and engineering goods.

It is seen that making business in Egypt offers a large domestic market, a better

infrastructure base, skilled main power etc. The general authority of foreign investments in

Egypt, India is the 12th largest investor in Egypt and it is predicted that in the end of the year

2005,the total investment of India in Egypt will cross $ 450 million in 43 business ventures.

The Gas Authority of India Limited (GAIL) has planned to make an investment over $6

million in the gas distribution ventures in Fayoum and Cairo. The important sectors where the

cooperation has increased are Information technology, Pharmaceuticals, chemicals,

Fertilizers, Steel, Energy and agricultural equipments.

Indian companies have given a very good step in exploiting the business

environment in Egypt. The oberoi group operates hotels in Egypt. The companies like Tata

motors, Asian Paints, Ranbaxy, Ashok Leyland, NIIT, GAIL, HDFC, Dabur India Ltd, Unit

trust of India, Kirloskar Brothers, Thappar Group and others are considered as the major

investors in the land of Egypt.

From the Whole Study we can Conclude that:-

As India is our home instead of Egypt we would...

Have 87.52% more chance of dying in infancy……The number of deaths of infants under

one year old in a given year per 1,000 live births in India is 49.13 while in Egypt it is

26.20.

Consume 74.3% less oil…..India consumes 0.0956 gallons of oil per day per capita while

Egypt consumes 0.3720.

Use 62.57% less electricity…..The per capita consumption of electricity in India is

484kWh while in Egypt it is 1,294kWh.

Make 48.33% less money…..The GDP per capita in India is $3,100 while in Egypt it is

$6,000.

XI

Spend 73.13% less money on health care….Per capita public and private health

expenditures combined in India are $86 USD while Egypt spends $320 USD.

Die 5.94 years sooner….The life expectancy at birth in India is 66.46 while in Egypt it is

72.40.

Have 10.31% more chance of being unemployed….India has an unemployment rate of

10.70% while Egypt has 9.70%.

Experience 6.98% more of a class divide…..The GINI index measures the degree of

inequality in the distribution of family income. In India are 36.80 while in Egypt it is

34.40.

Source: CIA World Fact book

We have picked up some Strength & Weaknesses through this study:-

From the whole report we have picked up some of the strengths & weaknesses for

Egypt to conduct and establish a bounded business relations and to strengthen it for our

country so they are as follows:-

STRENGTHS

• The business climate has benefited from an active reform program and a regional

economic boom.

• Egypt boasts diversified sources of foreign exchange (the Suez Canal, tourism, private

transfers, and oil and gas exports).

• Foreign exchange reserves are high.

• The country enjoys the political and financial support of Western countries.

WEAKNESSES

• The interest on public debt and the cost of subsidies weighs on public finances

limiting the capacity for infrastructure development.

• The banking system is not yet capable of meeting the economy's needs.

• The tourism sector, whose revenues are of fundamental importance to the current

account balance and economic growth, remains vulnerable to the terrorist menace.

At the last, we can conclude that India has a very good opportunity to establish &

strengthen their economical – business relations with Egypt as there are many supporting

factor.

At last we feel great pleasure to present our study & to conclude it here.

XII

Table of Content

Sr. No. Content Page No. 1. Executive Summary IV

2. Economical Environment 1

3. Technological Environment 24

4. Comparison of Egypt - India 34

5. References XIII

List of Graphs & Tables

Sr. No. Content Page No. 1. GDP Graph 3

2. GDP Growth Rate Graph & Table 4

3. Consumer Price Index Graph & Table 6

4. Inflation Rate Graph & Table 8

5. Interest Rate Graph & Table 9

6. Balance of Trade Graph & Table 10

7. Summarised Economic Factors Table 13

8. Comparison with other Countries Table 14

9. List of Main Companies Table 21

10. Internet Hosting Graph 28

11. R & D Expenditure Graph 28

12. Egypt Vs. India Table 32

1

2

The Role of Economical Environment in Egypt:-

Introduction:-

Occupying the northeast corner of the Afr ican cont inent, Egypt is

bisected by the highly fert ile Nile valley, where most economic act ivity takes

place. Egypt 's economy was highly centralized during the rule of former

President Gamal Abdel NASSER but opened up considerably under former

Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Cairo from

2004 to 2008 aggressively pursued economic reforms to attract foreign

investment and facilitate GDP growth. Despite the relat ively high levels of

economic growth in recent years, living condit ions for the average Egypt ian

remained poor and contributed to public unhappiness. After unrest exploded in

January 2011, the Egypt ian Government drast ically increased social spending

to address public dissat isfact ion, but polit ical uncertainty at the same t ime

caused economic growth to slow significant ly, reducing the government 's

revenues. Tourism, manufacturing, and construct ion are among the hardest hit

sectors of the Egypt ian economy, and economic growth is likely to remain slow

at least through 2012. The government is ut ilizing foreign exchange reserves to

support the Egypt ian pound and Egypt may seek a loan from the Internat ional

Monetary Fund.

Egypt's economic stabilization programme, initiated in 1990/91, has produced

significant results in most macroeconomic areas. Strict fiscal and monetary policy resulted in

a halving of the rate of inflation between 1991/92 and 1993/94; economic growth, after

declining initially, picked up in 1993/94 and has been maintained, despite external shocks, at

a real rate of around 5%; and unemployment has fallen since 1993/94. Growth has been

mainly driven by increased domestic demand, with export growth playing a smaller role. The

Government's goal is to meet the challenge of a rapidly growing labour force with GDP

growth of some 8% a year.

Higher export growth, at some 10% a year, and increased private investment, is

expected to support future GDP growth. There is considerable evidence that private

investment has risen; much of this is taking place in the non-tradeable sectors, where reform

has been concentrated. With declining foreign exchange revenues from traditional but volatile

sources, particularly tourism, workers‘ remittances, the Suez Canal, and petroleum, there is a

perceived need to expand Egypt's exports; growth since 1991/92 has been irregular and

closely dependent on the performance of petroleum exports. There is also a need for

significant deepening of the reform programme, particularly to address the lack of external

competitiveness especially in traditional sectors such as textiles and clothing, in order to

move the economy to a higher growth route.

3

The national currency is the Egyptian pound (LE). Egypt currently has a managed

floating system, with no pre-announced path for the exchange rate. The Central Bank of

Egypt (CBE) is responsible for formulating monetary and exchange rate policy, and for

control the banking system. Valuable from 2nd

Jan.2005, Egypt has accepted Article VIII,

Sections - 2, 3 & 4, of the IMF Agreement.

Source: Information provided by the Central Bank of Egypt.

4

GDP:

The Gross Domestic Product (GDP) or gross domestic income (GDI) is one of the

measures of national income and output for a known country's economy. It is equal to the

total expenditures for all final goods and services produced within the country in a fixed

period of time (usually a 365-day year).

Egypt GDP:-

The GDP in Egypt was worth 229.53 billion US dollars in 2011, according to a report

available by the World Bank. The GDP value of Egypt is roughly equal to 0.37% of the

world economy. Historically, from 1960 until 2011, Egypt GDP averaged 50.81 Billion USD

reaching an all time high of 229.53 Billion USD in December of 2011 and a record low of

4.00 Billion USD in December of 1962.

Chart of Egypt GDP:-

Indian GDP:-

The GDP in India was worth 1847.98 billion US dollars in 2011, according to a

report published by the World Bank. The GDP value of India is roughly equal to 2.98% of

the world economy. Historically, from 1960 until 2011, India GDP averaged 368.84 Billion

USD reaching an all time high of 1847.98 Billion USD in December of 2011 and a record

low of 36.61 Billion USD in December of 1960.

Interpretation:-

From the above information we can interpret that the GDP of Egypt is around the 12.47%

of the Indian GDP in the latest information of upto 2011.

The Indian GDP is the highest in history in that year so it implies good economic growth

in India while the highest GDP in Egypt was recorded earlier so it implies the fluctuating

growth of Egypt than India.

So from the GDP point of view the Egypt is far behind from Indian economy.

5

GDP Growth Rate:-

The GDP growth rate measures the increase in value of the goods and services

produced by an economy. Economic growth is usually calculated in real terms or inflation-

adjusted terms, in order to net out the effect of changes on the price of the goods and services

produced. The real GDP per capita of an economy is often used as an indicator of the average

standard of living of individuals in that country, and economic growth is therefore often seen

as indicating an increase in the average standard of living. However, there are some problems

in using growth in GDP per capita to measure the general well-being of a country´s

population.

Egypt GDP Growth Rate:-

The GDP in Egypt expanded 3.3% in the second quarter of 2012 over the same

quarter, previous year. Historically, from 1992 until 2012, Egypt GDP Growth Rate averaged

4.10% reaching an all time high of 7.30% in March of 2008 and a record low of -4.20% in

March of 2011. Egypt has one of the most developed and diversified economies in the Middle

East. Agriculture (cotton, corn, sugarcane, fruit and vegetables, fodder, and rice), industry

(textiles and clothing, chemicals, steel, consumer electronics and home appliances) and

services (tourism) represent almost equal rates in national production. However, despite high

levels of economic growth over the past few years, living conditions for the average Egyptian

remain poor.

Egyptian GDP Growth Data Table:-

Year Mar Jun Sep Dec

2012 5.20 3.30

2011 -4.20 0.40 0.20 0.40

2010 5.80 5.10 5.50 3.80

2009 4.30 4.50 4.60 5.00

2008 7.30 7.10 5.70 4.10

Indian GDP Growth Rate:-

The GDP in India expanded 0.8% in the second quarter of 2012 over the previous

quarter. Historically, from 1996 until 2012, India GDP Growth Rate averaged 1.65%

reaching an all time high of 6.10% in March of 2010 and a record low of -1.50% in March of

2004. India's diverse economy encompasses traditional village farming, modern agriculture,

handicrafts, a wide range of modern industries, and a huge number of services. Services are

the major source of economic growth, accounting for more than half of India's output with

less than 1/3rd

of its labor force. The economy has posted an average growth rate of more than

7% in the decade since 1997, reducing poverty by about 10% points.

6

GDP Per CAPITA:-

The GDP dollar estimates given here are adjusted for inflation. The GDP per capita

is the value of all final goods and services produced within a nation in a given year divided

by the average (or mid-year) population for the same year.

Egyptian GDP Per Capita:-

The GDP per capita in Egypt was last reported at 1976.62 US dollars in 2011,

according to a report published by the World Bank. The GDP per Capita in Egypt is

equivalent to 16% of the world's average. Historically, from 1960 until 2011, Egypt GDP per

capita averaged 1039.96 USD reaching an all time high of 1976.62 USD in December of

2011 and a record low of 431.99 USD in December of 1960.

Year Value

2011 1976.62

2010 1975.55

2009 1911.96

2008 1858.86

Indian GDP Per Capita:-

The GDP per capita in India was last reported at 837.75 US dollars in 2011,

according to a report published by the World Bank. The GDP per Capita in India is

equivalent to 7% of the world's average. Historically, from 1960 until 2011, India GDP per

capita averaged 344.72 USD reaching an all time high of 837.75 USD in December of 2011

and a record low of 180.86 USD in December of 1960.

Thus, from this we can also interpret that the Indian economy is far developed from that

of Egyptian so by this we can generate best opportunity of business with Egypt at lower cost.

7

Consumer Price Index:-

The Consumer Price Index or CPI measures changes in the prices paid by

consumers for a basket of goods and services.

Egyptian Consumer price Index:-

Consumer Price Index (CPI) in Egypt increased to 124.70 Index Points in August

of 2012 from 123.30 Index Points in July of 2012, according to a report released by the

Capmas, Egypt. Historically, from 1957 until 2012, Egypt CPI averaged 25.65 Index Points

reaching an all time high of 124.70 Index Points in August of 2012 and a record low of 1.20

Index Points in June of 1962.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2012 120.3 121.1 122.6 123.8 123.5 122.8 123.3 124.7

2011 110.8 110.9 113.4 113.8 114 114.5 115.9 117.2 118.8 119.2 120.4 120.1

2010 100 100.2 100.8 101.5 101.9 102.4 105 108 109.8 111.3 110.4 109.7

2009 88.8 89.7 90.8 92.3 93.5 93.8 95.9 97.4 99 100.3 100.2 99.2

2008 77.6 79 81 82.6 84.8 85.3 87.2 89.3 89.6 89.5 89.5 88.3

Indian Consumer Price Index:-

Consumer Price Index (CPI) in India increased to 214 Index Points in August of

2012 from 212 Index Points in July of 2012, according to a report released by the Labour

Bureau, Government of India. Historically, from 1960 until 2012, India CPI averaged 52.89

Index Points reaching an all time high of 214 Index Points in August of 2012 and a record

low of 4.32 Index Points in April of 1960.

Interpretation:-

From the above information we can conclude that the CPI is almost nearer to the double

of the CPI of Egypt in India.

In month of August it increases than the month of July so, we can expect more growth in

that in the coming months in Egypt & it indicate good sign of economy & also for India

to conduct a good business relations with Egypt in future.

8

Inflation Rate:-

Inflation refers to a general rise in prices measured against a standard level of

purchasing power. Earlier the term was used to refer to an increase in the money supply,

which is now referred to as expansionary monetary policy or monetary inflation. Inflation is

measured by comparing two sets of goods at two points in time, and computing the increase

in cost not reflected by an increase in quality. The most well known measures of Inflation

rate are the CPI, and the GDP deflator, which measures inflation in the whole of the domestic

economy. The current view in normal economics is that inflation is caused by the interaction

of the supply of money with output and interest rates.

Egyptian Inflation Rate:-

The inflation rate in Egypt was recorded at 6.30% in September of 2012.

Historically, from 2001 until 2012, Egypt Inflation Rate averaged 8.98% reaching an all time

high of 23.60% in August of 2008 and a record low of 2.20% in May of 2001. The following

graph represents the Egypt‘s inflation rate upto Sept. 2012.

The following table shows the data for inflation rate of Egypt for various months in 2012 &

previous years:-

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2012 9.2 9.9 9.5 9.3 8.6 7.4 6.3 6.3 6.3

2011 11 11 12.2 12.1 11.8 11.8 10.36 8.49 8.21 7.5 10 10.4

2010 13.6 12.6 12 10.9 10 10.1 10.4 10.9 11 11 10.2 10.3

2009 14.3 13.5 12.1 11.7 10.2 9.9 9.9 9 10.8 13.3 13.3 13.5

2008 10.5 12.1 14.4 16.4 19.7 20.2 22 23.6 21.5 20.2 20.3 18.3

Indian Inflation Rate:-

The inflation rate in India was recorded at 7.81% in September of 2012.

Historically, from 1969 until 2012, India Inflation Rate averaged 7.75% reaching an all time

high of 34.68% in September of 1974 and a record low of -11.31% in May of 1976.

Thus, there is no far difference in the inflation rate as compared to India it is lesser

in Egypt so we expect the lesser cost as things are cheaper than India so, it is good to import

some goods from Egypt at lesser cost than India.

9

Interest Rate:-

The interest rate term structure is the relation between the interest rate and the time

to maturity of the debt for a given borrower in a given currency.

Egyptian Interest Rate:-

The benchmark interest rate in Egypt was last reported at 9.25%. Historically, from

1991 until 2012, Egypt Interest Rate averaged 11.76% reaching an all time high of 21.40% in

October of 1991 and a record low of 8.25% in September of 2009. In Egypt, decisions on

interest rates are made by the Central Bank of Egypt (CBE). The Central Bank of Egypt

official interest rate is the overnight deposit rate. The CBE is committed to achieving, over

the medium term, low rates of inflation which it believes are essential for maintaining

confidence and for sustaining high rates of investment and economic growth. The graph for

the historical data of Egypt Interest Rate is as follows.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2012 9.25 9.25 9.25 9.25 9.25 9.25 9.25 9.25 9.25 9.25

2011 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 9.25 9.25

2010 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25

2009 11.5 10.5 10 10 9.5 9 9 8.5 8.25 8.25 8.25 8.25

2008 9 9 9 9 9 10 10 11 11.5 11.5 11.5 11.5

Indian Interest Rate:-

The benchmark interest rate in India was last reported at 8.00%. Historically, from

2000 until 2012, India Interest Rate averaged 6.52% reaching an all time high of 14.50% in

August of 2000 and a record low of 4.25% in April of 2009. In India, interest rate decisions

are taken by the Reserve Bank of India's Central Board of Directors. The official interest rate

is the benchmark repurchase rate. This page includes a chart with historical data for India

Interest Rate.

The Effects of Interest Rate:-

The current U.S. dollar interest rates paid on U.S. Treasury securities for various

maturities are closely watched by many traders, and are commonly plotted on a graph such as

the one on the right which is informally called "the yield curve." Yield curves are usually

upward sloping asymptotically; the longer the maturity, the higher the yield, with diminishing

marginal growth. There are two common explanations for this phenomenon. First, it may be

10

that the market is anticipating a rise in the risk-free rate. If investors hold off investing now,

they may receive a better rate in the future. Therefore, under the arbitrage pricing theory,

investors who are willing to lock their money in now need to be compensated for the

anticipated rise in rates — thus the higher interest rate on long-term investments. However,

interest rates can fall just as they can rise. Another explanation is that longer maturities entail

greater risks for the investor (i.e. the lender). Risk premium should be paid, since with longer

maturities, more catastrophic events might occur that impact the investment. This explanation

depends on the notion that the economy faces more uncertainties in the distant future than in

the near term, and the risk of future adverse events is higher than the chance of future positive

events. This effect is referred to as the liquidity spread. If the market expects more volatility

in the future, even if interest rates are anticipated to decline, the increase in the risk premium

can influence the spread and cause an increasing yield.

Balance of Trade:-

The balance of trade is the difference between the monetary value of exports and

imports in an economy over a certain period of time. A positive balance of trade is known as

a trade surplus and consists of exporting more than is imported; a negative balance of trade is

known as a trade deficit or, informally, a trade gap. The balance of trade forms part of the

current account, which also includes other transactions such as income from the international

investment position as well as international aid. If the current account is in surplus, the

country's net international asset position increases correspondingly. Equally, a deficit

decreases the net international asset position. The Balance of Trade is identical to the

difference between a country's output and its domestic demand - the difference between what

goods a country produces and how many goods it buys from abroad; this does not include

money respect on foreign stocks, nor does it factor the concept of importing goods to produce

for the domestic market.

Egyptian Balance of Trade:-

Egypt reported a trade deficit equivalent to 8.1 Billion USD in the second quarter

of 2012. Historically, from 2001 until 2012, Egypt BoT averaged a deficit equivalent to

4230.50 Million USD reaching the best deficit at 1274.30 Million USD in March of 2003 and

the worst deficit at 8171.10 Million USD in June of 2012.

Egypt is net exporter of raw oil. Other major exports include: agricultural products:-citrus

fruits, rice and dried onion, chemicals, metals and its products; cotton, textiles and

clothes.

Egypt main exports partners are: United States, Italy, China and United Kingdom.

Egypt imports mostly: fuels, foodstuff, cereals, chemicals, machinery and electric

equipment.

Main imports partners are: United States, Switzerland, Germany and United Kingdom.

Indian Balance of Trade:-

India reported a trade deficit equivalent to 18080 Million USD in September of

2012. Historically, from 1994 until 2012, India BoT averaged a deficit equivalent to 4001.78

11

Million USD reaching the best surplus at 491.28 Million USD in November of 2001 and the

worst deficit at 19644.00 Million USD in October of 2011.

India is leading exporter of gems and jewelry, textiles, engineering goods, chemicals,

leather manufactures and services.

India is poor in oil resources and is currently heavily dependent on coal and foreign oil

imports for its energy needs.

Other imported products are: machinery, gems, fertilizers and chemicals.

Main trading partners are European Union, The United States, China and UAE.

The graphs representing BoT historically for both countries are as follows:-

The following is the table showing quarterly BoT historical data for Egypt:-

Conclusion:-

From this we can conclude that as India is poor in oil so they have to build up relations of

trade with Egypt for the same as they are main exporter of the same. It is good opportunity

for India to develop good business relations with Egypt.

Year Mar Jun Sep Dec

2012 -7929.0 -8171.1

2011 -5092.5 -5369.3 -7823.0 -7775.0

2010 -6607.8 -6583.0 -7134.0 -6691.9

2009 -4865.8 -5680.0 -5675.2

2008 -5520.9 -6625.6 -7000.0 -7627.5

12

Exports:-

Exports measure the amount of goods or services that domestic producers provide to

foreign consumers. It is a good that is sent to another country for sale. More recently, with the

start of small trades over the internet such as through Amazon and e-Bay, exports have

largely bypassed the involvement of Customs in many countries due to the low individual

values of these trades. This is the crucial factor for our studies by this we can able know the

real trading situation of the Egypt.

Egyptian Exports:-

Egypt exports were worth 6.9 Billion USD in the second quarter of 2012.

Historically, from 2001 until 2012, Egypt Exports averaged 4761.67 Million USD reaching

an all time high of 8518.00 Million USD in June of 2008 and a record low of 1691.30 Million

USD in March of 2002.

Egypt is net exporter of raw oil. Other major exports include: agricultural products citrus

fruits, rice and dried onion, chemicals, metals and its products; cotton, textiles and

clothes.

Egypt main exports partners are: United States, Italy, China and United Kingdom.

Year Mar Jun Sep Dec

2012 6480.0 6907.1

2011 6243.3 8081.4 6765.0 6824.0

2010 5450.4 6906.0 6102.0 6565.8

2009 5657.8 5914.8 5390.3 6126.4

2008 7734.7 8518.0 8162.9 5433.4

Conclusion:-

From the above we can say that India may import the raw oil from Egypt as they are

major exporter of that. India has to apply the liberal policy for it to establish good industrial

& economical business relations with Egypt.

13

Imports:-

An import is any good or service brought into one country from another country in

a legal way, naturally for use in trade. Import goods or services are provided to home

consumers by overseas producers. An import in the receiving country is an export to the

sending country. When the "imports" are the set of goods and services imported, "Imports"

also means the economic value of all goods and services that are imported. This is same

important for our study as that of exports as to know which products India can sold to Egypt

at what level & price.

Egyptian Imports:-

Egypt imports were worth 15 Billion USD in the second quarter of 2012.

Historically, from 2001 until 2012, Egypt Imports averaged 9037.14 Million USD reaching

an all time high of 15162.90 Million USD in September of 2008 and a record low of 3206.80

Million USD in March of 2002.

Egypt imports mostly: fuels, foodstuff, cereals, chemicals, machinery and electric

equipment.

Main imports partners are: United States, Switzerland, Germany and United Kingdom.

Year Mar Jun Sep Dec

2012 14409.0 15078.0

2011 11335.8 13450.7 14588.0 14599.0

2010 12058.2 13489.0 13236.0 13257.7

2009 10523.6 11594.8 11644.3 11801.6

2008 13255.6 15143.6 15162.9 13060.9

Conclusion:-

From the above we can conclude that India has good opportunity to export

foodstuffs, chemicals, & Machinery to Egypt as they are major importer of that and India is

keen in producing such products. India can boost up the good relations with Egypt by selling

the various foodstuffs.

14

Government Budget:-

A government budget is a legal document that is often passed by the legislature,

and approved by the chief executive-or president. The two basic elements of any budget are

the revenues and expenses. Budgets have an economic, political and technical basis. Unlike a

pure economic budget, they are not entirely designed to allocate scarce resources for the best

economic use. The technical element is the forecast of the likely levels of revenues and

expenses.

Egypt Government Budget:-

Egypt reported a Government Budget deficit equal to 7.90 percent of the country's

Gross Domestic Product in 2011. Historically, from 2002 until 2011, Egypt Government

Budget averaged -8.49 Percent of GDP reaching an all time high of -6.60 Percent of GDP in

June of 2009 and a record low of -10.50 Percent of GDP in June of 2003.

Conclusion:-

This factor is taken in our study to know the Egypt Govt. budget predicting as their

expenditures & incomes, revenues and others so we can able to forecast and learn the

opportunities for creating a well manner trade environment between India & Egypt.

The Summarised Table of Figures of Various Economic Factors of the Egypt:-

ACTUAL PREVIOUS HIGHEST LOWEST UNIT

Markets

Currency 6.11 6.07 6.35 4.59

Stock Market 5893.31 5821.82 7210.41 3586.55 Index points

Exchange Rate 6.11 6.07 6.35 4.59

GDP

GDP per capita 1976.62 1975.55 1976.62 431.99 USD

GDP per capita PPP 6324.02 6152.57 6324.02 1147.64 USD

GDP 229.53 218.91 229.53 4.00 USD Billion

GDP Growth Rate 3.30 5.20 7.30 -4.20 Percent

GDP Annual Growth Rate 3.30 5.20 7.30 -4.20 Percent

Labour

Population 82.54 81.12 82.54 27.90 Million

Unemployed Persons 3395.00 3383.00 3395.00 2022.00 Thousand

Persons

Year Jun

2011 -7.90

2010 -8.10

2009 -6.60

2008 -6.80

15

Unemployment Rate 12.60 12.60 12.60 8.10 Percent

Prices

Inflation Rate 6.30 6.30 23.60 2.20 Percent

Consumer Price Index 124.70 123.30 124.70 1.20 Index Points

Money

Money Supply M0 256701.00 256230.00 263668.00 68043.00 EGP Million

Money Supply M2 1101873.0 1094408.00 1101873.00 161125.00 EGP Million

Foreign Exchange Reserves 15149.00 14444.00 36038.00 14253.00 USD Million

Interest Rate 9.25 9.25 21.40 8.25 Percent

Trade

Imports 15078.00 14409.00 15162.90 3206.80 USD Million

Exports 6907.10 6480.00 8518.00 1691.30 USD Million

External Debt 34384.50 33422.10 34992.50 26132.50 USD Million

Current Account to GDP -1.20 -2.00 8.70 -8.50 Percent

Balance of Trade -8171.10 -7929.00 -1274.30 -8171.10 USD Million

Current Account -1535.70 -2339.00 1927.80 -2339.00 USD Million

Government

Government Debt To GDP 76.40 73.20 103.30 70.20 Percent

Government External Debt 33422.10 33692.70 34992.50 26132.50 USD Million

Government Spending 155000.00 134700.00 155000.00 2580.00 EGP Million

Government Budget -7.90 -8.10 -6.60 -10.50 Percent of GDP

Business

Industrial Production -2.90 -2.90 24.70 -16.30 Percent

Changes in Inventories 22000.00 5400.00 22000.00 -1200.00 EGP Million

Consumer

Consumer Spending 1035900.0 899800.00 1035900.00 11410.00 EGP Million

The Table Showing the Comparison with India & Such Other Countries:-

Country Continent GDP GDP

Growth

Exchange

Rate

Interest

Rate

Inflation

Rate

Current

Account

Unemployment

Rate

Government

Budget

Egypt Africa 230 3.30 6.1091 9.25 6.30 -1536 12.60 -7.90

India Asia 1848 0.80 53.9650 8.00 7.81 -16 3.80 -4.60

South

Africa

Africa 408 3.20 8.6445 5.00 5.50 -152600 25.50 -4.80

United

Arab

Emirates

Asia 360 4.20 3.6732 1.00 1.05 113 4.60 2.90

United

Kingdom

Europe 2432 1.00 1.6024 0.50 2.20 -20767 7.90 -7.80

United

States

America 15094 2.00 119.8900 0.25 2.00 -117 7.90 -8.70

16

Economy of Egypt a Full Study with Fiscal Policy:-

The economy of Egypt was highly centralized under President Gamal Abdel

Nasser. In the 1990s, a series of International Monetary Fund arrangements, coupled with

massive external debt relief resulting from Egypt's participation in the Gulf War coalition,

helped Egypt improve its macroeconomic performance. Since 2000, the pace of structural

reforms, including fiscal, monetary policies, privatization and new business legislations,

helped Egypt move towards a more market-oriented economy and prompted increased

foreign investment. The reforms and policies have strengthened macroeconomic annual

growth results which averaged 5% annually but the government largely failed to equitably

share the wealth and the benefits of growth have failed to trickle down to improve economic

conditions for the broader population, especially with the growing problem of unemployment

and underemployment among youth under the age of 30 years. A youth protest demanding

more political freedoms, fighting corruption and delivering improved living standards forced

President Mubarak to step down on 11 February 2011. After the revolution Egypt‘s foreign

exchange reserves fell from$36 billion in December 2010 to only $16.3 billion in January

2012, also in February 2012 Standard & Poor‘s rating agency lowered the Egypt‘s credit

rating from B+ to B in the long term.

Macroeconomic Trends

Egypt has a stable economy enjoying continuous growth, averaging 4%–5% in the

past quarter-century. The economy embarked on various stages of development during which

the public and private sectors played roles varying in relative importance as follows:

First Republic: 1952-2012,

Import substitution and nationalization, 1952–1966,

Openness Euphoria, 1974–1982 during which policies were introduced to encourage

Arab and foreign investment through a series of incentives and liberalizing trade and

payment;

External Debt Crisis, 1982–1990,

Economic Reform, 1991–2007, reform policies were introduced to meet the terms of

international institutions, lenders and donors, including wider incentives to the role of

the private sector in all economic activities.

The Post Global Financial Crisis, 2008-2011, soaring food prices, especially for

grains, led to calls for the government to provide more immediate assistance to the

population of more than 40% in the "poverty tunnel" and to strike a "new deal" on

agriculture policy and reform.

The Second Republic: 2012 -, Egypt need to strengthen the economy to exogenous

shocks, improve productivity, competition, get out of the "informality trap," invest in

human capital via social protection from a human right-based approach to correct for

market failures and build good trust in governance.

17

Reform Era:-

Under complete economic reforms initiated in 1991, Egypt has relaxed many price

controls, reduced subsidies, reduced inflation, cut taxes, and partially liberalized trade

and investment. Manufacturing had become less subject by the public sector, especially in

heavy industries. A process of public sector reform and privatization has begun to enhance

opportunities for the private sector. Agriculture, mainly in private hands, has been largely

deregulated, with the exception of cotton and sugar production. Construction, non-financial

services, and domestic wholesale and retail trades are largely private. This has promoted a

steady increase of GDP and the annual growth rate.

According to the World Bank Country Classification, Egypt has been promoted

from the low income category to lower middle income category. Mean wages were $2.45 per

man-hour in 2009.

The reform programme is a work in progress. Noteworthy that the reform record

has substantially improved since Nazif government came to power.

The rise of the World Global Financial Crisis led to a set of fiscal-monetary policy

measures to face its repercussions on the national economy, including reducing the overnight

lending and deposit rates by 1% on 12 February 2009. The rates currently stand at 10.5% and

12.5%, respectively.

Reform of energy and food subsidies, privatization of the state-owned Bank of

Cairo, and inflation targeting are perhaps the most controversial economic issues in

2007/2008 and 2008/2009.

External trade and remittances

Egypt's main exports consist of natural gas, and non-petroleum products such as

ready-made clothes, cotton textiles, medical and petrochemical products, citrus fruits, rice

and dried onion, and more recently cement, steel, and ceramics. Egypt's main imports consist

of pharmaceuticals and non-petroleum products such as wheat, maize, cars and car spare

parts. Italy and the USA are the top export markets for Egyptian goods and services. In

the Arab world, Egypt has the largest non-oil GDP as of 2005.

According to the International Organization for Migration, an estimated 2.7

million Egyptians abroad contribute actively to the development of their country

through remittance inflows, circulation of human and social capital, as well as investment.

Monetary policy

There have been several favorable conditions that allowed the Central Bank of

Egypt to accumulate net international reserves, which increased from US$ 20 billion in

FY2005, to US$23 billion in FY2006, and to US$30 billion FY2007 contributing to growth

in together reserve money and in broad money (M2).

18

Credit expanded to the private sector in Egypt declined significantly reaching about

EGP 5 billion in FY2005. This credit crisis is due to the non-performing loans extended by

the banks to business tycoons and top govt. officials.

Lending criteria have been tensed tracking the transitory of Money Laundry Law

80 in 2002 and Banking Law 88 in 2003. Interest rates are no longer the dominant factor in

banks' lending decisions. In fact, both the inefficiency and absence of the role of the Central

Bank of Egypt in qualitative and quantitative control as well as implementing banking

procedures and standards was almost entirely responsible for the non-performing loans crisis.

The era of inflation targeting—i.e. maintaining inflation within a band—has perhaps

begun in Egypt more recently. Country experiences show that inflation targeting is a best-

practice strategy for monetary policy.

Exchange rate policy

The exchange rate has been linked to the US dollar since the 1950s. Several rules

were adopted including initially the conventional bolt in the sixties, regular crawling bolt in

the seventies and the eighties and crawling bands in the nineties. Over that time period, there

were several exchange rate markets including black market, parallel market and the official

market. With the turn of the new millennium, Egypt introduced a managed float regime and

successfully unified the Pound exchange rate vis-à-vis foreign currencies.

In the fiscal year 2004 and over most of the fiscal year 2005, the pound depreciated

against the US Dollar. Since the second half of the fiscal year 2006 until the end of the fiscal

year 2007, the pound gradually appreciated to EGP 5.69 per USD. While it was likely to

continue appreciating in the short-term, given the skyrocketing oil prices and the weakening

US economy, the advent of the global Economic crisis of 2008, and resulting behavior of

foreign investors exiting from the stock market in Egypt increased the dollar exchange rate

against the Egyptian pound, which rose by more than 4% since Lehman Brothers

declared Bankruptcy.

Main Economic Sectors:-

Agricultural sector

During the 1970s, despite significant investment in land reclamation, agriculture lost

its position as the leading economic sector. Agricultural

exports, which were 87% of all merchandise export by value

in 1960, fell to 35% in 1974 and to 11% by 2001. In 2000,

agriculture accounted for 17% of Gross Domestic Production

and 34% of total employment. Cotton has been the staple

crop, but it is no longer vital as an export. Production in 1999

was 243,000 tons. Egypt is also a substantial producer

19

of wheat, corn, sugarcane, fruit and vegetables, fodder, and rice; substantial quantities of

wheat are also imported, especially from the United States of America and Russia, despite

increases in yield since 1970, and significant quantities of rice are exported. Citrus, dates, and

grapes are the main fruits by acreage. Agricultural output in tons in 1999 included corn,

9,350,000; wheat, 6,347,000; rice, 5,816,000; potatoes, 1,900,000; and oranges, 1,525,000.

The government exercises a strong degree of control over agriculture, not only to ensure the

best use of irrigation water but also to confine the planting of cotton in favor of food grains.

Egyptian Strawberry exports stood for 52 million dollars in 2009. Egypt's fertile area totals

about 3.3 million hectares, about one-quarter of which is land reclaimed from the desert.

However, the reclaimed lands only add 7 percent to the total value of agricultural production.

Even though only 3 percent of the land is arable, it is extremely productive and can be

cropped two or even three times annually. Most land is cropped at least twice a year, but

agricultural productivity is limited by salinity, which afflicts an estimation of 35% of

cultivated land, and drainage issues.

Industrial sector

Automobiles manufacturing

El Nasr Automotive Manufacturing Company is Egypt's state owned automobile

company, founded in 1960 in Helwan, Egypt. Established in 1977, the company

manufactures various vehicles under license from Daimler AG, Kia, and Peugeot. Their

current lineup consists of the Jeep Cherokee; the open-top, Wrangler-based Jeep AAV TJL;

the Kia Spectra; the Peugeot 405; and the Peugeot 406.

Other manufacturers such as AAV - Arab American Vehicles, the Ghabbour Group,

WAMCO - the Watania Automotive Manufacturing Company, and MCV Egypt –

Manufacturing Commercial Vehicles, produce automobiles in Egypt. MCV Egypt was

established in 1994 to represent Mercedes-Benz in the commercial vehicle sector in Egypt,

producing a range of buses and trucks for domestic sale and for export throughout the Arab

World, Africa, and Eastern Europe. Also there is Russian AutoVAZ manufacturing 'Lada'.

Chemicals

Abu Qir Fertilizers Company (AFC) is one of the largest producers

of nitrogen fertilizers in Egypt and the Middle East. It produces about 50% of the Egyptian

Nitrogen Fertilizers.

Consumer electronics and home appliances

Olympic Group is the largest Egyptian group of companies operating mainly in the

field of domestic appliances. The main products it manufactures are washing machines,

refrigerators, electric water heaters and gas cookers. It also operates in the fields of IT and

real estate.

Bahgat Group is a leading company in the fields of electronics and electrical home

appliances, industries, constructions, internet service providing, and T.V. stations. The group

is composed of the following companies: Egy Aircon, International Electronics Products,

20

Electrical Home appliances, General Electronics and Trading, Goldi Trading, Goldi

Servicing, Egy Medical, Egyptian Plastic Industry, Egy House, Egy Speakers, Egy Marble,

Dreamland and Dream TV.

Steel industries

EZDK is the largest steel company in Egypt and the Middle East. It is ranked at the

65th place in the world biggest steel producers as per the World Steel Institute with total

production of 4.5 Million Tons per year representing about three quarters of Egypt total

annual production (6 Million Tons).

Textiles and clothing

Textiles and clothing is one of the largest manufacturing and exporting processes in

the country and a huge employment absorber. The Egyptian apparel industry is attractive for

two reasons. Firstly, its proximity to European markets, whose rapidly changing fashions

require quick replenishment. Egypt‘s geographical proximity to style-conscious Europe is a

logistical advantage. Secondly, the production of garments is a low-capital and high-labor

intensive industry, and the local population of 66 million provides a ready workforce as well

as a natural local consumer market that acts as a springboard for exports.

Construction and contracting sector

Orascom Construction Industries headquarters is at the

south tower. The Fairmont Hotel lies in-between the two towers

Orascom Construction Industries is a leading Egyptian EPC

contractor, based in Cairo, Egypt and active in more than 20

countries. OCI was established in Egypt in 1950 and owned by

Onsi Sawiris. The company is the first multinational Egyptian

corporation, and is one of the core Orascom Group companies. As

a cement producer, OCI owned and operated cement plants in

Egypt, Algeria, Turkey, Pakistan, northern Iraq and Spain, which

had a combined annual production capacity of 21 million tonnes.

The Talaat Moustafa Group (TMG), one of the largest conglomerates in Egypt, was

founded by the former Talaat Moustafa and is headed by his son, Tarek Talaat Moustafa.

Services sector

Banking & insurance

The banking sector has gone through many stages since the establishment of the

first bank in 1856, followed by the emergence of private sector and joint venture banks

during the period of the Open Door Policy in the 1970s. Moreover, the Egyptian banking

sector has been undergoing reforms, privatization, and mergers and acquisitions from 1991

up to today.

The banking system comprises 57 state owned commercial banks. This includes 28

commercial banks, four of which are state-owned, 26 investment banks (11 joint venture

21

banks and 15 branches of foreign banks), and three specialized banks. Although private and

joint venture banks are growing, many remain relatively small with few branch networks.

Egypt's banking system has undergone major reforms since the 1990s and today

consumers are faced with a liberalized and modernized system which is supervised and

regulated according to internationally accepted standards. Although the mortgage market is

underdeveloped in Egypt and as yet outsiders cannot so far get a credit for a property in

Egypt. In the by prospect, a new credit law will allow purchasers to remove property loans.

This will unlock the market significantly and create a tornado of development and real estate

activity in the near future.

Communications

Egypt has long been the cultural and informational centre of the Arab world, and

Cairo is the region's largest publishing and broadcasting centre. The telecommunications

liberalisation process started in 1998 and is still ongoing, but at a slow pace. Private sector

companies operate in mobile telephony, and Internet access. There were 10 million fixed

phone lines, 31 million mobile phones, and 8.1 million Internet users by the August, 2007.

Transport

Cairo Metro in Egypt, the subway of Cairo Transport in

Egypt is centered in Cairo and largely follows the pattern of

settlement along the Nile. The main line of the nation's 4,800-

kilometer (3,000 mi) railway network runs from Alexandria to

Aswan and is operated by Egyptian National Railways. The

badly maintained road network has expanded rapidly to over

21,000 miles (34,000 km), covering the Nile Valley and Nile

Delta, Mediterranean and Red Sea coasts, the Sinai, and the

Western oases.

In addition to overseas routes, Egypt Air provides reliable domestic air service to

major tourist destinations from its Cairo hub. The Nile River system (about 1,600 km

(990 mi).) and the principal canals (1,600 km.) are important locally for transportation.

The Suez Canal is a major waterway of international commerce and navigation,

linking the Mediterranean and Red Sea. The ministry of transportation, along with other

governmental bodies is responsible for transportation in Egypt. Major ports are Alexandria,

Port Said, and Damietta on the Mediterranean, and Suez and Safaga on the Red Sea.

Tourism sector

Egyptian tourism industry is one of the most important sectors in the economy, in

terms of high employment and incoming foreign currency. In 2009/10 tourism

in Egypt constituted 1% of the world's tourism market.[32]

It has many constituents of

22

tourism, mainly historical attractions especially in Cairo, Luxor and Aswan, but also beach

and other sea activities. The government actively promotes foreign tourism since it is a major

source of currency and investment. The political instability since January 2011 caused a

reduction in tourism.[33]

In 2012, the Egyptian government also allocated US$500,000 to the

Ministry of Tourism to promote the MICE sector for financial year 2012/2013.

Emerging Sectors:-

ICT sector

Egyptian information and communications technology sector has been growing

significantly since it was separated from the transportation sector. The market for

telecommunications market was officially deregulated since the beginning of 2006 according

to the WTO agreement.

While the move could open the market for new entrants, add and improve the

infrastructure for its network, and in general create a competitive market, the fixed line

market is de facto monopolized by Telecom Egypt.

The cellular phone market was a duopoly with prices artificially high but witnessed in

the past couple of years the traditional price war between the incumbents Mobinil and

Vodafone. A 500 minutes outbound local and long distance calling plan currently costs

approximately US$30 as compared to approximately US$ 90 in 2005. While the current price

is not so expensive, it is still above the international price as plans never allow "unlimited

night & weekend minutes."

The main barrier to growth for Egypt's ICT sector is the monopoly of

telecommunication corporations and poor infrastructure.

Large Company:-

Main article: List of companies of Egypt

In 2009, 3 Egyptian companies were listed in the Forbes Global 2000 list - an annual ranking

of the top 2000 public companies in the world by Forbes magazine. These companies were:

World

Rank

Company Industry Revenue

(billion

$)

Profits

(billion

$)

Assets

(billion

$)

Market

Value

(billion

$)

785 Orascom Construction

Industries

Construction 2.42 11.83 17.21 4.16

846 Orascom Telecom Telecommunications

Services

4.83 2.08 11.42 3.15

1384 Telecom Egypt Telecommunications

Services

1.80 0.43 6.19 4.51

23

Investment climate

The Egyptian equity market is one of the most developed in the region with more

than 633 listed companies. Market capitalization on the exchange doubled in 2005 from USD

47.2 billion to USD 93.5 billion, with turnover surging from USD 1.16 billion in January

2005 to USD 6 billion in January 2006.

The major industries include textiles, hydrocarbon and chemical production, and

generic pharmaceutical production. Unemployment is high at about 10.5%. Until 2003, the

Egyptian economy suffered from shortages in foreign currency and excessively elevated

interest rates. A series of budget reforms were conducted in order to redress weaknesses in

Egypt's economic environment and to boost private sector involvement and confidence in the

economy.

Major fiscal reforms were introduced in 2005 in order to tackle the informal

sector which according to estimates represents somewhere between 30% to 60% of GDP.

Significant tax cuts for corporations were introduced for the first time in Egyptian history.

The new Income tax Law No 91 for 2005 reduced the tax rate from 40% to 20%. According

to government figures, tax filing by individuals and corporations increased by 100%.

Given the large number of amendments to laws and regulations, Egypt has

succeeded to a certain extent in conforming to international standards. Very recently

the Cairo & Alexandria Stock Exchange (CASE) was welcomed with full membership into

the World Federation of Exchanges (WFE)—the first Arab country to be invited.

24

25

Technological Environment of Egypt:-

Egypt's IT spending is expected to increase from US$1.3bn in 2010 to US$2.1bn by

2014 and the Egyptian IT market growth is forecasted to remain below pre-economic crisis

levels in 2010, but economic recovery, tenders delayed from 2009 and higher incomes

boosted by pay raises for civil servants and other groups should help to keep sales on an

upwards trajectory.

A number of policies have been implemented to attract foreign investment in IT

outsourcing, including local employment subsidies, lower corporate taxes and deductions for

training costs. The Egyptian minister of state for administrative development has said that

200 government services will soon be available online through a new e-government portal.

The portal will offer 70 services in both English and Arabic. According to the Ministry for

Administrative Development, more than 20 government agencies currently offer services and

licenses online.

Egypt's computer hardware sales are projected at US$821mn in 2010 and are

forecast to reach around US$1.3bn in 2014.Egypt's IT market will stay hardware dominated,

with spending on PCs sustained by initiatives like the 'Computer for Every Student' and 'PC

for Every Home' programs. Hardware accounted for an estimated 62% of Egypt's IT spending

last year. Households account for 20-25% of unit sales, with almost 1-1.5mn households said

to possess a computer at present.

Overall spending on software remains rather low, which reflects the relative

immaturity of Egypt's IT market. One market driver has been a significant fall in software

piracy, with the illegal software usage rate, as measured by the Business Software

Association, falling a further 1% to 59% in 2008. While large corporations have long

understood the business case for deploying technology, small and medium-sized enterprises

is increasingly beginning to see such investments as important if they are to avoid being

overtaken by more tech-competent competitors.

In 2008, Egypt continued liberalization of the telecoms market, with the award of

a second national fixed license. This development, which followed the award of 3G licenses

to three mobile telecoms service providers in 2007, is likely to drive new opportunities for IT

vendors. As well as generating additional spending on IT products and services from the

telecoms sector, the spread of internet should provide a boost to the PC market over the next

few years.

The Egyptian IT services market is dominated by demand from government,

finance and telecoms sectors, which account for more than 25% of Egypt's total spending.

26

In Ancient Egypt: - The Geographical & Historical Setting:-

In the course of a period that lasted for several millenniums, Egypt, an ‗island

squeezed into the hollow of the Nile Valley, and bordered on the north by the Mediterranean

Sea, by deserts on the east and west, and by the infinity of the black world on the south,

created a civilization out of nothing. Behind her lay the immense empty stretch of prehistory,

in which the slightest technological achievement had required hundreds and perhaps thousand

of years of development. And then, relatively suddenly it seems, the invention of a novel

device unlocked new possibilities. This tool was probably the hafted hammer or miners pick

which, by performing as an addition of the power of the hand, without doubt instated the age

of the use of building stone and the working of quarries and mines. From then on, inventions

followed in quick succession.

This period of gestation seems to have begun in the predynastic age (fifth

millennium B.C.), and to have ended with the Thinite kings (toward 3,300 B.C.). By the time

of the first Memphite dynasties (Old Kingdom, 2778 to 2420 B.C.), when the pyramids were

built, Egyptian technology had reached complete development. Then, as if exhausted by this

great effort, which had spanned three millenniums, it made little further progress. From then

on, the same mallets, the same copper or bronze gravers, the same methods of stonecutting

and woodcutting, continued to be used. This end of progress must undoubtedly be attributed

to social life. Starting as a force of innovation by virtue of the needs it creates, society very

often becomes a hindrance to progress through tradition, routine, and the development of

misleading customs that lead to dead ends.

Egypt owes the elements of her comfort to the oily land of the Nile, with which

the Egyptians molded bricks to be used in the construction of buildings. This type of

construction could have continued indefinitely but for the chance discovery of a new need:

the desire for eternal life. Then Egypt energetically set to work to create the components of

eternity. The perishable architecture of mud, reeds, and wood was monumentalized by

transposing the same elements into stone. Pharaonic Egypt remained

faithful, however, to alluvium for her private dwellings and even for the

palaces of her kings, which continued to be built of dried brick. But her

gods and her houses of eternity had to be constructed of permanent

materials. No material was sufficiently permanent neither sandstone nor

the granite of Aswan nor the diorite from the desert. Egypt invented

techniques that still amaze us: The people of the Old Kingdom succeeded

in sculpturing with great suppleness of modeling the famous diorite statues of Chefren that

are the pride of the Cairo Museum; they raised the stones of the Great Pyramids; they lighted

the depths of the mines they exploited without being smothered by the fumes of combustion

gas from the torches. With their scanty stone or copper tools, they succeeded in piercing

cornelian beads, in carving statues of gigantic proportions from granite.

Ancient Egyptians don‘t seem very advanced compared to civilization in the

21st century, but you have to realize we are in a much more advanced time than they were.

We have had a lot more time to develop this far into computers, televisions, video games, and

27

medical knowledge. They had a shorter amount of time to develop a water clock, sundial,

pyramids and the tools to build them, and a time system.

Mummification:-

A mummy is one of the most

recognizable legacies of ancient Egypt. It has

fascinated people throughout history because it

reveals humanity — one can clearly see that this is a

human being — and yet appears to conceal identity:

its entire body, including its face, is hidden from view.

The mummy pictured below is on loan from the Carlos Museum in Atlanta,

Georgia, and can currently be seen on site at the Museum of Science, Boston. The Beth Israel

Deaconess Medical Center made available to us some of the most advanced CAT scan

imaging technology available in the Northeast, allowing us to generate about 2500 images of

the mummy to be used for the advanced 3D imaging. Mummification was an important step

to ensuring one's afterlife in Ancient Egypt — the body had to be preserved so that one's ba

— or soul — could re-enter the body for eternity. Mummification was a very effective way of

preserving a person after death and making sure that the ba would have a place to return to

for a long time to come.

Clocks

Egyptians clocks were much different from ours as well. There were two types of

clocks in Ancient Egypt—a water clock and a sundial. A water clock sounds very

complicated, but really it‘s not. It is a little stand with a pot on the top of the

stand and a pot at the bottom of the stand. The pot at the top of the stand had a

hole drilled in the side. This pot was then filled with water and the water would

flow out of the top pot down to the bottom pot. When the water was at a certain

level, it was a certain time. The only disadvantage to the water clock was that you had to keep

refilling it.

The sundial was basically a circle with numbers written around it with a little stick

in the middle. When the stick‘s shadow fell at a certain number, it was that time.

One big advantage the water clock had over the sundial was you couldn‘t use the

sundial at night and the water clock you could.

Technology in Modern Egypt

The information technology (IT) market has grown

rapidly in the last few years. The formation of a dynamic and

ambitious Ministry of Communications and Information

Technology (MCIT) in 1999 gave this sector a visible and much-

needed boost. The IT sector is growing at more than 10%

28

annually. MCIT continues to implement its ambitious plans to increase software exports,

which reached $150 million in 2003 compared to $50 million in 2000. Other national

objectives: train more skilled engineers, support E-government and E-commerce, and

increase IT awareness among the population.

Egypt's Smart Village (ESV)

The construction of the Egypt's Smart Village is an initiative designed to provide a

high tech environment necessary to attract IT companies to set up offices in Egypt. It is

located on a 300-acre park just 20 minutes away from downtown Cairo, 10km from the

pyramids and is also easily accessible from Cairo International Airport. The Smart Village

provides a state-of-the-art infrastructure catering to every company's business needs.

Upon completion of all the phases there will be 58 office plots, accommodating

approximately 30,000 employees within a total office area of 1,336,000 square meters. Any

company in the IT and Telecommunications sector can rent office spare or buy land and build

their own offices in the Smart Village.

Academy of Scientific Research and Technology of Egypt (ASRT)

Egyptian academy offering trainings, projects and seminars about scientific

research and technology. The main functions of ASRT, which was founded in 1948, are to

support research directed towards solving critical national issues; support application of up to

date technology; prepare policies to make stronger linkages involving science and technology

institutes; promote basic research and support research institutions; and progress international

affairs in science and technology. Since 1986, the Academy has been with the Minister of

State for Scientific Research, the official spokesman for ASRT activities before the political

and legislative authorities.

Abu-Ghazaleh Intellectual Property (AGIP)

On 20 April 2000 a memorandum of understanding has been electronically signed

between the Egyptian Academy of Scientific Research & Technology, and the GCC Patent

Office. The memorandum was signed by Dr. Mohammed Yousry, Head of the Academy and

by Mr. Mohammed Al-Ali Al-Rasheed, General Director of the Patents Office.

Dr. Fawzi El-Rafi, Deputy to the Head of the Academy for Technological

Development and Scientific Services, announced that this memorandum provides that the

Egyptian Center examines patents for the GCC whether they are Arab, Egyptian or Foreign

Egyptian Academy will also participate in training and the creation of technical cadres as

well as exchange views on various issues relating to industrial property in the light of

international changes and new supposed to provide general guide to this subject, with the

availability of data Avenue, which have positive impacts on decision-making process for the

countries in the world Granting a patent to prove the seriousness with which is one of the

conditions for granting patents .

29

National Research Center (NRC)

President: Prof. Dr. Hany El Nazer

Address: El Buhoth St.., Dokki, Cairo, Egypt.

Tel.: (+202) 33371362 /433/615/933/449

Fax: (+202) 33370931

Postal Code: 12311

Email: info@nrc.sci.eg

Web: www.nrc.sci.eg

NRC was established as an independent public organization in 1956, with the aim

‖to foster basic and applied scientific research, particularly in industry, agriculture, public

health and other sectors of national economy‖. It is the largest of all institutions affiliated to

the ministry of Scientific Research and employs about 60% of all scientists working in these

institutions.

Between the 6os and 80s of the last century six divisions of NRC developed into

independent research institutes:

The national Institute of standards.

Petroleum research institute.

Central metallurgical research institute.

Theodore Bilharz institute.

Northern Coast Technology Valley (NCTV) (Under development)

This proposed techno pole is still at the study stage. The project is being

considered by Alexandria Governorate, the Ministry of Higher Education, and the Ministry of

State for Scientific Research and the Social Fund for Development.

Technologies for Agriculture (TECA) FAO

TECA is an FAO initiative that aims at improving access to information and

knowledge about available proven technologies in order to enhance their adoption in

agriculture, livestock, fisheries and forestry thus contributing to food security, poverty

alleviation and sustainable development.

Fishing Technologies from FIGIS

Fish capture technology encompasses the process of catching any aquatic animal,

using any kind of fishing methods including artisanal fisheries, normally operated from a

vessel.

Biotechnologies in Use in Developing Countries (FAO-BioDeC)

Meant to gather, store, organize and disseminate, updated baseline information on

the state-of-the-art of crop biotechnology products and techniques, which are in use, or in the

pipeline in developing countries.

30

Space technology centre

The Centre develops systems for autonomous spacecraft piloting and the

management of spacecraft data both onboard and on the ground.

http://spacetech.computing.dundee.ac.uk/

The Nuclear Research Center (NRC)

One of four research centers under the Atomic

Energy Authority (AEA) is the oldest and the biggest

research institute in the AEA. Its activities are directed

towards the basic nuclear sciences, the front end of the

nuclear fuel cycle, the reactors and the applications of

radioisotopes in medicine, industry, and agriculture. The

center houses research and service facilities,

including: National Center for Radiation Research&

Technology (NCRRT), National Research Institute of

Astronomy and Geophysics (NRIAG), Centre for Remote

Sensing.

Satellite

Egypt and Italy to Build Deserts at Egypt is signing an agreement with Italy to

build and launch an environmental satellite. The Italian Space Agency and Egypt's National

Authority for Remote Sensing and Space Sciences will jointly develop and launch Deserts at.

The spacecraft will be used to monitor coastal erosion, desertification, and agricultural and

water resources. No timeline was provided.

The satellite will use the Microsatellite Italiano di Technologia Avanzata (MITA)

platform, which weighs about 50 kg and can accommodate payloads of 100 to 300 kg. The

platform is reported to cost about 5 million Euros.

The project will be conducted in four stages: training of Egyptian engineers and

technicians, design, satellite production, and launch. The program may include the

construction of a land station for receiving and processing satellite images.

31

Research & Development Expenditure (% of GDP) in Egypt:-

The Research and development expenditure (% of GDP) in Egypt was 0.21 in

2009, according to a World Bank report, published in 2010. Expenditures for research and

development are current and capital expenditures (both public and private) on creative work

undertaken systematically to increase knowledge, including knowledge of humanity, culture,

and society, and the use of knowledge for new applications. R&D covers basic research,

applied research, and experimental development. The graph showing this as follows:-

32

Technological factors in case of Tea Industry of Egypt

As Egyptian agriculture was transformed over the last century in large measure as

a result of technological change, it have contribution to the tea industry as well because if

tea being an agricultural product. Technological changes included the switch from basin

to perennial irrigation, mechanization, application of pesticides and chemical

fertilizers, breeding new seed varieties, and, in the 1980s, the beginning of the use of drip

irrigation and plastic greenhouses. In the 1980s, the main agricultural tasks to undergo

mechanization were plowing, threshing, and water-pumping. Egypt has a pretty well advance

infrastructure available in its agriculture sector which is needed for a tea industry. In case of

human resources, it can be said that Egypt has more than enough labour force who can be

employed in the tea industry.

EGYPT: The New Outsourcing Hub

Egypt is developing a devoted IT infrastructure and with about 30,000 engineering students

graduating every year, the country is mounting a mixed infrastructure and labour asset.

The teeming Indian city of Bangalore is so known for

its outsourcing industry that being ―Bangalore,‖ has

become part of the lexicon of everyday life as well as

industry folklore. In Asia, Bangalore and several

cities in India, the Philippines, China and Malaysia

are among the most well known back office

processing or BPO destinations in the world.

Recently, Poland has earned the BPO title of the

European Union. Now, those countries may have to

prepare for another new and fast growing entrant in the market from another region: Egypt.

It may seem improbable that the Land of Pyramids and the Pharaohs would now also strive to

be king in outsourcing. But Egypt is getting there. In 2009, ITIDA, (Egypt‘s Information

Technology Industry Development Agency), won the prestigious off shoring Destination of

the Year award by the National Outsourcing Association, an award that it also won in 2008.

On the A.T. Kearney Index of 2009, the country ranks sixth as a global off shoring

destination ahead of competitors like Morocco, Israel and Jordan.

These kinds of awards and rankings are indicative of the type of progress that Egypt has

made in becoming a premier outsourcing hub. Egypt is dreaming big. The global outsourcing

industry is estimated to generate revenues of $30 billion a year, and Egypt is hoping to

capture a large chunk of that. The government expects the outsourcing industry in Egypt to

earn $1.1 billion this year and double that by 2013. Companies like Microsoft,

Teleperformance, Google, Vodafone, Exceed, ECCO and E Group have already established

contact centers in Egypt.

33

And the Egyptian government is playing its part. ITIDA, which is affiliated with Egypt‘s

Ministry of Communications and Information Technology, has been aggressive in promoting

Egypt as an outsourcing destination. Not only does it train 3,000 students every year as call

centre representatives, but ITIDA is offering to match the difference if any other market

offers lower costs. Egypt is also rapidly developing its information infrastructure. High-tech

business parks like the Smart Village, set up in 2003 on the outskirts of Cairo, can employ

nearly 35,000 workers. Also coming up is the Maadi Contact Centre Park, which can seat

60,000 workers.

So why has Egypt become a hot BPO destination? The advantages are many. Egypt has

proved that it can make costs just as competitive as those, for example, in India or the

Philippines. In addition, it boasts of a multi-lingual workforce fluent in Arabic, English,

German, Spanish and Italian. As well, the country is just four hours away by flight to many

places in Europe, and its time zone overlaps European business hours better than India or the

Philippines. What‘s more, Egypt works on Saturdays and Sundays, offering quality

outsourcing even on those traditionally weaker days. (Egypt‘s ‗weekend‘ falls on Thursday

and Friday). These are the sort of competitive advantages that should be giving governments

in India and the Philippines sleepless nights.

Of late, the Middle East seems to be popping up with surprises. Now, Egypt is giving India a

run for its money. With extensive government backing, it may not be too long before

‗Cairoed‖ becomes part of the outsourcing lexicon.

34

35

Economy Stats: Egypt Vs. India:-

Egyptian Economy stats

Indian Economy

stats

Leader

President: Mohammed Mursi

President: Pranab Mukherjee

Aid as % of GDP

1.3% Ranked 79th. 3 times more than India

0.3% Ranked 113rd.

Economic freedom

1.65 Ranked 112nd. 10% more than India

1.5 Ranked 123rd.

Exports to US

$356,100,000.00 Ranked 61st.

$3,233,200,000.00 Ranked 19th. 8 times more than

Egypt

GDP

$334,400,000,000.00 Ranked 33rd in 2006.

$4,164,000,000,000.00 Ranked 5th in 2006. 11 times more than Egypt

GDP growth > annual %

4.94 annual % Ranked 84th in 2005.

9.23 annual % Ranked 14th in 2005. 87% more than Egypt

GDP (per capita)

$4,435.20 per capita Ranked 116th in 2006. 18% more than India

$3,751.99 per capita Ranked 121st in 2006.

GDP per capita in 1900

$509.00 Ranked 40th.

$625.00 Ranked 38th. 23% more than

Egypt

GDP per capita in 1950

$517.00 Ranked 52nd.

$597.00 Ranked 49th. 15% more than

Egypt

GDP per capita in 1973

$947.00 Ranked 49th. 11% more than India

$853.00 Ranked 50th.

GDP > PPP

$282,026,000,000.00 Ranked 30th.

$3,362,960,000,000.00 Ranked 4th. 11 times more than Egypt

Gross national income >

constant LCU

472780500000 28322300000000

Human Development

Index

0.659 Ranked 120th. 9% more than India

0.602 Ranked 128th.

Income distribution >

Poorest 10%

4.4% Ranked 5th. 26% more than India

3.5% Ranked 22nd.

Income distribution >

Richest 10%

25% Ranked 91st.

33.5% Ranked 38th. 34% more than

Egypt

Population under $1 a day

3.1 Ranked 51st.

44.2 Ranked 11th. 13 times more than

Egypt

Poverty > Share of all poor

people

0.18 % of world's poor Ranked 33rd.

41.01 % of world's poor Ranked 1st. 227 times more than

Egypt

Research and development

spending

1.9% Ranked 13th. 2 times more than India

0.6% Ranked 39th.

Technological achievement

0.24 Ranked 51st. 20% more than India

0.2 Ranked 59th.

Wealthier Person Nassef Sawiris ($3.1bn US) Mukesh Ambani ($19.5bn US)

36

Exports Crude oil and petroleum products, cotton,

textiles, metal products, chemicals.

petroleum products, textile

goods, gems and jewelry,

engineering goods, chemicals,

leather manufactures

External Debt $33,740,000,000 US $289,700,000,000 $

Exchange Rate

Egyptian pounds (EGP) per US dollar - 5.4

(2008 est.), 5.67 (2007), 5.725 (2006), 5.78

(2005), 6.1962 (2004)

Indian rupees (INR) per US

dollar - 43.319 (2008 est.),

41.487 (2007), 45.3 (2006),

44.101 (2005), 45.317 (2004)

SOURCE: United Nations Development Program. Human Development Report

2001. New York: Oxford University Press, 2001, Table A2.1. via ciesin.org

Egypt – India Relations:-

* Modern Egypt–India relations go back to the contacts between Saad Zaghloul and

Mohandas Gandhi on the common goals of their respective movements of independence.

* In 1955, Egypt under Gamal Abdul Nasser and India under Jawaharlal Nehru became the

founders of the Non-Aligned Movement.

* During the 1956 War, Nehru stood supporting Egypt to the point of threatening to

withdraw his country from the British Commonwealth.

* In 1967, following the Arab-Israeli war, India supported Egypt and the Arabs. In 1977,

New Delhi described the visit of President Anwar al-Sadatto Jerusalem as a "brave" move

and considered the peace treaty between Egypt and Israel a primary step on the path of a

just settlement of the Middle East problem.

* Major Egyptian exports to India include raw cotton, raw and manufactured fertilizers, oil

and oil products, organic and non-organic chemicals, leather and iron products.

* Major imports into Egypt from India are cotton yarn, sesame, coffee, herbs, tobacco and

lentils.

* The Egyptian Ministry of Petroleum is also currently negotiating the establishment of a

natural gas-operated fertilizer plant with another Indian company.

37

Economic Relations

India is the 4th largest trade partner of Egypt after the US, Italy & Saudi Arabia.

Oil:-

In 2003, Indian giant Reliance signed a contract with the Egyptian General Petroleum

Corporation (EGPC) to import 8 shipments of raw oil in 2003. Two years preceding the

contract, they had imported shipments from Egypt. In August 2004, the Indian company

GAIL procured 15% of the Egyptian Company Nat Gas which deals with marketing and

distributing natural gas in Egypt. Egyptian and Indian ministers of petroleum met in 2004 in

Egypt to discuss the prospect of investment and purchase of oil and gas from Egypt. In 2003,

Indian giant Reliance signed a contract.

Power:-

In 2008, India's KEC International Limited, received its largest order worth 636 crore

(US$120.2 million) from Egyptian Electricity Transmission Company. The order was funded

through the European Investment Bank and the Egyptian National Bank. The order included

design, supply and construction of power transmission towers and laying of 196 km of

transmission lines in Egypt. It was completed on a turnkey basis within a period 24 months.

This, however, was not the first time. KEC International has been laying power transmission

lines in Egypt for more than 40 years. Recently, KEC International was engaged in a 60 crore

(US$11.34 million) contract for supply of overhead transmission towers for the Egypt-Jordan

Transmission Line.

Investments:-

In 2011, Egyptian investment in India was at about USD 30 million. El Sewedy

group, an Egyptian company, manufactures Electric meters in India. Another Egyptian

company, Orascom Telecom, used to have 10% stake in the then Hutchinson-Essar which has

since been bought by Vodafone.

The current Indian investment in Egypt stands at $2.5 billion in about 45 projects.

Alexandria Carbon Black, the Alexandria Fibre Co., Dabur India's production facility for its

cosmetics line, Niletex, Auto Tech Engineering, Marico's acquisition of two hair care brands

and the Sanmar Group's acquisition of a unit of Trust Chemicals of Egypt represent some of

the main Indian investments in Egypt. GAIL has equity and management stake in two gas

distribution ventures in Fayoum and Cairo as well as in Natgas. In March 2008, Gujarat State

Petroleum Corporation Ltd (GSPC) signed a Concession Agreement for two oil and gas

exploration blocks in Egypt. GSPC subsequently acquired three more exploration blocks in

the Red Sea region in 2010. Satyam Computers and Wipro have set up global delivery centers

in Cairo. The Oberoi Group has been managing a hotel and Nile cruises; Kirloskar Brothers

assemble diesel engines and irrigation pump sets in Egypt; Ranbaxy has an Egyptian

subsidiary for manufacturing pharmaceutical formulations; Ashok Leyland, Tata Motors,

Maruti Suzuki and Mahindra & Mahindra are marketing their vehicles in Egypt, and Bajaj

Auto dominated the three-wheelers market.

XIII

XIV

WEBSITES:-

http://www.mop.gov.eg/MOP_META/nsdp.htm

amanyabdelkhalek@yahoo.com

http://knowledgepipe.blogspot.in/2010/05/egypt-pest-analysis.html

http://www.egypttravelsearch.com/egytec.html

http://www.scribd.com

http://www.nationmaster.com/compare/Egypt/India/Economy

http://www.ifitweremyhome.com/compare/EG/IN

http://www.aneki.com/comparison.php?country_1=India&country_2=Egypt

http://www.economywatch.com/world_economy/egypt/indo-egypt-trade-relation.html

http://www.tradingeconomics.com

http://www.wiki.eg

A

Global Country Study Report

On

“The Jute Industry of Egypt”

In the Partial Fulfillment of the Requirement

Of the Award of the Degree of

Master of Business Administration

In

Gujarat Technological University

Semester IV (2011 – 2013)

Submitted By:-

Name Enrollment

No.

Atish S. Shah 117240592003

Jacky P. Shah 117240592007

Harshit B. Shah 117240592011

Trushal B. Ka. Patel 107240592054

Guided By:-

Dr. Hitesh Kumar Shah

Asst. Prof. KSMCS

Submitted To:-

K. P. Patel School of Management & Computer Studies

Jeevanshilp Campus, Kapadwanj.

Affiliated To

Gujarat Technological University

I

Students’ Declaration

We Atish Shah, Jacky Shah , Harshit Shah and Trushal Ka.Patel hereby declare

that the report for Global Country Study Report entitled “The Jute Industry of Egypt” is a

product of our personal efforts & our thanks to other work, publications, references, if any

have been duly acknowledged.

Place: - Kapadwanj

Signature:-

Date: - 31th March, 2013.

Atish S. Shah

Jacky P. Shah

Harshit B. Shah

Trushal B. Ka.patel

II

Preface

“Experience is the best teacher.” This saying has played a guiding role in

including as a part of the curriculum of the M.B.A Programs of the Gujarat

Technological University. Reasonably often these days’ inhabitants discuss on practical

knowledge, both in academic institutions and outside. At each and every aspect in life we

require some sort of theoretical and practical knowledge. It means only classroom lecture

may not be enough to get the proper knowledge either in the business field or social life. This

global country report on various PESTAL Analysis of different sectors and industries of Egypt

in Semester - 4 would allow us to know the various environmental factors study and how to

interlink that county or to interpret the study in our countries context, and it allow the student

study real Business Environments.

We know that Project is for the development and enhancement of the

knowledge in this particular field. It can never be possible to make a mark in

today’s competitive era only with theoretical knowledge when industries are developing

at global level, practical knowledge of administration and management of business is

very important. Hence, such kind of platform is of great importance for a student and full

efforts should be made to capitalize on it.

With a view to expand the boundaries of thinking, we have undergone Global

Country Study Report (GCSR) in second year of MBA (sem-4) .We have made deliberate

efforts to collect the required information about the Jute Industry of Egypt to fulfill project

objective as to creating an environment or platform for our country to make handy business of

Jute with Egypt.

III

Acknowledgement

Any work accomplishment is seldom on personal achievement there are usually

many people behind it who contribute to its goodness in form or the other. To

acknowledge is very great way to show your gratitude towards the people who have

contributed in your success in one or other way.

We find words inadequate to express our gratitude to Dr. Hitesh Kumar Shah (Asst.

Professor) for providing us an opportunity to carry out our Global Country Study Report

(GCSR) for his continuous guidance and supervision and support during the project. We

sincerely thank him, despite his tight schedule spared time for discussions and gave basic

ground rules and directions, without which completion of this project would have been

impossible.

We are highly grateful to the management of K. P. PATEL SCHOOL OF

MANAGEMENT for giving us the opportunity to work on this Project and in the process

enrich ourselves with immense learning on all aspects.

We take this opportunity to thank our Director Sir – Dr. Hrudanand Misra and all

other faculties for their encouragement and the office staff for providing us all the

facilities for preparing this report more learning oriented.

At last but not the least we also express our feeling of gratefulness to all those who

directly or indirectly have inspired us and helped us to prepare this report.

IV

Executive Summary

Egypt's Economical & Technological system here refers to the economical &

technological structure, GDP, inflation rate, consumer index, technological changes &

diffusions that are implemented in Egypt's mainland and regulate the state power,

government, and the relationships between the state and society in the People's of Egypt since

its founding. This report contains both economical and technological situation and

accordingly the all analytical study of the whole Jute Industry of the Egypt and India the

objective was to find the opportunity of business & to start the business of Jute or to export

the row jute and jute products in the Egypt. The aim was to go through this report how

the different business of different sectors runs in Egypt and what government policy and

political situation are benefited to Indian country. As per the report the economical &

technological situation is having well for Indian business. Project work helps to deal with

the real government policy and party of different country like Egypt. Project report consists of

the brief description of an Egyptian Jute Industry data and tradition, different technological

principal in Egypt, and also constitutional frame work of Egypt section which provide the

overview and background information about the country different aspects, other section of

the report like different export, import and consumption of Jute and Jute Products in the

Egypt and also for the whole world. The tables and graph provides

different information like export, import and consumption, etc. & for us and government,

these data are very useful to assume or forecast how the Egyptian economical and

technological situation are strong for developing the business opportunities for India specially

for the Jute Industry.

Macro economics enriches our knowledge of the functioning of an economy by

studying the behavior of national income, productivity, investment, savings and

consumption. Furthermore, it throws much light in solving the problems of joblessness,

inflation, economic instability and economic growth. The concept of stock and flow are

mainly used in the macro economics or in the theory of income, productivity and

employment. Lastly, both the concepts of stock ad flow variables are very significant in

modern theories of income, interest rate, business cycles etc.

During the fourth quarter of 2009, the Egypt economy started emerging from the

recession that had started in the same period a year earlier. In this quarter the year-on-year

decline in economic activity of advanced economies was only 0.7%, compared to 4.6% in

the first quarter. It is expected that positive growth will be recorded from the first quarter of

2010, with most major developed economies participating in this turnaround. However,

recovery will be slow – economic growth of about 2.0% is expected in this economic

grouping in 2010.

V

Jute Industrial sector is an important segment of Indian economy. Jute has been the

most versatile natural fibre. The jute sector produces products ranging from low value geo-

textile to high end garments, decorative, upholstery etc. A lot of the jute plants are currently

connected in producing jute blended threads. Jute business situation in India have been

changed as of building customary canvas to high end style garments. Jute industry in India

contributes a key role in the economy. The jute export counts to about 1000 crore. The

import of raw jute has been dropped by 66 per cent in 20008-09. The EXIM policy has

announced duty free for import of raw jute. Indian Jute industry may think following idea;

it is the circumstance of the whole world for producing value added products out of jute

material. Marketing and promotion of jute has been a major problem, and so the

government and industry should come forward and take adequate steps in this direction like

highlighting its eco-friendly and biodegradable characteristics. Labour problem is one of

the major troubles faced by the jute industry. For its solution government and industry

should piece of equipment a tri-party agreement between government, mill owners and the

trade unions, so as to overcome loss of work by strikes, lockouts, law off, closure of mill,

etc. The Indian jute industry is having lots of opportunity by its side; it is not only one of

the oldest industries of India but also among the major employer of the nation. There are a

lot of strengths and also much opportunity to grab them but it could only be done if it

overcomes its weaknesses and threats. Jute, the golden fibre, has a potential of reaching the

height where it used to be in the past, but it is only possible through constant efforts by

government and a proper follow-up by the industry. If the government removes all the

hurdles that are stated above then the jute industrial economy will flourish lot although not

impervious to conditions in advanced economies, emerging economies fared significantly

better in 2009. Egypt and India did particularly well, with the latter recording a GDP

growth rate of 4.6% in 2009 & 5.1% in 2010.

Jute Industry Delegates Leave for Egypt:-

The following discussion or points show that why India goes to start the business

of Jute in Egypt and the points are taken from the report of the Business Standard.

Delegates representating the jute industry will leave today for Egypt and Turkey for

promoting business for the golden fibre industry.

The delegation will have representation of Indian Jute Mills Association (Ijma),

Hastings Jute Mill, Howrah Jute Mill, National Jute Manufacturers Corporation

(NJMC) and Jute Manufacturers Development Council (JMDC).

During the programme, government officials and jute industry experts will explore the

business prospects and focus on effective market building in the two countries with

special emphasis on jute yarn and hessian.

VI

The delegation will meet the Egyptian manufacturers for supply of yarn and hessian.

India holds a greater market share for yarn in Egypt than Bangladesh, while for hessian

the latter enjoys a greater share than India.

The team of jute experts will study the market structure and the competitive advantage

enjoyed by Bangladesh in Egypt and Turkey. Accordingly necessary steps will be taken

to promote trade between the concerned countries and India.

The delegation will visit a number of places like Ankara, Adena and Istanbul. In

Turkey, we will concentrate on hessian, yarn and odour free bags devoid of

hydrocarbon, said S Bhattacharya, secretary of JMDC who is a part of the delegation.

The odour free bags have been specially manufactured with Indian technology.

The export of jute goods from India to Turkey stands at 15,000 tonnes. of which 10,000

tonnes are yarn. Turkey is a growing market for jute yarn. Half the total exports of jute

goods from India to Turkey is jute yarn.

The jute industry has been expanding really fast spanning from a wide range of life

style consumer products, with all courtesy to the versatility of Jute. Innovative ways of

bleaching, dyeing and finishing processes –the jute industry now provides finished jute

products that are softer, have a luster and also an aesthetic appeal.

Changing Scenario of Jute industry:

At present, jute has been defined as an eco-friendly natural fiber with utmost

versatility ranging from low value geo-textiles to high value carpet, apparel, composites,

decorative, upholstery furnishings etc.

In future, a number of jute mills and mini-jute plants have been seen to be engaged in

jute products and jute blended yarns. We all know that the uses of jute are manifold, with the

traditional usage pattern remaining constricted to packing, hessian and carpet backing.

The jute sector in India engages a key role in the Indian economy, providing direct

employment to about 0.26 million workers, and supporting the lives of around 4.0 million

farm families. Around 0.14 million people are believed to be engaged in the tertiary sector,

that supports the jute industry. Currently it also contributes to exports to the tune of about `

1000 crore.

India is the largest producer of jute goods in the world, while Bangladesh is the

largest cultivator of raw jute. The cultivation of Jute in India is mainly confined to the

eastern region states - West Bengal, Bihar, Assam, Tripura, Meghalaya, Orissa and Uttar

Pradesh. Nearly 50 percent of total raw jute production in India alone figures in West

Bengal.

VII

In India 4000,000 families are involved in the cultivation of raw jute. There are 76

jute mills in India and nearly 1,37,679(Oct.2001) people are employed in these mills. Several

thousand other people are engaged in several jute related diversified goods. India is also self

sufficient in the jute seed production. More than 90 percent of seeds are produced by the

state seed corporation of Andhra Pradesh and Maharashtra.

Jute, as a natural fibre, has many inherent advantages like lusture, high tensile

strength, low extensibility, moderate heat and fire resistance and long staple lengths. It is a

biodegradable and eco-friendly. It has much advantage over synthetics and protects the

environment and maintains the ecological balance.

Due to declining economic activity, infrastructure bottlenecks in terms of electricity

supplies and transport and harbor capacities, as well as the shortage of skilled and

experienced human resources, eased temporarily in 2009. Increasing economic activity in

2010 will put renewed pressure on these infrastructure components. With regard to export

logistics through the Richards Bay Coal Terminal, rail capacity remained a serious problem

even during the recession.

Future Scenario for Jute Industry:-

From the whole study and report we can forecast about the future scenario of Indian

Jute Industry and how we can develop or maintain the relations with other countries such as

Egypt, Thailand, etc. as follows:-

The protection given to the jute growers as well as jute industry is unique specially

after the promulgation of the Jute Packaging Materials (obligatory utilize in packing supplies)

Act 1987 (JPM Act 1987) whereby 30-40 percent of the production of the jute industry is

absorbed by Food Corporation of India and other State Government agencies. The jute

industry will have to take a view on such continued protection and subsidies and take

alternative steps to ensure the continuity and growth of this sector.

In spite of a number of Plan schemes, protection to the industry in the form of the

JPM Act, assistance through UNDP and CCF schemes in the past the jute industry has not

been able to maintain a steady growth pattern. During the Eighth Plan Period the average

annual production was to the tune of 14.04 lakh MT and, in the Ninth Plan period, the

corresponding figure was 16.18 lakh M.T representing an increase of 15.25 percent. During

the last two decades this difference represents the only significant growth in production of

jute goods.

The Jute Technology Mission which will be formally launched in this Plan Period

aims at a holistic improvement of this sector and is a golden opportunity for the industry in

sustaining itself independently in the years to come. Moreover, the National Jute Policy

announced in April 2005 is also unique in the 150 years of the jute industry. The following

table shows the target of India for Jute Industry.

VIII

Table: Eleventh Five Year Plan targets at a glance: Item Target for 2012-13

Production of raw jute & Mesta 129 lakh bales

Production of jute goods 20 lakh MT

Domestic consumption of jute goods 15.5 lakh MT

Export of jute goods 4.5 lakh MT, Traditional 3 lakh MT &

JDPs 1.5 lakh MT

Import of raw jute 95,000 MT annually

Import of jute goods 25,000 MT annually

Suggestions to Achieve the Targets:-

The VAT of 12.5 percent imposed on all jute goods except sacks, bags and yarn needs to

be reviewed and brought down to a lower slab. In particular, this will help in promotion

of diversified jute goods.

Under Mini Mission IV of the Jute Technology Mission, there is a separate scheme for

setting up of jute parks. The jute parks are supposed to have assured power supply,

exhibition/ marketing halls, warehousing, testing laboratories for yarn, fabric dyeing,

bleaching plants besides providing common facilities like roads, effluent treatment plants,

sanitation, sewerage, drainage systems, and state-of-the-art telecommunication facilities.

Branches of commercial banks, Office of the Custom & Excise Department as well as

Sales Tax Department would be there to ensure quick clearance of shipment.

There is a need to set up new JRMBs in states, which have not been covered.

A newsletter could be brought out in regional languages containing information about

opportunities and latest developments in the jute sector. This material could be circulated

among all beneficiaries of various programmes.

To prevent highly active and successful NGOs from migrating to other areas they could

be oriented to explore the export market. NCJD can assist by providing information on

future overseas marketing events besides documentation etc.

Standardization of product quality by dissemination of detailed designs can help in

getting better market value.

IX

Comparison of the Egypt and Other countries for Jute:

Top 10 countries in the world World share for Egypt

Egypt is #11 in the world ranking. Egypt has a world share of 0,1%.

Thus the above graph show the jute data for Egypt and India and the blue line is for

Egyptian Jute Industry and Orange line for the Indian Jute Industry which far above than the

Blue line so, it is good for the Indian context.

Thus from the whole study we can summarise as Egypt’s Economy ranked 27th

in the

world economies having the currency as the Egyptian pound (EGP) and in Jute 11th

rank.

Thus from the whole study we can derive the relations of Egypt & India as, bilateral

relations between Egypt and India. Modern Egypt–India relations go back to the contacts

between Saad Zaghloul and Mohandas Gandhi on the common goals of their respective

movements of independence. Major Egyptian exports to India include raw cotton, raw and

manufactured fertilizers, oil and oil products, organic and non-organic chemicals, leather and

iron products. Major imports into Egypt from India are cotton yarn, sesame, coffee, herbs,

tobacco and lentils.

Economic relations: India is the fourth largest trade partner of Egypt after the US, Italy and

Saudi Arabia. Thus India can export the row jute in Egypt.

According to the department of commerce and Industry in India, Indian exports to

Egypt have touched $ 423.68 million in 2004 which is up by 15.29% and the imports from

Egypt have reached $ 137.27 million in the same year which is up by 39.77%.

The main exportable items from India were Iron and steel, Jute yarn, Plastic and

rubber, Chemicals and engineering goods.

Currently, the global market is concerned about sustainability issues to cope with the

climate change and global warming. Consumers’ preferences switch to eco-friendly products

and services. This change in consumer orientation synergizes with the ecological advantages

X

of jute products. The benefits of jute-made products are durable, recyclable, termite resistant,

and ultraviolet resistant. These eco-friendly characteristics are key for the future jute market.

These inherent attributes of jute can fulfill the demand of green products. In the ambience of

climate change threats with corresponding demand for green and recyclable products, jute-

made bags, jute handbags, jute home decorative, and footwear and jute coverings provide

sustainability solutions and open new opportunities for the jute market.

Porter’s five force model analysis is purely explain us that India has great opportunity

for exploring the trade of Jute in the Egypt as the Egypt is far behind as compared to India

and thus according to above discussion the Indian Jute Org. can establish the Jute industry in

the Egypt and it can be the greatest opportunity by considering the above five forces into

consideration. As:

1. Threat of New Entrances (Low)

2. Bargaining Power of Buyers (High)

3. Bargaining Power of Suppliers (High)

4. Threat of Substitute Products (High)

5. Rivalry Among Existing Competitors (Low)

We have picked up some Points of SWOT Analysis through this study:-

From the whole report we have picked up some of the strengths & weaknesses for

Egypt to conduct and establish a bounded business relations and to strengthen it for our

country so they are as follows:-

Strengths:

Advancement of jute-fiber technology and bio technology. India also has the national

research center of jute and kenaf.

India is normally the largest producer of jute products.

Business form of joint venture will support the cost reduction in investment in Egypt.

Weaknesses:

Quality certificate for jute products from India may not be accepted in Southeast Asian -

African nations.

Lack of cooperation between jute related organizations and governments in India.

Environmental problems.

Opportunity:

Raising demand of green products in Markets across the world and Egypt.

Market in Egypt means a market for foreigners, because Egypt is one of the most

attractive tourist countries.

Threats:

Market perception is still thinking that jute products are belonged to traditional market,

for example sacks.

XI

Thus from the above SWOT Analysis we can conclude that the India has the

dominating position in the world in the Jute Industry as it is the highest manufacturers and

producers of Jute and Jute Products and so it is the strongest point for us to start the business

with any country and this strength will eat out the other weaknesses and threats and thus,

India has the greatest opportunity to start the business of the Jute in Egypt as it is far behind

from the India.

Thus, Indians can enter into Egyptian Jute Industry by following forms of business:

Sole Proprietorship

Partnership

(1) Unregistered ordinary partnership

(2) A limited partnership

Private Limited Company

Public Limited Company

Regional Offices

Joint Venture

Taking into the consideration the two main trade barriers as:-

(i) Problems of Certification

(ii) Legal Barrier

At last we feel great pleasure to present our study & to conclude it here.

From the Whole Study we can Conclude that:-

In Egypt, the raw materials of home furnishing industry and decorative items are

mulberry paper, water hyacinth, vetiver grass, and screw pine of Egypt. In fact, this is

called value adding to the raw materials. Jute is a kind of crops, which needs the value

adding.

India is the first country who can develop the technology of jute fibers. Traditionally, it

was hard to make the color screen on jute fibers. Also, to dye jute fibers was a

complicated process. But, currently, India has the technology of jute fiber. The fiber

technology of India can soften the jute fabrics. In other words, jute fiber from India can

be smooth, when you touch it, likely to nonwoven fabric.

Jute industry in Egypt has a very little market. Jute will bring a great business

opportunity, if Egyptian people can do a research on this material.

India has good technology in developing jute fiber in to small and delicate fiber unlike

Egyptian jute which is not advance in developing the technology and lack of research

and development.

XII

Joint venture is a future form of business cooperation between Egypt and India. India has

an advancement of fiber technology, while Egypt has a reputation of designers with the

design awards (G-Mark Award) from Japan.

Indian companies and Egyptian companies always focus to sell their products in the

high-end market, such as European market. But, India always presents itself to be the

producer of green products.

The country brand has not been recognized to Egyptian people. It is not famous in Egypt

even though, TATA brand tried to promote brand recognition but it’s still not popular in

Egypt.

The possibility to do the business in Egypt is to provide raw materials to Egypt then

production with Egyptian brand and export to other countries.

India has a lot of Non-Tariff Barrier for example the education tax.

Europe and United State appreciate Egyptian’s products which should be match with

Indian material.

XIII

Table of Content

Sr. No. Content Page No.

1. Executive Summary IV

2. Introduction to Jute & Jute Industry 1

3. Indian Jute Industry : At Glance 10

4. Egyptian Jute Industry : At Glance 14

5. Analytical Study of Egyptian Jute Industry:

Competitive Analysis

PEST Analysis

SWOT Analysis

Market Entry Mode

Trade Barriers

Recommendations From Analysis

26

27

31

33

35

37

38

6. References XIV

List of Graphs & Tables

Sr. No. Content Page No.

1. World Jute Production Table 6

2. Production of Jute in Egypt Table 15

3. Export – Import of Jute & Jute Products in Egypt Tables 16

4. Production of Jute in Egypt Table & Graph 17

5. Consumption of Jute Table 18

6. World Export – Import of Jute Tables 18

7. Domestic Jute Requirement in Egypt Table 28

8. World Jute Production Table 30

1

2

Introduction of Jute:-

Jute is a natural fibre popularly known as the golden fibre. It is one of the cheapest

and the strongest of all natural fibres and considered as fibre of the future. Jute is second only

to cotton in world's production of textile fibres. India, Bangladesh, China and Thailand are

the leading producers of Jute. It is also produced in southwest Asia and Brazil. The jute fibre

is also known as Pat, Kostas, Nalita, Bimli or Mesta (kenaf).

Jute is a natural fibre with golden and silky shine and hence called The Golden

Fibre. It is the cheapest vegetable fibre procured from the bast or skin of the plant's stem and

the second most important vegetable fibre after cotton, in terms of usage, global

consumption, production, and availability. It has high tensile strength, low extensibility, and

ensures better breath ability of fabrics.

Jute fibre is 100% bio-degradable and recyclable and thus environmentally

friendly. It is one of the most versatile natural fibres that have been used in raw materials for

packaging, textiles, non-textile, construction, and agricultural sectors. It helps to make best

quality industrial yarn, fabric, net, and sacks.

Tossa jute (Corchorus olitorius)

Tossa jute is a variety thought to be native to India, and

is also the world's top producer. It is grown for both fibre and

cooking purposes. It is used as an herb in Middle Eastern and

African countries, where the leaves are used as an ingredient in

a mucilaginous potherb called "molokhiya". It is very popular in

some Arab countries such as Egypt, Jordan, and Syria as a

soup-based dish, sometimes with meat over rice or lentils. The Book of Job, in the King

James translation of the Herbrew Bible mentions this vegetable potherb as "Jew's mallow". It

is high in protein, vitamin, beta-carotene, calcium, and iron.

On the other hand, it is used mainly for its fibre in India, in other countries

in Southeast Asia, and the South Pacific. Tossa jute fibre is softer, silkier, and stronger than

white jute. This variety amazingly shows good sustainability in the climate of the Ganges

Delta. Along with white jute, Tossa jute has also been cultivated in the soil of Bengal.

Currently, the Bengal region (West Bengal in India, and Bangladesh) is the largest global

producer of the Tossa jute variety.

History of Jute:

For centuries, jute has been an integral part of the culture of Bengal, in the entire

southwest of Bangladesh and some portions of West Bengal. During the British Raj in the

19th and early 20th centuries, much of the raw jute fibre of Bengal was carried off to

the United Kingdom, where it was then processed in mills concentrated in Dundee. Initially,

due to its texture, it could only be processed by hand until it was discovered in that city that

by treating it with whale oil, it could be treated by machine. The industry reported "jute

3

weaver" was a recognised trade occupation in the 1901 UK census, but this trade had largely

stopped by about 1970 due to the appearance of synthetic fibres.

Margaret Donnelly, a jute mill landowner in Dundee in the 1800s, set up the first jute

mills in Bengal. In the 1950s and 1960s, when nylon and polythene were rarely used, one of

the primary sources of foreign exchange earnings for the Pakistan was the export of jute

products, based on jute grown in the East Bengal, now Bangladesh. Jute has been called the

"Golden Fibre of Bangladesh." However, as the use of polythene and other synthetic

materials as a substitute for jute increasingly captured the market, the jute industry in general

experienced a decline.

During some years in the 1980s, farmers in Bangladesh burnt their jute crops when

an adequate price could not be obtained. Many jute exporters diversified away from jute to

other commodities. Jute-related organisations and government bodies were also forced to

close, change or downsize. The long decline in demand forced the largest jute mill in the

world Adamjee Jute Mills to close in Bangladesh.

Jute has entered many diverse sectors of industry, where natural fibres are slowly

becoming better substitutes. Among these industries are paper, celluloid products (films), non

– woven textiles, composites, and geo textiles. In 2006, the General Assembly of the United

Nations announced 2009 to be the International Year of Natural Fibres, so as to raise the

profile of jute and other natural fibres.

Jute Producing Countries:-

The top ten Jute Producers are: - India, Bangladesh, China, Thailand, Myanmar, Brazil,

Uzbekistan, Nepal, and Vietnam.

Jute Trade:-

The jute trade is centered on the Indian subcontinent. The major producing countries

of jute are: Bangladesh, India, China, Egypt, Thailand, and Myanmar. Bangladesh is the

largest exporter of raw jute, and India is the largest producer as well as largest consumer of

jute products in the world. Therefore, the local price of raw jute in Bangladesh is the

international price. Again, the local price of jute goods in India is the international price.

As an input to the jute manufacturing (goods) industry, the demand for jute is derived

in demand. Nearly 75% of jute goods are used as packaging materials, burlap, and sacks.

Carpet Backing Cloth, the third major jute outlet, is fast growing in importance. Currently, it

consists of roughly 15% of the world's jute goods consumption. The remaining products are

carpet yarn, cordage, felts, padding, twine, ropes, decorative fabrics, and miscellaneous items

for industrial use.

4

Jute has entered the non-woven industry as it is one of the most cost effective high

tensile vegetable fibres. Therefore, the demand for jute has made its way into the automotive

industry. Jute is now being used to manufacture more eco-friendly interiors for cars

and automobiles.

Properties of Jute:-

Jute includes good insulat ing and ant istat ic propert ies, as well as having

low thermal conduct ivity and moderate moisture regain. It includes acoust ic

insulat ing propert ies and manufacture with no skin irritat ions. Jute has the

abilit y to be blended with o ther fibres, both synthet ic and natural, and accepts

cellulosic dye classes such as natural, basic, vat, sulphur, react ive, and pigment

dyes.

Jute can also be blended with wool. By treat ing jute with caust ic soda,

crimp, softness, pliabilit y, and appearance is improved, aiding in its ability to

be spun with wool. Liquid ammonia has a similar effect on jute, as well as the

added characterist ic of improving flame resistance when treated with flame

proofing agents.

Cultivation:

Jute needs a plain alluvial soil and standing water. The appropriate weather in favor

of breeding jute (warm and wet) is accessible through the heavy rain atmosphere, during the

monsoon season. Temperatures from 20˚C to 40˚C and virtual humidity of 70%–80% are

encouraging for victorious cultivation. Jute needs 5–8 cm of rainfall weekly, and added

throughout the sowing period.

Production:

Jute is a rain-fed crop with little need for fertilizer or pesticides, in contrast to cotton's

heavy requirements. Production is concentrated in India and some in mainly Bengal. The jute

fibre arrives as of the stem and ribbon (outer skin) of the jute plant. The fibres are first

removed by retting. The retting process consists of bundling jute stems together and

immersing them in slow running water. There are two types of retting: stem and ribbon. After

the retting process, stripping begins; women and children usually do this job. In the stripping

process, non-fibrous matter is scraped off, and then the workers mine in and grab the fibres

from within the jute stem. India, Pakistan, and China are the large buyers of local jute while

the UK, Spain, Germany and Brazil also import raw jute from Bangladesh. India is the

world's largest jute growing country. The following table shows the data of Jute Production in

the word latest by the year 2012:-

5

The Jute Production Process Chart:

6

Table: - World Jute Production Data:-

Country Production (Tonnes)

Bangladesh 1,743,000

India 1,200,600

People's Republic of China 40,000

Myanmar 30,000

Uzbekistan 20,000

Nepal 16,988

Vietnam 8,800

Thailand 5,000

Sudan 3,300

Egypt 2,200

World 2833041

Source: CIA data & Wiki

Uses of Jute:

Jute is the second most important vegetable fibre after cotton. Jute is used mainly to

make cloth for wrapping bales of raw cotton, and to make packs and rude cloth. The fibres

are also woven into curtains, chair coverings, Carpets, area

mats, canvas clothes, and backing for linoleum.

While jute is being replaced by synthetic materials in many of

these uses, some uses take advantage of jute's eco-friendly nature,

where synthetics would be unsuitable. Examples of such uses include

containers for planting young trees, which can be planted directly

with the container without disturbing the roots, and land restoration where jute cloth prevents

erosion occurring while natural vegetation becomes established.

The fibres are used alone or blended with other types of fibre to make string and

rope. Jute rope has long been popular in Japan for use in burden. Jute strikes, the rude ends of

the plants, are used to make inexpensive cloth. Conversely, very fine threads of jute can be

separated out and made into imitation silk. As jute fibres are also being used to make pulp

and paper, and with increasing concern over forest destruction for the wood pulp used to

make most paper, the importance of jute for this purpose may increase. Jute has a long history

of use in the sackings, carpets, wrapping fabrics (cotton bale), and construction fabric

manufacturing industry.

Traditionally jute was used in traditional textile machineries as textile fibres having

cellulose and wood fibre content. But, the major breakthrough came when the automobile,

pulp and paper, and the furniture and bedding industries started to use jute and its allied fibres

with their non-woven and composite technology to manufacture nonwovens, technical

textiles, and multiples. Therefore, jute has changed its textile fibre outlook and steadily

heading towards its newer identity, i.e., wood fibre. As a textile fibre, jute has reached its

7

peak from where there is no hope of progress, but as a wood fibre jute has many promising

features.

Jute is used in the manufacture of a number of fabrics such as hessian clothes,

sacking, scrim, carpet backing cloth (CBC), and canvas. Hessian, lighter than sacking, is used

for bags, wrappers, wall-coverings, upholstery, and home furnishings. Sacking, a fabric made

of heavy jute fibres, has its use in the name. CBC made of jute comes in two types. Primary

CBC provides a tufting surface, while secondary CBC is bonded against the primary backing

for an overlay. Jute packaging is used as an eco-friendly substitute.

Diversified jute products are becoming more and more valuable to the consumer

today. Among these are espadrilles, soft sweaters and cardigans, floor coverings, home

textiles, high performance technical textiles, Geo textiles, composites, and more.

Jute floor coverings consist of woven and tufted and piled carpets. Jute Mats and

matting with 5 / 6 mts width and of continuous length are easily being woven in Southern

parts of India, in solid and fancy shades, and in different weaves like, Boucle, Panama,

Herringbone, etc. Jute Mats & Rugs are made both through Power loom & Handloom, in

large volume from Kerala, India. The traditional Satranji mat is becoming very popular in

home decor. Jute non-woven and composites can be used for underlay, linoleum substrate,

and more.

Jute has many advantages as a home textile, either replacing cotton or blending with

it. It is a strong, durable, color and light-fast fibre. Its UV protection, sound and heat

insulation, low thermal conduction and anti-static properties make it a wise choice in home

decor. Also, fabrics made of jute fibres are carbon-dioxide neutral and naturally

decomposable. These properties are also why jute can be used in high performance technical

textiles.

Moreover, jute can be grown in 4-6 months with a huge amount of cellulose being

produced from the jute hurd (inner woody core or parenchyma of the jute stem) that can meet

most of the wood needs of the world. Jute is the major crop among others that is able to

protect deforestation by industrialisation.

Thus, jute is the most environment-friendly fibre starting from the seed to expired

fibre, as the expired fibres can be recycled more than once. Jute is also used to make ghillie

suits, which are used as mask and look like grasses or brush.

Another diversified jute product is Geo textiles, which made this agricultural

commodity more popular in the agricultural sector. It is a lightly woven fabric made from

natural fibres that is used for soil erosion control, seed protection, weed control, and many

other agricultural and landscaping uses. The Geo textiles can be used more than a year and

the bio-degradable jute Geo textile left to rot on the ground keeps the ground cool and is able

to make the land more fertile. Methods such as this could be used to transfer the fertility of

the Ganges Delta to the deserts of Sahara or Australia.

Other Uses of Jute:-

Jute tails are being dried under the sun, later they will be used as fuel. Diversified

byproducts from jute can be used in cosmetics, medicine, paints, and other products

8

Description of Jute Goods:-

Hessian:

A plain weave cloth made wholly of jute with single warp and weft interwoven

weighing not more the 17 oz per sq.yd. & with the no of warp and weft threads added

together not more than 33 per sq. inch. The selvedge may contain cotton yarn and/or

yarn made out of manmade fiber.

CBC:

A woven cloth made wholly of jute not less than 104" wide, weighing not less

than 5 oz per sq. yd. with the no. of warp and weft threads added together not less

than 20/inch.sq.

Sacking:

Either plain or twill weave cloth finished completely of jute twofold bend and

single weft, or vice- versa, intertwine, pondering not fewer than 12 oz/sq.yd. and with no.

of bend threads not further 30/inch and no. of weft threads less than 10/inch.

Tarpaulin:

A plain weave fabric prepared totally of jute with double warp and single weft

inter-woven, weighing not more than 18 oz per sq.yd. &, with the no. of warp threads not

less than 30 per inch and the no. of weft threads not less than 10 but not more than

14/inch.

Canvas:

A plain weave cloth made wholly of jute with double warp & single weft inter-

woven weighing not less than 12 oz/sq.yd. and with the no. of warp threads more than

30/inch & no. of weft threads not less than 14/inch.

Ordy. Yam:

Yarn made wholly of jute having oil content of more than 2% and of count more

than 6 lbs.

Special Yarn:

Yarn made wholly of jute having an oil content not more than 2% & count not

more than 6 lbs.

Twine:

Two or more yarns made wholly of jute ordy. yarn or Spl. yarn or specialty yarn

twisted together.

Webbing:

A narrow weave fabric made wholly of jute using single or plied jute yarn

having width of not more than 6".

Cotton Bagging Soil Saver:

Plain weave jute netting made of jute yarn as warp and jute rove as weft or jute

rove as warp and jute yarn as weft or jute rove both as warp and weft. May be of single or

double warp constructions.

9

Features:

The following is the Picture of cutting lower part of the long jute fibre, the lower part

is hard fibre, which is called jute cuttings in Bangladesh and India (commonly called jute

butts or jute tops elsewhere). Jute cuttings are lower in quality, but have commercial value for

the paper, carded yarn, and other fibre processing industries. Jute fibres are kept in bundles in

the background in a warehouse in Bangladesh.

Jute fibre is 100% bio-degradable and recyclable and thus

environmentally friendly.

Jute has low pesticide and fertilizer needs.

It is a natural fibre with golden and silky shine and hence

called The Golden Fibre.

It is the cheapest vegetable fibre procured from the bast or

skin of the plant's stem.

It is the second most important vegetable fibre after cotton,

in terms of usage, global consumption, production, and

availability.

It has high tensile strength, low extensibility, and ensures

better breathability of fabrics. Therefore, jute is very suitable in agricultural commodity bulk

packaging.

It helps to make best quality industrial yarn, fabric, net, and sacks. It is one of the most

versatile natural fibres that have been used in raw materials for packaging, textiles, non-

textile, construction, and agricultural sectors. Bulking of yarn results in a reduced breaking

firmness and an increased breaking extensibility when blended as a ternary blend.

The best source of jute in the world is the Bengal Delta Plain in the Ganges Delta, most of

which is occupied by Bangladesh.

Advantages of jute include good insulating and antistatic properties, as well as having

low thermal conductivity and a moderate moisture regain. Other advantages of jute

include acoustic insulating properties and manufacture with no skin irritations.

Jute has the ability to be blended with other fibres, both synthetic and natural, and accepts

cellulosic dye classes such as natural, basic, vat, sulfured, reactive, and pigment dyes. As the

demand for natural comfort fibres increases, the demand for jute and other natural fibres that

can be blended with cotton will increase. The resulting jute/cotton yarns will produce fabrics

with a reduced cost of wet processing treatments. Jute can also be blended with wool. By

treating jute with caustic soda, crimp, softness, flexibility, and appearance is improved,

aiding in its ability to be spun with wool. Liquid ammonia has a similar effect on jute, as well

as the added characteristic of improving flame resistance when treated with flame

proofing agents.

Some noted disadvantages include poor drapability and wrinkle resistance, brittleness, fibre

shedding, and yellowing in sunlight. Jute has a decreased strength when wet, and also

becomes subject to microbial attack in humid climates.

10

11

Indian Jute Industry:

The following table gives brief overview about the Indian Jute Industry.

Source: Indian Mirror

History of Indian Jute Industry:

The Jute industry occupies significant place in the Indian economy. The Indian Jute

Industry is a very old & predominant in the eastern part of India. The Government of India

has included the Jute Industry for special attention in its National Common Minimum

Programme. It forms an integral part of the Indian Textile Industry. Further, the

Jute industry contributes to the national exchequer from exports & taxes.

From 17th

to 20th century, the jute industry in India was delegated by the

British East India Company which was the first jute trader. During 20th century.

The Indian Jute industry has been expanding really fast spanning from a wide range of life

style consumer products, with courtesy to the versatility of Jute. Innovative ways of

bleaching, dyeing and finished goods processes - the jute industry now provides finished jute

products that are softer, have a lustre with aesthetic appeal. Today Jute has been defined as

eco-friendly natural fiber with utmost versatility ranging from low value geo-textiles to high

value carpets, decoratives, apparels, composites, upholstery furnishings, etc.

The Indian Jute Industry plays a key role in the Indian economy, providing direct

employment to about 0.26 million workers, and supporting the lives of around 4.0 million

farm families. Around 0.14 million people are engaged in the tertiary sector, that supports the

jute industry. Currently it contributes to exports about

Rs. 1000 crore.

Size of Indian Jute Industry:-

The India Jute Industry constitutes total mills

from central government which owns 6 jute mills, the

state government owns 4.2 are under cooperatives, and

64 jute milss are under private ownerships. India today

has around 78 jute mills and the state of West Bengal alone has around 61 jute mills. Andhra

Pradesh has 7 jute mills, 3 Uttar Pradesh abd Bihar, Odisha, Assam, Tripura, and Madhya

Pradesh has 1 jute mills each.

Size of the Industry

India today has around 78 jute mills

Geographical distribution

Jute mills are located in West Bengal, Andhra Pradesh, Assam, Odisha, Uttar Pradesh, Bihar, Tripura and Chhattisgarh

Output per annum

The Indian Jute Industry today accounts for a turnover of Rs 6,500 crore annually, contributing to exports to the tune of nearly Rs.1000 crore.

12

Leading Jute Companies:-

National Centre for Jute Diversification, Kolkata.

Jute Manufacturers Development Council, Kolkata.

National Jute Manufacturers Corporation.

Jute Corporation of India Ltd., Kolkata.

Birds Jute & Exports Ltd.

Institute of Jute Technology, Kolkata.

Indian Jute Industries Research Association, Kolkata.

Lovson Exports.

Jaikishan Dass Mall Jute Products (P) Ltd.

Eco Jute Pvt. Ltd.

Boom Buying Pvt. Ltd.

Anad Jute Industries.

Empolyment Opportunities:-

Providing direct empolyment to about 0.26 million workers and around 4.0 million

workers indirectly.

Latest Development in India:-

The Govt. of India have commenced the “Jute Technology Mission” charge in view

the mounting 7involvement of the Jute industry to Indian Economy. This will benefit jute

producers, the workers engaged in the production, jute entrepreneurs and others employed in

related activities. It will also play a vital role in modernising the jute industry and help the

country to reap the benefits with enhanced levels of jute diversification.

For greater growth and development of the Jute Industry, Govt. of India launched

National Jute policy in 2005 with the following objectives:-

Achieving a Compound Annual Growth Rate (CAGR) of 16% p.a.

Improving the quality of jute fibre.

Value addition through diversified products.

Ensuring remuneration prices to the jute farmers.

To enhance the yield per hectare from 2200kg/hec. to 2700kg/hec. in 2010 – 11.

Indian Jute Industry at Glance in Year 2011 – 12:-

Jute production in the country is expected to decline by 12% to 90 lakh bales in the

2012-13 crop year due to poor rains in the growing states,

according to the National Jute Board of India. The

country had produced 102 lakh bales of jute last year. As

per the Agriculture Ministry data, area sown under jute is

lower at 8.40 lakh hectare so far in the ongoing Kharif

season, against 8.92 lakh hectare in the year-ago period.

Jute is cultivated in seven states" West Bengal, Bihar,

Odisha, Assam, Tripura, Meghalaya and Andhra

Pradesh.In fact sowing of most kharif crops, both food and cash crops, are lagging behind due

to poor rains. Monsoon rains were deficient by 20 per cent till July this year.

13

Jute is normally cultivated as an inter-crop between the two main agricultural seasons,

kharif and rabi in India. About 5-6% of the total production is used for making 1.6 million

tonnes of jute goods every year. Farmers use the remaining fibre for manure and fuel. The

jute industry, which employs about 4 million people directly and indirectly, has been mainly

focusing on making gunny bags.

14

15

Jute Products and Home-Furnishing situation in Egypt

Market Overview:-

Jute-made products are not popular in Egypt. That is mainly due to production

processes in Egypt that cannot produce the soft and smooth jute fabric necessary for furniture

or home furnishings. Currently, rice sacks are the only jute-made products in Egypt. In other

words, the market of jute products in Egypt is still traditional or classical market. In fact, jute

and kenaf are one of the economic plants, which are grown in the central region of Egypt.

In contrast to the lack of market development on jute products in Egypt, the strength

of Egyptian handicraft market is the design. Therefore, it may be a great opportunity for

Egyptian companies to access the technology necessary to process the jute fibers in order to

produce quality home-furnishing products, or handicrafts.

But, still, the opportunity in jute industry is the trend of green products is emerged in

everywhere across this world, including Egypt. Therefore, the jute-made products still have a

bright future in Egyptian market, but the advanced development of jute market is needed.

Production:-

Jute has excellent prospects to produce Egyptian handicrafts by as stand-alone

products or blended with other raw materials to add the value and variety leading to product

differentiation. In the context of Egypt, there is a lack of jute availability in Egypt. This

creates the opportunity to import from other countries.

There are three types of factory relevant to Handicrafts/Jute Products and Home

Furnishings:

Type 1: The factory that has total machine power ranging between 5 –

20 HP (horse power) and/or has workers numbering 7 - 20 workers. They can be

tooled up to commence operations immediately. They comply with the government

regulations. If the factory causes pollution, it is classified into Type 3.

Type 2: The factory that has total machine capacity of 20 - 50 HP and/or has the

number of workers between 20 - 50. They too can be operational immediately. If the factory

causes pollution, it is classified into Type 3.

Type 3: In case the factory has potential to cause pollution and have machines over 50

HP and/or employs more than 50 workers, they must seek permission from authorities to

operate the business.

Production of jute in Egypt:

Year MT 2007 1915 2008 1656 2009 1665 2010 2200

16

Jute Industry

About 97 percent of the Jute produce in Egypt are for agricultural sector usage. Of

this, 40 percent go for jute bags and 60 percent for jute products such as ropes, thread, and

burlap.

The trend of the production of jute bags for use in Egypt is decreasing. These are

substituted by plastics and related innovations.

In Egypt, most plantations of Jute areas are located in the North East provinces of the

country such as Cairo, Suez, Alexandria, Luxor, etc. They cover approximately 25,000

hectares during the period of 1988 – 1990 with a production of 5000 tons. The plantation area

during 1998 – 2000 decreased to 23,157 hectares and projected to be 10,000 hectares. This

amounts to a decrease 20.2 and 6.7 percent with production of 2200 and 1500 tons

respectively. This decrease in plantation area and production is expected to result from the

declining global demand for jute fiber due to the substitute goods such as artificial plastic

bags over and above deteriorating price incentives.

Consumption:-

According to a portfolio from Bangladesh Jute Mills Corporation (2007), it appears

that jute fibers can be processed in order to produce hand bags, shopping bags, jewelry box,

mats, canvas, floor covering, scrim cloth, carpet, tapestries, and wall covering. Jute-made

products are restricted to sacks for packaging rice, maize, sugar, tapioca and related

agricultural produce. Therefore, the jute industry is still a traditional market with niche

market potential.

Substitute for jute bags, such as polypropylene bags or synthetic bags are mainly

causing the decline of jute-made products in Egypt. Such substitutes are widely used in

agricultural sectors, particularly as a packaging bag for rice. In Egypt, rice wrapped by

polypropylene bag can be sold cheaper than rice wrapped by hessian bags.

In comparison to the other countries, the jute production in Egypt is declining. Thus,

consumption of jute products in Egypt declined from 8000 tons in 1980s to 3500 tons in

1990s. This caused the decline of prices of jute-made products in Egypt. Table below

indicates this declining trend of consumption of jute products and the resultant decline of the

export price of jute products from Egypt.

Export of Products of Jute, Kenaf and Allied Fibres from Egypt:

(Thousand tones)

2008 1.6 2009 2.0 2010 0.1

Import of Raw Jute, Kenaf and Allied fibres

(Thousand tones)

2008 0.8 2009 0.4 2010 0.2

17

Import of products of Jute, Kenaf and Allied fibres

(Thousand tones)

2008 19.5 2009 8.7 2010 21.8

Production Quantity of Jute in Egypt - 1961-2009:-

The table and graph data comes from the FAOSTAT database produced by the Food

and Agriculture Organization of the United Nations (FAO). The data is displayed with the

express written permission of UN/FAO and was downloaded from FAOSTAT on

07/17/2011.

Table:

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009

Amount 2,589 2,134 1,992 2,516 2,309 1,978 1,915 1,656 1,665

Chart:

Source: www.factfish.com

18

Table: Consumption of Jute Products

Actual (Tonnes) Growth Rate (%)

1988 -1990

(Average)

1998 – 2000

(Average)

1988-90 to

1998-2000

1998-2000

to

2010

Developed

Countries 668,000 395,000 -5.2 -1.8

United States 108,000 72,000 -4.4 -4.3

European Union

(15 Nations)

224,000 178,000 -3.6 -1.6

Developing

Countries

2,786,000 2,499,000 -0.8 -1

Bangladesh 131,000 152,000 1.9 1

China 537,000,000 218,000 -10.9 -12.7

India 1,341,000 1,602 2.7 -0.5

Pakistan 121,000 85,000 -2.5 -2.2

Egypt 80,000 35,000 -12.1 -2.5

Source: http://www.fao.org/docrep/006/y5143e/y5143e1h.htm

19

Table: World Export of Product of Jute, Kenaf and Allied Fibres from 2005 to 2009

In ‘000 tons (1 tons = 1000 Kg)

2005 2006 2007 2008 2009

World 800.3 774.1 832.7 773 767.7

Developing 740.8 729.3 787.4 747.6 744.3

Africa 2.6 3 3 3 3

Latin America 0.5 0.5 0.5 0.5 1.1

Near East 7.7 5.3 6.5 11.7 10.1

Egypt 0 0 0 0.2 0.1

Saudi Arabia 1 0.4 0.2 0.2 0.2

Syria 0.1 0.1 0.1 5.9 5

Turkey 6.4 4.3 5.7 5.1 4.4

Far East 729.9 720.5 777.4 732.4 730.1

Bangladesh 476 478.9 549.7 491.5 508.7

China 7.6 18.5 21.1 12.6 16.8

India 208.1 189.5 175.6 207.6 135

Nepal 13 13 13 13 17.4

Pakistan 18.9 17.1 15.1 6.1 10

Thailand 6.3 3.4 2.8 1.5 0.9

Developed 59.5 44.8 45.3 25.4 23.4

North America 1.8 1.2 2 2.1 3.6

USA 1.6 1.2 1.9 1.8 3.4

Europe 55.6 42.2 41.4 21.1 17.6

Belgium-Lux 27.2 19.6 22.2 11.1 10.3

France 1.3 0.5 0.5 0.2 0.3

Germany 6 6.4 4.9 3.7 1.9

Netherlands 5.6 4.3 4.1 2 1

UK 6.6 4.3 3 1.7 1.4

Other EU 2.4 1 0.8 0.6 0.5

Former USSR 0.2 0.2 0.7 1.1 1

Oceania 0.2 0.2 0.1 0.1 0.1

Australia 0.2 0.2 0.1 0.1 0.1

Other Developed 1.8 1 1 0.5 0.5

Japan 1.8 1 1 0.5 0.5

Source: http://www.jute.org

Globally, exports of jute kenaf and allied fibers product, declined by a small margin

during year 2005 to 2009 by about 4.07 percent, that is it reduced from 800.3 thousand tons

to 767.7 thousand tons. In the case of Egypt, exports of jute kenaf and allied fiber products

declined by 85.71 percent. Thus, form the above table we can conclude that India has the

great opportunity to expand the business of Jute specially in Egypt as the Egypt is far so far

behind in this context.

20

Table: Export of Jute Products by type from Egypt

In ‘000 tons (1 tons = 1000 Kg)

Year Yarn & Twine Manufactures

Fabrics Gunny Bags Total

2003-2004 3.19 0.18 1.79 7.03

2002-2003 3.95 0.32 1.69 8.26

2001-2002 2.96 0.23 1.93 7.33

2000-2001 3.86 0.17 2.77 7.46

1999-2000 5.67 0.32 2.23 8.22

1998-1999 5.06 0.57 3.3 8.9

1997-1998 6.21 0.41 3.19 9.81

1996-1997 8.57 0.64 2.52 11.73

1995-1996 20.64 1 3.06 24.7

1994-1995 37.55 1.56 4.6 44.24

1993-1994 51.04 0.91 2.84 54.79

1992-1993 47.77 1.39 6.11 55.27

1991-1992 59.51 0.91 8.58 69

Source: http://www.jute.org

Table shows the type of jute products of Egypt that export to other countries. Yarn

and Twine products steadily decreased from 59.51 thousand tons to 3.19 thousand tons

during the period 1991 to 2004. For fabrics, export volume remained unchanged from 0.91

thousand tons to 0.18 thousand tons from 1991 to 2004 respectively. The peak export volume

was in 1994-1995 with 1.56 thousand tons. For gunny bags, the export volumes dropped from

8.58 thousand tons to 1.79 thousand tons from 1991 to 2004. Thus, from the above table we

can say that the exports of the Jute products is at the decreasing rate so as the production of

the jute is at the bottom in Egypt so, as the opportunity point of view India can export row

jute in Egypt and can also start business by establishing the joint ventures in Egypt.

21

Table: World Import of raw Jute, Kenaf and Allied Fibres from 2001 to 2011

In „000 tonnes (1 tonne = 1000 Kg)

Source: Food and Agriculture Organization (FAO)

Year => 2003 2004 2005 2006 2007 2008 2009 2010 2011

World 385.5 331.3 351.8 355.1 508.3 436.1 376.8 477.1 471.3

Developing 357.1 306.7 328.5 335.5 473.0 395.0 354.7 456.4 446.9

Africa 22.6 13.4 24.5 17.7 13.0 20.2 14.5 22.3 13.1

Cote d'Ivoire 15.2 6.9 12.9 12 7.5 12.7 6.7 17.6 2.3

Ethiopia 5.4 5.0 10.0 3.8 3.0 5.6 3.7 3.5 4.6

Latin America 17.8 5.9 4.2 6.3 4.0 20.0 5.7 15.3 13.9

Brazil 13.8 1.9 0.2 2.1 0.2 15.9 1.8 10.9 8.3

Near East 4.7 5 4.7 3.9 3.5 3.9 3.0 2.9 2.7

Egypt 1 1.7 1.5 1.6 0.3 0.8 0.4 0.2 0.3

Iran 1.8 1.3 1.0 1.0 1.1 1.0 1.0 1.0 0.1

Saudi Arabia 1.8 1.9 1.9 0.8 1.0 0.9 1.1 1.0 2.0

Far East 312 282.4 295.2 307.6 452.6 350.9 331.5 415.9 417.2

China 34.3 65.1 82.2 88.6 125.7 114.2 95.7 104.1 109.6

India 144.2 62.3 66.8 79.8 162.5 70.5 56.6 145.5 128.8

Indonesia 2.2 2.4 2.2 2.2 2.6 5.5 2.2 0.5 2.1

Pakistan 89.2 129.4 128.5 111.8 126.5 128.8 128.6 98.5 106.0

Thailand 36.7 17.6 6.3 15.6 23.3 8.2 15.8 0.9 3.9

Developed 28.4 24.5 23.3 19.6 35.3 41.1 22.1 20.7 24.4

North America 0.4 1 2.6 1.6 3.7 3.7 1.8 2.7 2.2

United States 0.3 0.9 2.5 1.6 3.6 3.5 1.7 2.4 2.2

Europe 19.1 16.6 14.4 12.4 20.1 22.6 15.3 13.9 15.2

UK 2.8 0.3 1.8 2.0 5.4 11.2 4.5 1.9 2.6

Other EU 1 0.8 4.4 4.1 6.1 5.4 5.7 5.4 5.3

Other Europe 1.5 1.5 1.6 1.6 1.7 1.7 1.3 1.3 1.4

Former USSR 5.6 4.2 3.4 3.2 9.0 11.7 2.6 2.8 5.4

Oceania 2.1 1.5 2.3 1.5 1.5 1.4 1.5 0.8 0.8

Australia 2.1 1.5 2.3 1.5 1.5 1.4 1.5 0.8 0.8

Other Developed 1.2 1.3 0.7 0.9 1.0 1.7 0.9 0.5 0.8

22

Table: World Import of Products of Jute, Kenaf and Allied Fibres from 2003-2011

In „000 tonnes (1 tonne = 1000 Kg)

Year => 2003 2004 2005 2006 2007 2008 2009 2010 2011

World 608.7 587.6 596.6 617.5 615.1 619.9 502.6 601.3 663.2

Developing 313.1 310.5 321.8 370.4 372.0 386.2 336.9 416.3 489.4

Africa 34.5 44.2 36.4 57.0 56.7 48.2 44.9 45.0 71.5

Algeria 5.4 8.7 5.7 5.1 7.2 5.9 5.8 7.7 8.6

Cameroon 2.4 2.3 1.6 1.6 2.3 1.4 1.9 2.0 2.0

Ghana 10.3 14.6 4.7 19.8 14.2 12.8 12.0 6.9 24.3

Kenya 3.5 2.9 2.6 4.8 4.3 2.7 5.1 3.0 3.5

Latin America 10.5 9.2 12.9 15.4 16.8 17.0 10.4 12.3 18.7

Argentina 2.5 2.6 2.8 2.8 3.2 1.5 1.2 1.2 1.2

Brazil 2 2.4 2.7 3.9 4.1 5.6 3.1 4.1 9.9

Near East 248.1 235.8 248.5 270.5 267.8 278.6 245.0 301.3 299.3

Egypt 4 3.8 5.5 5.4 4.6 19.5 8.8 21.8 15.8

Iran 63.1 68.2 75.1 59.1 74.0 57.5 56.4 66.1 61.5

Saudi Arabia 15.2 16.5 18.7 18.9 19.3 16.0 4.8 16.4 17.0

Sudan 3.7 3.9 3.0 3.2 2.1 1.0 1.0 1.0 1.0

Syria 80 30.8 42.3 53.7 39.7 33.4 32.0 32.3 34.0

Turkey 78.1 108.5 101.2 127.9 125.1 148.3 136.9 160.0 165.0

Far East 20 21.3 24.0 27.5 30.7 42.4 36.6 57.7 99.9

China 4.3 3.5 4.0 4.5 4.7 5.4 7.9 14.3 54.3

Indonesia 4.5 6 7.1 8.8 11.1 13.0 10.7 23.0 22.6

Malaysia 1.1 1.7 1.4 1.8 2.0 2.7 3.7 1.6 1.6

Pakistan 0.2 0.2 0.2 0.4 1.7 8.2 4.2 9.4 1.3

Sri Lanka 2.3 2.2 3.2 2.5 2.9 2.6 2.5 3.0 2.4

Thailand 0.9 1.7 0.4 0.6 0.5 2.9 1.0 0.5 10.7

Developed 295.6 277.1 274.8 247.1 243.0 233.7 165.7 185.0 173.8

North America 56.7 60.1 59.3 50.0 46.9 40.8 28.4 33.8 35.1

United States 51.9 55.4 54.7 46.5 42.4 37.2 25.1 30.9 31.6

Europe 175.6 155.2 150.9 136.5 133.4 128.9 86.2 99.9 89.6

EU(27) 173.9 154.3 149.2 134.4 131.3 126.8 84.7 98.2 88.0

EU(15) 168.9 149.9

United Kingdom 26.2 23.1 17.3 15.2 13.7 10.2 7.4 8.4 7.4

Other EU 5 4.4 1.7 2.1 2.1 2.1 1.5 1.7 1.6

Former USSR 5.6 8.3 7.7 12.9 17.4 19.3 12.8 15.2 15.0

Russian Federation 4.1 5.9 6.3 10.8 15.0 17.4 10.5 12.7 15.0

Oceania 34.4 31.1 35.9 28.6 27.8 27.3 21.8 20.6 23.9

Australia 28 25.4 28.7 23.7 24.0 23.3 18.6 17.4 20.3

Other Developed 23.3 22.4 21.1 19.1 17.6 17.3 16.5 15.6 10.3

Japan 19.1 17.8 17.3 14.5 13.6 14.3 14.2 13 8.0

South Africa 4.2 4.6 3.7 3.5 3.3 2.3 1.7 1.9 1.9

Source: Food and Agriculture Organization (FAO)

23

Jute Industries and Traders:

1. NORTH AMERICA TRADE AND IMPORTS

Contact Person: MR. Mohamed Elkazaz

Product: Jute & jute product

24 Elharbey Street-Damietta

Zip: 34724

Country: Egypt.

2. El-Deek

Buyer of: jute yarn, hessian cloth, wood.

Contact Person: Essam Ghena

Location: Egypt – Dumyat.

3. Alex group int

Contact Person: Mr. said f.

Product/Service: Flax Fiber, Charcoal, Raw Wool, Scotched Flax: Hackled Flax: short

flax fiber.

Address: 1 / F el Nasser, 13 el Nasser Road, el anshia, Alexandria, Egypt.

Telephone: 20-012-3845075.

Fax: 20-03-4835097.

4. Egyptian flax company

Product/Service: Flax products: Flax fiber, flax woo, flax sliver and flax yarn.

Contact Person: Mr. Hossam Ali.

Zip Code: 02

Website: http://www.gmdu.net/corp-7389.html

Address: 3 Makram Abid Street - Office 901, Cairo, Egypt.

Telephone: 20-02-6711125.

Fax: 20-02-6711128.

24

Govt. Department/Ministry Dealing with Jute:

Ministry of Trade and Industry Arab Republic of Egypt.

2 Latin America, Garden City, Cairo.

E-Mail: Inquiry@mti.gov.eg

Telephone: +202-27921178.

Fax: +202-27957487.

Ministry of Foreign Affairs, Egypt

Tel: 25796334 - 25746872 - 25746871 - 25796338 – 25796342.

Foreigners and Legalization Affairs: foreign.legalization@mfa.gov.eg

Fax: 25767967.

Web: ww.mfa.gov.eg

Ministry of Foreign Trade and Industry, Egypt

Web: www.mfti.gov.eg

Ministry of Environment - Environmental Affairs Agency, Egypt

Web: www.eeaa.gov.eg

25

Trends and Developments:-

Currently, the global market is concerned about sustainability issues to cope with the

climate change and global warming. Consumers‟ preferences switch to eco-friendly products

and services. This change in consumer orientation synergizes with the ecological advantages

of jute products. The benefits of jute-made products are durable, recyclable, termite resistant,

and ultraviolet resistant. These eco-friendly characteristics are key for the future jute market.

These inherent attributes of jute can fulfill the demand of green products. In the ambience of

climate change threats with corresponding demand for green and recyclable products, jute-

made bags, jute handbags, jute home decorative, and footwear and jute coverings provide

sustainability solutions and open new opportunities for the jute market.

In terms of development, three main strategic tracks need to be applied into jute

processes. These are textile technology, agribusiness management and designing. Textile

technology will improve the fiber quality of jute to be softer for industrial processes, while

the designing will improve the marketing strategy of jute products. This is relevant as the

Egyptian jute market is currently a traditional market. Therefore, if the jute-made products

are entering to the Egyptian market, it will need the sustainable marketing strategies to

reshape the perception of Egyptian consumers.

Besides technology and designing, agribusiness management is important to the jute

farmers. The research related agribusiness management will support farmers to learn about

the cost reduction of jute farming, the efficient productivity and the increase of fiber yield. If

jute farmers learn how to make profits from efficient farming, the price of jute will be more

reasonable. Thus, this market will have a sustainable future.

In short, the Egyptian is the traditional jute industry as they are no using more

technology for the jute so, India can introduce the latest technology and developmental ways

to increase and develop the jute industry in the Egypt.

26

27

Competitive Analysis

Five Forces Analysis:-

The following is the figure showing the Porter‟s five forces model, which we have

analysed in detail below for Indo – Egyptian trade relation in the Jute Industry.

Now we will use the some table and data for the detailed study of the five forces of

Porters for the Jute Industry of Egypt and to develop and find the opportunity to enhance the

business relationship between India and Egypt especially for the Jute so, the whole study and

the analysis is detailed in the next context.

28

Table: Jute/Kenaf Estimated Supplies, Domestic Requirements, Exports and Imports in

Major Producing Countries in ‘000 tons (1 ton = 1000 Kg)

Egypt 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010

Opening Stocks 268.8 270.4 266.3 206.5 182.7 152.7

Production 35.7 36 36 2.2 2.9 1.8

Imports 15 5 12 18 11 17.5

Total Supply 319.5 311.4 314.3 226.7 196.7 171.9

Mill

Consumption 44 44 44 44 44 44

Village

Consumption 0 0 0 0 0 0

Loss/Damage 0 0 0 0 0 0

Closing Stocks 274.4 266.3 269.3 182.7 152.7 127.9

Total Domestic

Requirements 318.4 310.3 313.3 226.7 196.7 171.9

Exports 1 1.1 1.1 0 0 0

Source: www.jute.org

1. Threat of New Entrances (Low):

The investment environment is enabling and there are hardly any barriers for new

comers. Characteristically the quantum of investment in jute products is not too high and the

profitability is low. There is space for new entrants to the business. The key barrier in this

business is with respect to the labor. It is rather difficult to find and maintain productive

skilled labor. Furthermore, raw jute is insufficient for the intended scale of production in

Egypt as the growers switch to grow other crops.

Even though, it is not difficult to conduct the business in jute products but it‟s also not

easy to run the business smoothly due to the overall decline of the market. Moreover, the

production in Egypt is for domestic consumption only and not for export to other countries

since 2007 onwards.

2. Bargaining Power of Buyers (High):

The buyers‟ power is collectively significant. Mostly the price of jute is set depending

on the demand. As the consumption rate of jute products in Egypt has progressively declined

along with the influx of substitute products in the market therefore, the buyers have limited

ability to maneuver with the price charged to the customers. There is no switching cost to

consumers for changing their consumption behavior to consume more in substitute products

such as plastic. Therefore, the bargaining power of buyers is high.

29

3. Bargaining Power of Suppliers (High):

The bargaining power of suppliers in term of middlemen is high because mostly

suppliers of raw jute are middlemen. They play a major role of being a link between the

grower and the manufacturing mills. In addition to purchasing and selling the raw jute, these

middlemen often perform such essential functions as assembling and storing the crop,

conveying it to the inferior market, and financing the various transactions.

The bargaining power of suppliers in term of growers/farmers of jute raw is low in

comparison to the manufacturing mills but high with respect to the middlemen. This is due to

the fact that they can switch to other crops which give them more productivity substituting

jute at no switching cost. It might result in a drop in productivity if the growers/farmers

turned to other alternative crops.

4. Threat of Substitute Products (High):

The threat of substitute products is high because there are numerous substitute

products such as synthetic plastic, nylon, and other manmade fibers. They have preference

due to the durability and lower cost. For example for jute bags, the substitute products are

plastic bags, leather bags, and cloth bags. Amongst them plastic is cheaper and more

economical. The latter two are more durable even though the cost is high. In case of

packaging products, the substitute products are boxes, and aluminum which is more

waterproof suits grain product better than jute.

5. Rivalry Among Existing Competitors (Low):

The competition in domestic is low because there is little competition in Egypt. There

are only three key players in jute mill industry which are as follow:

El Deek Jute Co. Ltd.

El Reda Alex Group Int.

Egyptian Flax Co. Ltd.

On the other hand, the competition in the international market is high as there are

many countries competing through production and supply for domestic as well as for exports

for global consumption. The big key players in international market are Bangladesh, India

and China.

Bangladesh is the largest exporter of raw jute, and India is the largest producer as well

as largest consumer of jute products in the world. Therefore, the local price of raw jute in

Bangladesh is defector the international price. Also, the local price of jute products in India is

deemed to be the international price.

30

Table: World production of Jute, Kenaf, and Allied Fibres from 2005/2006 to 2009/2010

In '000 Ton (1 ton = 1000 Kg)

Total Jute, Kenaf

& Allied Fibres: 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010

World 2724.13 3021.1 2997.32 2596.6 2883.9

Developing

Countries 2717.13 3014.1 2990.32 2589.6 2876.9

Far East 2660.87 2957.21 2934.26 2534.2 2821.4

Bangladesh 965 990 990 931 1080

China 82.82 86.8 86.8 80 80

India 1530 1800 1782 1476 1620

Cambodia 0.8 0.6 0.3 0.3 0.3

Indonesia 7 3.1 4 3.8 3.8

Myanmar 36.89 43.6 19.1 12.9 8

Nepal 17.66 17.1 16.8 2.9 1.8

Egypt 4.6 3.6 2.2 2.9 1.8

Vietnam 15 10.6 31 8.8 9

Other 2.41 2.36 1.8 1.8 1.8

Latin America

and Caribbean 39.37 39.91 39.07 38.5 38.5

Africa 13.19 13.29 13.29 13.3 13.3

Near East 3.7 3.7 3.7 3.7 3.7

Developed

Countries 7 7 7 7 7

Source: http://www.jute.org

Thus, these two table and above Porter‟s five force model analysis is purely explain us

that India has great opportunity for exploring the trade of Jute in the Egypt as the Egypt is far

behind as compared to India and thus according to above discussion the Indian Jute Org. can

establish the Jute industry in the Egypt and it can be the greatest opportunity by considering

the above five forces into consideration.

31

Environmental Scanning (PEST Analysis):-

Political Factors:

Jute is normally a part of the agro-economic policy of Egypt and features in the export

list. A recent report stated that farmers in Egypt grew jute in the non-irrigated areas between

1990 and 1997. At the same period of time, jute farming was costly and not profitable to jute

farmers. Thus, the production of jute started declining. Before 1997, in the crop year

1995/1996, Egyptian government launched two regulations. The first regulation was the price

floor of bleached jute at the price of 6.30 Egyptian Dollar per kilogram. The second

regulation was that Egyptian government allowed the sack manufacturers to import jute from

international market.

Therefore, Egyptian government mentioned its mission to support jute farmers in the

6th Social and Economic Development Plan of Egypt. It stated that Egyptian government

should provide irrigation to the planted areas of jute. Also, Egyptian government would

distribute the new breeding of jutes to jute framers for free of charge.

Mainly, Egyptian jute farmers have retted and bleached jutes in the natural sources of

water. However, it was also hard for them to find a sufficient amount of water to ret and

bleach jute, particularly the farmers in the northeast of Egypt. Therefore, Egyptian

government decided to encourage jute farmers to use a method of tank retting. Also, the size

of retting tank should be extended. That will help the farmers to save water.

However, after the market needs a recyclable product to replace plastic bags, jute

product may be an alternative to response to this problem of Egyptian government.

Apparently, in 2007, Egyptian government declared its intention to combat against the

climate change, as a key issue in the draft of Egypt's Five-Year Strategies on Climate Change

(2008-2012). Egyptian government had planned to decrease the use of plastic bags in Cairo

since the midst of 2010.

Economic Factors:

In fact, jute is one of key cash crops in Egypt. Nowadays, the demand and supply of

jute are declined. The decline from demand side and supply side has a negative impact of

jute. Also, the farming of jute is declined. These factors push Egypt to import jute from

foreign nations.

From 1990 to 1995, according to the statistics from the Bureau of Agricultural

Economic Research, under the administration of the Egypt‟s Ministry of Agriculture and

Cooperatives, it showed that the planted areas of jute had been decreasing in every crop

years. The planted areas of jute declined from 1.4 million square kilometer in crop year

1990/1991 to 0.85 million square kilometer in crop year 1994/1995, equally to 39.28 percent

within 5 years.

In Egypt, a key factor behind the decline of jute farming also comes from the agro-

economic reason. The jute farmers found that the planting cost of jute was higher over the

time. Thus, this factor raised the price of jute in the domestic market as a time pass by.

In the demand side, mainly, jute becomes a raw material in woven sack industry and

pulp industry in Egypt. When the domestic production of raw jute is declined, Egyptian

32

government decided to import the bleached jute from the foreign market. The imported jute

would supply the demand from sack industry. However, over the time, jutes played a lesser

important role in pulp industry. Thus, the demand of jute in Egypt declined further.

By contrast, when the demand of jute declined, the demand of polypropylene fibers (a

synthetic fiber from petroleum) increased. This changed the sector of packaging industry in

Egypt. At present, in Southeast Asia, Egypt was the largest producer of polyvinyl chloride.

However, one weakness of polypropylene fibers is the price of oil. If the price of oil

rises, the production of polypropylene fiber will be raised. Thus, this also brings a new

opportunity to the diversification of jute products in Egypt, because normally, Egypt needs to

import petroleum.

Social Factors:

Farming behavior also causes the decline of jute production in Egypt in 1990s.

Mainly, jute is grown in the central region and the northeast region of Egypt. However, the

key factor brought the decline of jute in Egypt was that the jute farmers cultivated jute in the

non-irrigated areas. This is not an appropriate way of jute farming, because the production of

jute fibers needs a certain amount of water to ret and bleach jutes.

A survey report done in 1999 shows that 97.68 percent of planted areas of jutes was

harvested from non-irrigated areas. Therefore, growing jute in the non-irrigated areas will not

make any benefits to the farmers, while the planting cost was climbing. Also the number of

farmers was declined over the time. These factors did not motivate many jute farmers to

continue their jute farming. Later, they replaced jutes with other cash crops such as tapioca,

sugarcane or maize, because these cash crops can make more income.

Besides the problem about water supply for jute farming, the new breeding of jute

also is expensive for the jute farmers who wanted to sell the higher-qualified jute.

In addition, the introduction of new material from petrochemical complex caused the

decline of the use of jute sacks.

Technological Factors:

Normally, jute in Egypt is still belonged to the traditional market. In other words, it

lacks the diversification of jute products. At the same time, the plastic-fiber technology was

introduced to market in early 1980s. That is called “polypropylene fiber”, a synthetic fiber

made from petroleum. After polypropylene fiber entered to Egyptian market, the Egyptian

woven sack industry preferred to use polypropylene bags for fertilizers, rice, tapioca and

other agricultural products.

In other words, in Egypt, technology of oil refinery brought the advancement of

synthetic fiber, while the technology of jute fiber lost its technological competition. This

means that Egypt needs the technology of jute fiber in order to diversify into jute-made

products.

33

SWOT Analysis

A SWOT analysis is a tool, used in management and strategy formulation. It can

help to identify the Strengths, Weaknesses, Opportunities and Threats of a particular

company. Strengths and weaknesses are internal factors that create value or destroy value.

They can include assets, skills, or resources that a company has at its disposal, compared to

its competitors. They can be measured using internal assessments or external benchmarking.

Opportunities and threats are external factors that create value or destroy value. A company

cannot control them. But they emerge from either the competitive dynamics of the industry /

Market or from demographic, economic, political, technical, social, legal or cultural factors

(PEST). The following diagram is clearly explained the SWOT analysis.

Strengths:

Advancement of jute-fiber technology

and bio technology. India also has the

national research center of jute and kenaf.

India is normally the largest producer of

jute products.

Business form of joint venture will

support the cost reduction in investment

in Egypt.

Jute industry of India had a turnover of

1.625 billion US dollar (65 billion Indian

rupees) annually.

In case, Egypt has not a sufficient amount

of jute production. Indian firms can

import raw jute or bleached jute from its

manufactures in India.

Easy availability of low cost of labor.

Weaknesses:

Quality certificate for jute products from

India may not be accepted in Southeast

Asian - African nations.

The image of many Indian firms does not

have a good recognition in Egyptian

market, except automobile firms from

India.

Lack of cooperation between jute related

organizations and governments in India.

Environmental problems.

Low level of labor productivity due to

inadequate formal training / unskilled

labor

Little brand image.

34

Opportunities:

Raising demand of green products in

Markets across the world and Egypt.

Market in Egypt means a market for

foreigners, because Egypt is one of the

most attractive tourist countries.

India and Egypt have set up FTA. So,

there are no barriers of the move of raw

jutes.

Egypt had a great potential to produce

jutes more than it does now. Also, Egypt

is producing jute for domestic

consuming.

Price of jute products in Egypt is

cheaper over time.

Egypt has a geo-strategic location,

because it is located in the center of

Africa. This will support logistic and

product distribution.

Threats:

Market perception is still thinking that

jute products are belonged to traditional

market, for example sacks.

Competition from the potential rival,

likely to Bangladesh, because they have a

longer experience in the product

diversification of jute. Also, Bangladesh

is the largest exporter of jute products to

the world.

It may be hard to expand the area of jute

farm, because jute farms are a competitor

of cassava farms in Egypt.

Polypropylene woven bags (PP bags) are

allowed to trade freely in Egypt.

Jute products in Egypt lacked of product

diversification.

Thus from the above SWOT Analytical table we can conclude that the India has the

dominating position in the world in the Jute Industry as it is the highest manufacturers and

producers of Jute and Jute Products and so it is the strongest point for us to start the business

with any country and this strength will eat out the other weaknesses and threats and thus,

India has the greatest opportunity to start the business of the Jute in Egypt as it is far behind

from the India.

35

Market Entry Mode:-

Forms of Corporate Structuring:

As prevalent in any industrial country, Egypt has many forms of corporate structuring

that have different consequences from both a legal and tax perspective. These corporate

forms including:

Sole Proprietorship:

Sole proprietorship is an enterprise owned by a single natural person. This type of

structure has unlimited liability for the proprietor. Generally, a sole proprietorship can engage

in any business not prohibited by law. There are some taxes advantages to Egyptian sole

proprietorship because the proprietor can choose to either be taxed as a natural person based

upon the gross receipts of the business. The Egyptian sole proprietorship is generally

restricted to foreign nationals living in Egypt.

Partnership:

This can be separated into 2 categories as follows:

(1) Unregistered ordinary partnership:

Unregistered ordinary partnership refers to all the partners in the company that are

jointly liable without any limitation on the partnership‟s total obligations. If a new partner

joins the unregistered partnership, he immediately becomes liable for all the obligations

incurred even prior to him joining the partnership. A partnership like this is not considered a

legal entity under Egypt investment law and it is subjected to tax as if it were an individual

(2) A limited partnership:

A limited partnership means a partnership where the partners‟ individual liabilities are

limited to their respective contributions to the partnership, and one or more partners are

jointly liable without any limitation on all the obligations of the partnership. This type of

partnership is treated as a corporate entity for income tax purpose.

Private Limited Company:

A private limited company in Egypt can be owned wholly by foreigners. However, in

business activities reserved for Egyptian nationals, foreigners can participate up to 49

percent. In a private limited company the liability of the shareholders is limited to value of

the authorized capital. However, the liability of the directors may be unlimited if the same is

provided in the company‟s memorandum of association or in the articles of incorporation.

Usually a limited company is managed by a board of directors according to the company‟s

charter and by-laws.

36

Public Limited Company:

The provisions of the Limited Public Company Act of 1992 allow a private company

to become a public company. A private company cannot offer shares to the public while a

public company can. If the public company was incorporated in a foreign country then it can

establish a branch office in Egypt to do business and this branch office is required to maintain

only those accounts which are related to its activities in Egypt.

Regional Offices:

According to the Foreign Business Act of Egypt, the activities of Egyptian Regional

Offices are considered service oriented. Egyptian Regional Offices may be created by multi-

jurisdictional companies in those nations in which the Corporate Head Office is not

incorporated. The law regarding Egyptian Regional Offices does not require that the Non-

Egyptian Corporate Head Office have recognition as a legal entity in the foreign country in

which they are also doing business.

Joint Venture:

In the general sense, Joint venture basically covers any task undertaken by two or

more natural or legal entities for the purpose of creating a profit thereby. The law treats most

joint ventures as a contract matter and with the exception of filing for licenses and/or tax

certificates. The parties in the joint venture remain separate entities in the eyes of the law.

Another way of creating a joint venture is to have two companies or individuals engage in

business as either a different legal Egyptian company or limited partnership respectively.

By using the above discussed area as the legal one the Indian companies and

Government can start the business of jute in Egypt.

37

Trade Barriers

Trade Barrier between Egypt and India:

The issue of trade barriers between Egypt and India can be divided into two

categories:

(i) Problems of Certification

(ii) Legal Barrier, elaborated as follows:

Problems of Certification:

Saqib and Taneja (2005) summarizes that the jute-made products from India may face

difficulties about certification and testing procedure, when the products were exported to

ASEAN market. Most of the importers require the certificate or the tests of products, even if

the test does not charge the towering outlay for Indian exporters.

The jute-made products certified by IJIRA (Indian Jute Industries Research

Association) is accredited and accepted. The IJIRA tests jute characteristics such as strength,

twist, imperfection, grist and knots / 100 yards.

Legal Barrier:

The Foreign Business Act of Egypt does not allow the foreign investors to get any

business involvement with any industry related to Egyptian culture. Due to the law, the

handicraft industry in Egypt falls into this category. Thus, the possible investment in jute

products in Egypt should be in the form of joint venture.

Thus, these are the barriers coming into the ways to start the smooth and enhancing

business of the Jute in the Egypt for the India so by taking it into the considerations and

making the strategies according to it to overcome that barriers, there will be the great trade

relations between the India and Egypt especially for the developing the Jute industry in Egypt

as well as in India.

38

Recommendations by the Analysis:

The consumption of jute products in Egypt is decreasing and not popular due to the

presence of other substitute products which are more durable such as synthetic plastic, and

lack of raw materials is another problem because the grower was turned to grow other crop

which gain more yield than growing jute. Another problem is the production of jute product

of Egypt cannot produce the soft and smooth jute fabric therefore it is not suitable to produce

the furniture or home furnishing with jute made. Moreover, the raw jute in Egypt can be

produced for domestic consumption only not for exporting and Egypt still needs to import

raw jute from other countries.

Even though, Egypt is not specializing in jute industry but the strength of Egypt is

about the design. Egypt received the G-Mark award (Good Design Award) from Japan. This

would be guaranteed that Egyptian‟s design is more acknowledge to the worldwide.

The possibility for Indian‟s jute products to gain entry as finished goods to Egypt is

quite difficult. This is so as the brand accepted in Egypt is not popular enough and moreover

the design of the products does not match to Egyptian style. The best way to enter the

Egyptian market is to export a part of raw material to be processed into finished goods in

Egypt then export to the third countries such as Japan, Korea, and Australia and others.

Moreover, India needs to enhance Indian brand recognition and Brand India image as

a precursor to exports of the finished products to Egypt. This would enable Egyptian

consumers to know more about Indian products. This would etch with the tag of

sustainability and the theme of green products in the attitude space of Egyptian people who

are already sensitized to such eco-friendly orientations.

XIV

XV

WEBSITES:-

http://www.indianmirror.com/indian-industries/jute.html

http://www.worldjute.com/jute_prices/minsuprta.html

http://www.jute.org/wjp/cp_egypt.htm

http://www.jute.org/wjp/cp_egypt.htm

ww.mfa.gov.eg

www.mfti.gov.eg

www.eeaa.gov.eg

http://www.factfish.com/egytec.html

http://www.nationmaster.com/compare/Egypt/India/Economy

http://www.ifitweremyhome.com/compare/EG/IN

http://www.aneki.com/comparison.php?country_1=India&country_2=Egypt

http://www.economywatch.com/world_economy/egypt/indo-egypt-trade-relation.html

http://www.tradingeconomics.com

http://www.wiki.eg

K.P.PATEL SCHOOL OF MANAGEMENT

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY

MBA PROGRAMME (2011-2013)

A Global Country Study Report On Egypt

(Social Analysis)

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i | P a g e

STUDENTS’ DECLARATION

We hereby declare that the report for Global/ Country Study Report entitled

“SOCIAL ANALYSIS OF EGYPT” is a result of our own work and our indebtedness to

other work publications, references, if any, have been duly acknowledged.

Place: KAPADWANJ

Date:

(Signature)

KINJAL SHAH.

RAHUL SHAH.

RITESH SHAH.

VIPUL PATEL.

HITIXA GOR.

PARTH SHAH.

ii | P a g e

PREFACE

This is the global country study report for the year 2012-13. It is very essential for on

MBA students because after the completion of their MBA studies they may undergo in the

practical corporate world for management and in that only class discussions and presentations

are not enough for understanding any job. The practical knowledge about the corporate world

is essential. The topic selected by us is Egypt society.

For this purpose we have received a great support from our college professors and

classmates. The objective of this report in MBA is to give the real knowledge of practical

world in future. This Report about “Social analysis of Egypt” will help to understand what

the job is and also be helpful to take major decisions. The aim of our study was to prepare

report to improve our knowledge, ability and skill on job undertaking in tourism area.

iii | P a g e

ACKNOWLEDGEMENT

Guidance, cooperation and inspiration are the important factors in accomplishment of

the project.

No endeavour is complete without giving thanks to people who are helpful in making

that successful. We extend our sincere thanks to KSMCS for providing us the opportunity

and scope for this report. We also thank our guide professor Ajay Trivedi for his support and

guidance.

Finally, we are sincerely thankful to others who have directly or indirectly help us in the

completion of the project.

TABLE OF CONTENTS

Sr.No. Particular Page No.

Preface Ii

Acknowledgement Iii

1 Introduction Of Egypt 1

2 Profile Of Egypt 3

Genenral Profile Of Egypt 3

Geographic Profile Of Egypt 3

Demographic Profile Of Egypt 4

Business Profile Of Egypt 4

3 Socio Cultural Environment 5

Cultural Aspects 5

Festivals Of Egypt 7

Mentality Of Egypt 10

Health Care 10

Education 12

National Life Style Habits 13

Career Attitudes 15

Economic Status 16

4 Social Issues In Egypt 17

5 Conclusion 21

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INTRODUCTION OF EGYPT

Egypt is known as mother land of the world. It is also known as “Land of

Civilizations”. It has “The Greatest Power in Human History”. We study about its

environment of country and about the future scope of its Business progress. So our

basic area of study is Socio-cultural environment, health consciousness and mentality

of the people.

The Egyptian economy is going through a critical period as the country changes

to democracy. While the shift from authoritarianism is certainly welcome, it has

inevitably encouraged instability unknown to Egypt for the past thirty years. The

implementation of economic reform accompanied by this uncertainty is particularly

challenging as political demands take precedence.

Population According to a survey conducted in July 2007, is estimated to be around

80,335,036. The estimated rate of growth of population in Egypt is 1.721%. Egypt is

considered to be one of the populous countries in Africa.

The sex ratio of Egypt population is 1.017 males per female.

Rural population (% of total population) (2010) 57.2

Mortality rate, infant (per 1,000 live births) (2010) 18.6

Mortality rate, under-5 (per 1,000) (2010) 21.8

Life expectancy at birth, total (years) (2009) 72.7

Year 2004 2005 2006 2007 2008 2009 2010 2011 2012

Population(in Millions) 77.50 78.88 78.88 80.33 81.71 83.08 80.47 82.07 83.68

2 | P a g e

PROFILE OF EGYPT

GENENRAL PROFILE OF EGYPT

Full Name Arab Republic of Egypt

Capital Cairo

Languages Captic, Arabic, French, English

Currency Egyptian Pound

Government Republic

GEOGRAPHIC PROFILE OF EGYPT

Business Profile of Egypt

Natural resources Petroleum, natural gas, iron ore,

phosphates, manganese, limestone,

gypsum, talc, asbestos, lead, rare

earth elements, zinc

Main Exports Petroleum, petroleum products,

cotton, Textile, Metal product and

Chemicals.

Area 1million sq km contains

land: 995,450 sq km & water: 6,000 sq km

Location Egypt (northeastern Africa), bordering the Mediterranean

Sea, between Libya and the Gaza Strip, and the Red Sea

north of Sudan, and includes the Asian Sinai Peninsula

Climate desert; hot, dry summers with moderate winters

Time Zone Egypt is + 2 hours GMT

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DEMOGRAPHIC PROFILE OF EGYPT

Population 82,536,770(2011 est.)

Source: World Bank

Annual population growth rate 1.922% (2012 est.)

Nationality Egyptian

Ethnic groups Islam (Sunni Muslim); Coptic

Christian; other Christian

denominations

Ethnic Make-up: Eastern Hamitic

stock (Egyptians, Bedouins, and

Berbers) 99%, Greek, Nubian,

Armenian, other European

(primarily Italian and French) 1%

Age Structure 0:14 years: 32.7% (male

13,725,282/female 13,112,157)

15:64 years: 62.8% (male

26,187,921/female 25,353,947)

65 years and over: 4.5% (male

1,669,313/female 2,031,016) (2011

est.)

Median Age total: 24.3 years

male: 24 years

Female: 24.6 years (2011 est.)

Birth Rate 24.63 births/1,000 population (2011

est.)

Death rate 4.82 deaths/1,000 population (July

2011 est.)

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SOCIO CULTURAL ENVIRONMENT

In this global report, we have done social analysis of Egypt. So we have found out

the various social factors which are affected the environment of Egypt and causes the

social issues like poverty and over population. These factors are:

Cultural Aspects (religion, family, ethnicity)

Mentality of the people

Health Consciousness and safety measures

Career Attitudes

National Life Style Habits

Education

Economic Status (Income and Earning Patterns)

Locality

Cultural Aspects

Family Structure

In the Egyptian family the father was liable for providing for his family. The

mother stayed home and raised the children. Small children and other female relatives

lived in a special part of the house. Much of the children's time was spent in training for

their adulthood.

Natural Appearance

Ancient Egyptians usually had black hair and dark eyes. Their skin was tanned.

Religion

Egyptians believed in many Gods. They believed that many things held power.

They worshiped Gods of the stars, stones and water. Egypt hosts two major religious

institutions one is Islam and other is Christianity.

Islam

Egypt is a predominantly Sunni Muslim country with

Islam as its state religion. The percentage of the adherents of

various religions is a controversial topic in Egypt. Around 90%

are Muslim. Islam plays a central role in the lives of most

Egyptian Muslims. Islam arrived in the 7th century, and Egypt

emerged as a center of politics and culture in the Muslim world.

5 | P a g e

Christianity

There is a significant Christian minority in Egypt, who

make up around 15% of the population Over 90% of

Egyptian Christians belong to the native Coptic

Orthodox Church of Alexandria, an Oriental Orthodox

Church.

Children Egyptians played with dolls, balls, tops, animal toys, and board games which were

similar to checkers. All toys were handmade Toddlers used pull toys similar to the toys

that children play with today. They were tied with string and painted. Children of the

wealthy between the ages of 4 and 14 went to school

Food

Egyptians ate two large meals each day. They ate lots of cereal, vegetables, and fruits.

Some of the most common foods were barley, wheat, lentils, cucumbers, beans, leeks,

onions, dates, figs, and grapes. Other fruits included apples, melons, pomegranates and

the occasional coconut. Beef was the Egyptians' favourite meat, but they also ate lamb,

gazelle, wild goat, ox, pork, fish, duck,

and goose.

Bread was an everyday food of both the

commoner and the wealthy. This is why

the teeth of royalty showed serious

abrasion. Wealthy Egyptians sweetened

their bread with honey and stuffed it

with fruit.

A common meal for a peasant might be

boiled or roasted beef, assorted

vegetables, fruit (usually figs and grapes), a slice of bread, and beer. The wealthy ate on

bronze, silver, or gold plates while the commoners ate on clay dishes. People ate with

the tips of their fingers. Everyone was given a small bowl of water to clean their hands

after the meal.

Festivals Of Egypt:-

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In Egypt 90% people are Muslim, but in other 10% many people like Coptic Christians,

melange and Hindu. There are many festivals celebrate in Egypt. Some of the

following are as under;

Ramadan and Eid al-Fitr:-

Ramadan is a month of fasting during daylight hours

in which Muslims avoid doing from eating, drinking,

smoking and sex from sunrise to sunset. The mood

during the day can be sad, with reduced business

hours to allow time for sacred observation. The first

day after Ramadan begins a three- or four day

holiday called Eid al-Fitr. Muslim holidays are not

on fixed dates because they are on the lunar calendar, so they move back by about 11 days

each year.

Leylet en Nuktah

Ancient Egyptians worshiped the Nile because of the yearly reward it brought, and

beautiful women were sacrificed to appease the gods and bring on the flooding. Modern

Egyptians still celebrate the yearly rise of the river on June 17, since the overflow is

what brings the buildup that gives food to the Delta's rich soil. Instead of sacrifices,

modern Egyptians picnic and camp along the edges of the river or spend the night out

on the streets with family and friends.

Coptic Christmas

Coptic Christians celebrate Christmas on January 7, and most Egyptians regardless of

religion join in the festivities. The week before Christmas, homes and businesses are

hited out with colorful lights and decorations, and there are manger scenes and special

holiday bazaars in the streets. Following the midnight mass on Christmas Eve, people

gather to celebrate and eat a traditional dish of rice, garlic and meat soup called fata.

Sham al-Naseem

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“Sham al-Naseem” means “sniffing the breeze.” Egyptians of all religions celebrate this

ancient holiday to mark the coming of spring on March 21 by spending the day in the

countryside or in parks for picnics; some have their picnic on a boat trip on the Nile.

The picnic baskets are loaded with the traditional foods of this holiday, including dried

or pickled fish and dishes made with midamis or foul (kidney beans). Food vendors,

dancers and musicians also fill the streets to entertain the public on this festive day.

Moulid an-Nabi

Moulid an-Nabi is a major Islamic festival that marks the birth of the prophet

Mohammed. Most cities host parades and processions on this day, and the streets are

filled with dancers, acrobats, drummers and musicians. Families join together to greet

each other and exchange gifts before heading out to explore the street fairs. Traditional

sweets like halawet el-moulid and candy dolls called are sold from roadside stands as

well as hummus the traditional food of Moulid an-Nabi.

Other Festivals in Egypt :-

Beautiful festival of Egypt

This festival-related article is a stub.

This article about Egyptology or subjects relating to Ancient Egypt is a stub.

8 | P a g e

Sports Festival:-

Food Festival:-

Film Festival :-

Mentality of Egypt

Egyptians, who just agree on what goes on whether it is for their sake or not.

If you ask an Egyptian about his life, the typical answer would be that it is going OK but not in

the way he imagined and he would also say that he is happy and satisfied with his life. People

just accept the life they get and they don't try to work to achieve something useful for them and

their community.

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Health care

Health care system

As a developing country with vast human resources and a rapidly-growing economy,

reforming Egypt's health care sector is a top priority for the national social development

agenda.

Ten work streams already demonstrate the defined dimensions of the Egyptian health

reform program, the most crucial of which include providing high quality care through

financially-sustainable health insurance, spreading the coverage of primary care

services, enhancing family planning services at a national level, institutionalizing and

strengthening consumer protection, in addition to encouraging public-private

partnerships.

Nearly all Egyptians have access to health care. Between 1982 and 1987 (during the

first five-year plan), the government established 14 public and central hospitals, 115

rural health units, and 39 rural hospitals. The total number of beds increased by 9,257

during this period (to a total in 1985 of 96,700). In 1987, 190 general and central

hospitals were established (26,200 beds), as well as 2,082 rural health units, and 78

village hospitals. In 2000, 95% of the population had access to safe drinking water and

94% had adequate sanitation.

Disease

With less than 1 percent of the population estimated to be HIV-positive, Egypt is a low-HIV-prevalence country. According to the National AIDS Program (NAP), there were 1,155 people

living with HIV/AIDS (PLWHA) in Egypt by the end of 2007. UNAIDS estimates for 2005

were higher, putting the number of HIV-positive Egyptians at 5,300.

Serious diseases in Egypt include schistosomiasis, malaria, hookworm, trachoma,

tuberculosis, dysentery, beriberi, and typhus. Although malaria and polio cases were

small in number, nearly 1,444 measles cases were reported in 1994. In 1999, Egypt

vaccinated children up to one year old against tuberculosis; diphtheria, pertussis, and

tetanus (94%); polio; and measles (95%). Of children under age five, 4% were

malnourished as of 2000.

The country's fertility rate was 3.3 in 1999. As of 2000, 56% of reproductive-age

women practiced contraception. Abortion is legal only for medical reasons. The overall

death rate was estimated at 7, 6 per 1,000 inhabitants in 2002 and the infant mortality

rate in 2000 were 42 per 1,000 live births. Life expectancy in 2000 was 67 years.

A full 80% of all Egyptian women undergo female genital mutilation. There are no

specific laws against this practice.

Egypt planned to expand its health insurance, with the target of covering 75% of the

population. As of 1999 total health care expenditure was estimated at 3.8% of GDP.

There were 129 cases of AIDS in 1996.

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Common Disease in Egypt

Food and waterborne diseases - the number one cause of illness in travelers

travelers' diarrhea

Escherichia coli diarrhea

hepatitis A / very common

hepatitis B

hepatitis C - highest prevalence in world

schistosomiasis - found in fresh water including Nile river

typhoid fever

Insect borne diseases

parasitic diseases

filariasis

leishmaniasis

Rift valley fever / rare

amebiasis

diptheria - endemic to the region

West Nile fever

Challenges

Compared to a country like Swaziland, Egypt is almost HIV-free. Egypt has a very low

HIV/AIDS adult prevalence rate less than 0.1% which is far better than in most

countries around the world. Just around 11,000 people were living with HIV/AIDS in

2009 with less than 500 deaths recorded within the same year. Egypt is also spared

when it comes to the deadly malaria which continues to tear most sub-Saharan African

countries into pieces. However, Egypt is not spared at all when it comes to

Schistosomiasis (sleeping sickness), bacterial diarrhea, hepatitis A, Rift Valley and

typhoid fever.

Another major health problem facing Egypt today is Obesity. In 2006, more than 30%

of Egyptian adults were overweight according to World Health Organization. Egypt is

the 8th most Obese country in the world today. Meanwhile, about 6.8% of Egyptian

children under the age 5 were underweight in 2008.

Education

The Egyptian educational system is highly centralized,

and is divided into three stages:

Basic Education

o Primary Stage

o Preparatory Stage

Secondary Education

Post-Secondary education

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The public education system in Egypt consists of three levels: the basic education

stage for 4–14 years old: kindergarten for two years followed by primary school for six years

and preparatory school for three years. Then, the secondary school stage is for three years, for

ages 15 to 17, followed by the tertiary level. Education is made compulsory for 9 academic

years between the ages of 6 and 14. Moreover, all levels of education are free any

government run schools.

According to the World Bank, there are great differences in educational

attainment of the rich and the poor, also known as the “wealth gap.”

Since Egypt's extension of the free compulsory education law in 1981 to include

the Preparatory Stage, both Primary and Preparatory phases (Ages 6 through 14) have

been combined together under the label Basic Education. Education beyond this

stage depends on the student's ability.

Although the median years of school completed by the rich and the poor is only

one or two years but the wealth gap reaches as high as nine or ten years. In the case of

Egypt, the wealth gap was a modest 3 years in the mid1990s

Egypt has a literacy rate of 71.4% for the entire population with the female literacy

rate around 59.4%. In other words, about 71.4% of the total population of Egypt above

age 15 can at least read and write which is far better than in most countries in Africa

and the Arab world. On the other hand, only about 59.4% of Egypt's female population

above age 15 can read and write which falls below expectation compared to most

countries in Africa (countries like Botswana, Kenya, etc.).

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Challenges

Although significant progress has been made to increase human capital base through

improved education system, still the quality of education experience is low and unequally

distributed. Due to lack of good quality education at the basic and secondary levels, there has

been a mushrooming market for private tutoring. Now to take private tuition has become more

of an obligation than a remedial activity.

A study conducted by UNESCO on educational equity in world‟s 16 most

populous countries placed Egypt in the middle range in terms of equity of primary and

secondary enrollments across governorates in Egypt. But when the wealth component is

added to education attainment, the results are not very encouraging. There are

significantly higher enrollment rates in wealthier regions at both the primary and

secondary levels. This confirms that more efforts are needed to reduce the wealth gap in

educational attainment.

National Life Style Habits.

Clothing

The Egyptians wore very simple clothing. The clothes were made of linen. Linen was

made from the flax that grew in the fields. It was woven into cloth. The rich wore finely

woven linen while the workers wore a more durable material. Male peasants wore

loincloths. They hung from their waists to their knees. Many times they wore no

clothing. Men in the upper class wore skirts or kilts. The women wore simple, tight-

fitting dresses. They came up to their chests and were held up on the shoulders by

straps. Children wore no clothing until they were in their teens.

Jewellery

One common likeness on Egyptian jewellery was the scarab or beetle. Egyptians

believed the scarab to be the symbol of resurrection or life after death. Both men and

women wore earrings and bracelets on their upper and lower arms. They also wore

rings, necklaces, and pectorals. Pectorals were wide necklaces that hung on the chest.

The jewellery was usually made from gold which was mined in the Eastern Desert. The

jewellery was often decorated with semiprecious stones like carnelian, feldspar, and

amethyst. Turquoise and lapis lazuli were imported from the Sinai Peninsula to add to

the jewellery as well. The jewellery often contained good luck charms called amulets.

Hair Styles

The boys shaved their heads except for one braided lock until the age of 12. This was a

protection from fleas and lice. Girls wore their hair long. It was often worn in pig tails.

The women wore their hair loose or in braids. The wealthy wore wigs. For parties

Egyptians wore wigs or braided their hair.

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Pets

Most families had pets. Cats were a favourite. Other pets included monkeys, geese,

goats, and birds. The rich had dogs. They used them for hunting.

Hunting

Hunting was a sport enjoyed not only by the peasants,

but by noblemen as well. In the desert the men dug

camouflaged ditches and used arrows to catch lions or

hyenas. Hunters used bows and arrows or boomerangs.

They used daggers or spears once the animal had

fallen. These weapons were made from wood, bronze,

and copper.

Homes

Egyptian homes were made from bricks. Bricks

were made of sun dried mud. Mud bricks lasted a

long time in the hot country which had little rainfall. The homes had low arched

doorways. Some had windows with wooden shutters. The floor was dirt.

Entertainment

The Egyptians loved music, and played instruments such as the lute, harp, and lyre.

Festivals held in Ancient Egypt were usually holidays in honour of the gods. The

Egyptians loved their children and encouraged them to play and have fun. Some games

they played were leap frog and tug o' war. Egyptians liked board games. One called

Senet was similar to checkers. Another board game was called Snake. The board was

shaped like a curled snake with its head in the centre. The snake's body was divided

into squares, half of which were hollowed out. Six pieces shaped like lions and

lionesses and many marbles were needed to play this game. Unfortunately the rules to

this game were not written down.

Marriage

Peasant boys married by the age of 15. Girls were only 12 when they married. Girls

from more wealthy families married a little older. Many marriages were arranged by

parents. The life expectancy of an Egyptian was only around age 40

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Career Attitudes

Women and work

Egypt is more liberal compared to many other Arab countries, especially those

in the Gulf region, conservative positions are expected to hold. It is expected that males

will have more conservative attitudes towards the work of women.

Egypt is quick in importing innovations in technologies and consumables; he is far more

reluctant in terms of importing ideas and lifestyles.

Egypt has more than three million of its citizens working abroad (Zohry, 2006). The World

Bank statistics estimated the number of Egyptians working abroad in 2005 at around 2.4

million.

The social fabric of Egyptian society is strong with great emphasis accorded to the family unit

and religious values. Although Egypt has high uncertainty avoidance, this propensity is lower

than in other countries in the region (Parnell and Hatem, 1999).

The work ethic reflects the belief that work is good in itself and that success results

from hard work (Buchholz, 1978).

Pertaining to the attitudes of the Egyptian respondents to the work of women, there

were significant differences between males and females. In general, male respondents

expressed agreement or neutrality to statements such as „Women are happier in

traditional roles” or neutrality to such statements as “women are not suited to work

outside the home”

The role of women in society and the significant gender differences in the way

women‟s work is valued and perceived are also congruent with those of the GLOBE

study.

Economic Status (income and earning patterns)

In Egypt the definition of income is more complete, including income received in

kind as well as in cash. In Egypt a money value was imputed to receipts in kind,

household consumption of crops and crop by-products, and home-consumed livestock.

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Social issues in Egypt

There are mainly two social issues in Egypt.

1) Poverty

2) Overpopulation

One of Egypt's biggest problems is poverty. The growth of slums has caused an

increase in crime, violence, and religious militancy (forceful expression of religious

beliefs). Pickpockets and purse snatchers are common all over Cairo. There is white-

collar crime including embezzlement, tax evasion, and bribes to officials. Another

major problem is the illegal use of drugs.

Egyptian prisons are overcrowded. International human rights organizations, such as

Human Rights Watch and Amnesty International, have criticized the Egyptian

government's handling of strong opponents of its policies. The major criticism is that

not only violent opponents, but also nonviolent political opponents, are being denied

their political and civil rights in the government's attempt to maintain control.

Poverty Although the incidence of poverty is decreasing overall in Egypt, the number of poor people

continues to increase as the population grows. Egypt has about 10.7 million poor people, and

70 per cent of them live in rural areas.

Who are Egypt's poor people?

Rural poor people typically include:

tenant farmers and small-scale farmers

landless labourers

unemployed youth

women

Why are rural people poor?

Almost two thirds of the people in Upper Egypt are poor. They depend on

agriculture for their livelihood, and agriculture in this area does not provide them with

sufficient food security and income. Farmers in this part of the country have very small

landholdings, compared to those in Lower Egypt. They cultivate crops that have a low

market value and generate limited income. They are unable to finance the higher costs

and greater risks of growing non-traditional crops. Small farmers, microenterprises and

16 | P a g e

rural women do not have access to a microfinance system that responds to their needs.

Alternative employment opportunities are lacking because of the limited development

of small enterprises and microenterprises. Local markets are underdeveloped and

marketing infrastructure, such as transport, storage and grading facilities, is poor.

Producers' associations are not well organized.

The relation between education and poverty is an inverse relation – usually

poverty decreases with higher levels of education. The relation between education and

poverty is an inverse relation – usually poverty decreases with higher levels of

education. It is noted that poor women are usually illiterate. However, in Sudan, it is

noted that households headed by individuals with intermediate and primary education

were better off in terms of total household income, than those households headed by

individuals with higher educational qualifications. This may be attributed to

engagement of those with intermediate or primary education in the informal sector

and/or performing more than one job.

Egypt's poverty profile reveals that the poor are usually either occupied in

marginal activities and low-wage work or unemployed. Most of them are illiterate or of

low educational level. Although there has been some progress, these improvements are

not satisfactory, either because the pace of development is very slow.

The case of women in poverty is of major significance not only because of their

intensely restricted life chances, but more because of the increasing number of female-

headed households that reached 12.6% and the extension of their poverty to their

children. Child labor is familiar in Egypt because of poverty. In very poor areas 50% to

70% of poor families depend on children income. Children work at 8 years old and

their wages are less than those of men by 25% to 33%. Working hours for children are

7-9 hours a day and in some cases it is extended to 12 hours a day.

Overpopulation

Egypt, like many other countries, is battling overpopulation. Egypt is suffering from too

many people living on a small piece of land. Egypt is the sixteenth largest country in

terms of population Egyptians cannot live in the desert where there is no water and no

way of sustaining themselves. The majority of Egypt is covered in desert and Egyptians

need to live along the Nile River and Nile River Delta where there is water and other

necessities that the desert does not have. Overpopulation causes many problems

including, but not limited to: pollution, rapid spread of disease, and unemployment.

Where is it happening?

Egypt is not the first country you think of when it comes to overpopulation. You think

of China, India, of Bangladesh. But Egypt too, is suffering from overpopulation. The

17 | P a g e

population growth rate is two percent higher than that of the United States and this is

one of the main contributing factors of overpopulation. Most of the major cities in

Egypt are around the Nile River. This population crisis affects people living in cities.

Most of Egypt is uninhabitable at this point in time because it is mostly desert and not

safe for humans to live in. This just makes the overpopulation problem seem worse

because everyone lives in crowded cities. Cairo, the capital of Egypt, is the most

populated city in Egypt at about 8,000 people per square mile. The population problem

in Egypt is severe and needs to be curtailed before it is as bad as China's population

problem.

Egypt faces huge problems of overpopulation, poverty

In Cairo, Egypt's capital and the seat of the citizens' revolution, some districts hold

more than 41,000 people per square kilometer, or 100,000 per square mile. Manhattan,

by comparison, has about 27,000 people per square kilometer.

More than 15 million Egyptians live on less than $1 a day, a key factor driving last

month's protests. The divide in Egypt between rich and poor, where resistance to birth

control is high, is startling.

Even though Egypt has severely limited resources, especially fertile land and water

(only 3 inches of rain falls annually), the numbers of poor steadily increases.

In past years, the Egyptian government mounted an aggressive but unsuccessful

advertising campaign to limit new births. One motto: "Before you add another baby,

make sure his needs are secured."

Despite Egypt's progress in reducing its total fertility rate, currently estimated by the

Population Reference Bureau at 3.0, that total is still unsustainably high. As long as

Egypt's base population increases, no meaningful headway on critical social issues like

education can occur.

Egypt offers free education and well-established literacy programs. But the numbers of

Egyptian illiterates, one in every four or nearly 17 million, remains unchanged over the

last two decades. Ghada Gholam, and UNESCO Egypt literacy specialist, said: "There

are lots of successful efforts, but with the increase in the population growth it is really

difficult to decrease the number of illiterates."

Population statistics reveal the grim story. Educators must teach 1.4 million Egyptians

to read and write annually simply to keep up with the country's population growth. And

for every 700, 000 who learn to read, the literacy rate is only reduced by one percent.

18 | P a g e

Other variables that limit access to education include the high post-puberty dropout rate

for teenage girls and the inability of poor parents to pay for transportation or the

textbooks. Nearly 70 percent of women, Egypt's mothers and future mothers, are

illiterate.

Each year, Egypt's population swells by approximately 1.5 million. The United Nations

projects that Egypt will grow from 95.6 million in 2026 to 114.8 million in 2065 when

it will finally stabilize.

Egyptian high fertility has imposed costly socioeconomic burdens on the nation.

Economic development is stalled and quality of life eroded because of reduced access

to jobs, education, water and food.

Little wonder Egyptians took to the streets. But too many decades ignoring an

exploding population have left Egypt with few options for future improvement.

Unemployment and Poverty in Egypt

According to CNN, the current turmoil in Egypt is driven by a lack of jobs and

the high levels of poverty in the country. Statistics show that 50% of men and 90% of

women are still without employment two years after leaving college. It is also telling

that 19.3% of the population live on less that $2 a day. All this despite the boom in the

price of oil.

.

19 | P a g e

CONCLUSION

From time to time two quite opposite views concerning the causes of

overpopulation in „developing‟; countries are rehearsed in politico-descriptive terms

rather than by way of complex statistical analyses of past trends and future projections.

Theory 1 argues that poverty is sustained or exacerbated by too high a population at a

given period of time, and is therefore an effect of it, in particular when birth rates

remain high and mortality rates are decreasing rapidly. Theory 2 contends that poverty

itself is the cause of high birth rates, largely because of inequitable access to natural

resources, notably in the form of land, and that the result is a population and

environmental crisis. (See, for instance, Commons without Tragedy: Protecting the

Environment from Overpopulation - a New Approach. R V Anderson (Ed.) 1991.)

For practical reasons, such assertions cannot usefully be made about the world

as a whole or even to large continents, but can only apply to more limited geographical

areas or countries. A recent visit to the Arab Republic of Egypt, a country which, by

general agreement, is both overpopulated and poor, prompted an examination of these

somewhat contradictory theories. It would seem that Egypt remains very poor because

of rapid population increase, despite the land reforms of the 1950s and early 1960s, as

well as newly available resources of energy and of modern technology; income per

capita is actually continuing to fall. The population has doubled in the last 30 years to

over 55 million. While the birthrate has fallen from 46 per 1,000 to about 34 per 1,000

during that period, the death rate has fallen even faster and is now not much above

European levels. Half of all females are aged 15 - 49 and half the population is under

the age of 25. Medical services are good overall. Birth control is promoted, albeit rather

half-hearted in some parts of the country, but is available if requested. Average family

sizes vary from 5 to 8 children, being highest in the Nubian villages in Upper

(southern) Egypt. Highly educated professionals in the state sector such as doctors are

extremely poorly paid by western standards and have fewer children.

It seems that here, as in many other „„developing‟‟ countries, the slowness in the

rate of change in cultural and religious attitudes among women, and perhaps more

importantly among men, combines with much more rapid change in technology and

medicine. In Egypt certainly, the crisis of overpopulation is not the effect of sustained

or increasing poverty.

K.P.PATEL SCHOOL OF MANAGEMENT

AND

COMPUTER STUDIES

AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY

MBA PROGRAMME (2011-2013)

A Global Country Study Report On

(Cotton Industry of EGYPT)

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i | P a g e

STUDENTS’ DECLARATION

We hereby declare that the report for Global/ Country Study Report entitled

“Cotton Industry OF EGYPT” is a result of our own work and our indebtedness to

other work publications, references, if any, have been duly acknowledged.

Place: KAPADWANJ

Date:

(Signature)

KINJAL SHAH.

RAHUL SHAH.

RITESH SHAH.

VIPUL PATEL.

HITIXA GOR.

PARTH SHAH.

ii | P a g e

PREFACE

This is the global country study report for the year 2012-13. It is very essential for on

MBA students because after the completion of their MBA studies they may undergo in the

practical corporate world for management and in that only class discussions and presentations

are not enough for understanding any job. The practical knowledge about the corporate world

is essential. The topic selected by us is Egypt society.

For this purpose we have received a great support from our college professors and

classmates. The objective of this report in MBA is to give the real knowledge of practical

world in future. This Report about “Cotton Industry of EGYPT” will help to understand what

the job is and also be helpful to take major decisions on the basis of national and international

level of study report. The aim of our study was to prepare report to improve our knowledge,

ability and skill on job undertaking in tourism area.

Through this collaboration, the team that was assembled to undertake the work was

broader and more experienced than either unit could have fielded individually. The effort was

truly a collaboration among the members of the team, the sponsoring units, and most

importantly, the government records, data and report the cotton experts who made his report

and gave their time and shared valuable insights and information about the factors affecting

the final quality of Egyptian cotton.

It is the hope of all who worked on the study or supported it that continuing

improvements in the Egypt’s cotton industry and it’s comparison with Indian cotton industry

and both countries role in improvement of cotton sector. The control systems in Egypt will

preserve the unique properties of Egyptian cotton for all who wish to enjoy them.

iii | P a g e

ACKNOWLEDGEMENT

Cotton is one of Egypt’s landmarks recognized in international markets for its

superior quality. During the past decade, the Government of Egypt has actively worked on

liberalization and privatization of the Egyptian cotton industry to allow the private sector to

play a more important role in the marketing, ginning, spinning and weaving of cotton. As a

result, the Egyptian cotton industry has become more competitive and Egyptian cotton has

regained much of its world market share.

Without question, the most valuable contributions to this study came from the many

people in the Egyptian cotton industry and the foreign spinners who use Egyptian cotton who

participated in the marketing survey. These people contributed a sizable amount of time and

provided invaluable information, insights and understanding of the Egyptian cotton markets

and the cotton quality issue in Egypt. This study would not have been possible without their

cooperation.

Cotton is one of the most important and widely cultivated cash crops across the world.

It is also one of the most important commercial crops cultivated in India. Cotton is the most

important commercial crop of India. It is generally regarded as King of Textile Fibers which

has made significant contribution to the National economy. It provides sustainable

livelihoods for millions of rural population. The textile industry is nourished by cotton for

over a century .Today, the textile industry has grown to be the largest industry in India

Guidance, cooperation and inspiration are the important factors in accomplishment of

the project.

No endeavour is complete without giving thanks to people who are helpful in making

that successful. We extend our sincere thanks to KSMCS for providing us the opportunity

and scope for this report. We also thank our guide Professor Mr. Ajay Trivedi for his

support and guidance.

Finally, we are sincerely thankful to others who have directly or indirectly help us in the

completion of the project.

iv | P a g e

EXECUTIVE SUMMARY The objectives of this report were to assess the cotton quality and grading systems in

Egypt and to recommend improvements. The main objective of this report is to compare the

cotton industry of Egypt and India and evaluate the performance that is achieved by both.

Egypt is one of the 11 countries in COMESA, EAC and SADC countries targeted for the

regional baseline study on cotton and textile. Together these countries account for over 90% of

traded cotton and textile.

As one of the most influential nations in the Middle East, Egypt has encountered

mixed success in transitioning from an economy driven by natural resources to one with a

healthy amalgam of industry and services over the past 50 years. Although it has successfully

diversified its economy, Egypt remains one of the poorest of its regional neighbors on the

basis of per-capita income, and a succession of unstable governments have left the nation

with inconsistent political institutions, weakening social infrastructure, and a legacy of

corruption. Long-term national competitiveness will require a clear economic strategy and

continuity of effort.

Egyptian cotton is recognized globally for its unmatched quality, fueling a textile

cluster that has historically been an important component of the national economy. Bolstered

by superb endowments and several advantageous related industries, the textile cluster faces

new challenges as falling structural barriers to trade boost the intensity of global competition.

To maintain sustainable competitive advantage and upgrade textile cluster performance,

Egypt should privatize key SOEs in the spinning sector and partner with multinationals and

clusters in developed nations to upgrade the skills of its textile labor force.

Cotton area and production in 2009/2010 is forecasted to decline by 17 percent to 110,000 Hectares.

Exports in 2009/08 are expected to decline sharply from the previous year. This is mainly due to the

declining profit margins for cotton compared with other crops such as rice and corn. Exports for

2008/09 are expected to decline dramatically to 100,000 bales as a result of lost price

competitiveness coupled with the world recession. Imports are forecasted to increase by about eight

percent.

v | P a g e

Egyptian cotton is of the species Gossypium barbadense, longer staple cotton

characterized by higher quality. The majority of the cotton is grown in the Nile Delta with

around 1 million employed in Production, but still mostly dominated by smallholder farmers.

Yields in Egypt are significantly higher than the rest of Africa, reaching 2000 kg/ha.

This is due to more advanced production techniques, specifically the use of irrigation. The

cotton industry has been gradually more liberalized since 1994/95, and now there exists 62

traders buying cotton (17 public and 45 private) and 5 ginning companies (2 private and 3

public).Egypt also has a significant domestic textile industry that typically utilizes about half

of the total cotton production. The unusually high world price of cotton lint in 2010 though

prompted a greater export of unmanufactured cotton than typically expected. Egypt has 15

major ports for the export of goods, of which Alexandria is the largest.

It is neutral supervising cotton organization that serves the cotton sector s dealing

with seed cotton and lint cotton. Some of CATGO services are insuring the purity of

Egyptian cotton varieties and its international reputation, classing and evaluating cotton crop

and supervising it throughout all handling procedures right from picking until baling,

determining the moisture content of cotton, supervising their weights, issuing international

authorized certificates, determining the trash level "contamination", preparing official

standard boxes representing the standard grades for all Commercial varieties and applying the

arbitration in its different stages (arbitration, appeal and counter appeal).

The Egyptian Ministry of Trade and Industry and ALCOTEXA registered a trademark

for Egyptian cotton, to help consumers recognize the quality of Egyptian cotton products by

identifying those goods bearing the logo, and protect them from misleading labels. The Trade

mark is registered in 26 countries and others still in process. A licensing program and

monitoring mechanism are also enforced.

The political and economic upheaval that has occurred since the beginning of 2011

has complicated an already difficult market outlook for Egypt’s cotton production and has

required the payment of government subsidy to textile mills, so as to absorb some of the

domestic supply and achieve the political imperative of supporting the price received by the

farmer.

Egypt shows some linkages indicative of a cluster-based economy, with particular

strength in transportation and logistics and a robust tourism cluster. But enforcement of input

vi | P a g e

quality standards remains lax and availability of some support services is poor despite

increases in FDI flows which might have encouraged cooperation between firms.

Cotton subsector participants often state that the quality of Egyptian cotton has

deteriorated overtime. A variety of causes are mentioned. The views differ depending upon

the participant. Some claim that the grading system has deteriorated under the supervision of

CATGO. It is some times stated that the graders, or cotton classers, are poorly trained, or that

they are not as well experienced as those in some bygone era. Some say that the need for

grading every sack of seed cotton is an overwhelming task and clogs the system. Others

report that the bulk of the cotton that is exported is at a low grade.

Some say that the grading system, including the number of grades and the

terminology is far too complex and also may overwhelm the system. Others blame the current

problems on the nationalization of the cotton subsector that began in about 1962-63 and

contend that all will be well as soon as the entire subsector again becomes a free market.

Perhaps liberalization will solve all the problems of the subsector but in case it doesn't, or if

liberalization is several years still in coming, then what can the GOE do in the mean time to

help to preserve, maintain, and improve the international reputation of Egyptian cotton?.

Regardless of the speed or final outcome of liberalization of the cotton markets, the GOE will

continue to have an impact on the cotton subsector. The MALR will continue to play a large

role in cotton breeding. All cotton producing countries, even those that are considered to have

a completely free market, have regulations about seed production and the varieties that can be

planted. Most governments also operate the grading and testing organizations, they provide

official statistics on the crop, and they operate the market news services. The entire Egyptian

cotton subsector will only operate well when the public sector and the private sector are each

making their unique and valuable contributions.

A major assignment in this study was to interview foreign importers of Egyptian

cotton. The sample included some thirty mills using Egyptian cotton in various markets

including Japan, East Asia, and Europe. These interviews were conducted to learn of their

appraisals of the spinnability of Egyptian cotton, their opinions regarding the Egyptian

grading system, and regarding the pricing of Egyptian cotton, particularly on the price

vii | P a g e

differentials between grades (See Annex II for the questionnaire used for this assignment, and

Annex III for a list of foreign spinners who responded to this questionnaire and annex IV for

a summary of the responses).

Accordingly, the Government set forth a strategy to develop cotton-dependent

industries on a step by step basis, from “seed to skin”, starting with ginning, spinning,

weaving, dying and finishing industries, followed by the apparel and home furnishing

industries and finally marketing and promotion to achieve high levels of growth for the

Egyptian economy.

The Egyptian government’s newly adopted strategy will assure the availability of

Egyptian cotton for the international market, and local spinners will also have an ability to

import cotton to accommodate their growing capacities. The government has also made a

commitment to modernize spinning, dying and finishing industries to utilize their maximum

capacities and to become attractive for foreign investments, contributing to growth in

employment.

Egypt has a diversified economy. It has extensive natural and human resources. Key

industries include tourism, petroleum, agriculture, manufacturing and the services sector. The

government is implementing economic reforms designed to encourage private sector

investment as the engine of sustainable economic growth and rising incomes.

With its reputation as the world’s finest in terms of quality, softness and strength,

Egyptian cotton is the country’s most important agricultural export. Other top exports include

crude oil and petroleum products, textiles, agriculture, food processed products, furniture,

metal products, building material and chemicals.

Since the 1990s, Egypt has embarked on a series of structural reforms focused on

economic stability, deregulation, privatization, liberalizing trade and foreign investment

regimes and restructuring the banking system. Economic policy offers investors attractive

incentives, a freely convertible and floating currency and a young, skilled workforce. Egypt

has also worked to transform itself into a leader in information technologies and e-commerce

in the region.

viii | P a g e

Under the exchange rate flotation policy, the Egyptian Pound was allowed to find its

free market rate in relation to other currencies, which resulted in more than 50% devaluation

in two years. This step increased the textile sector’s competitiveness and the demand for its

products.

Located at the crossroads of Europe, the Middle East and Africa, Egypt has for

centuries been a melting pot of races and cultures – with a tradition of tolerance and

hospitality that persists to this day. While modern Egyptians are largely Eastern Hamitic in

origin (Egyptians, Bedouins and Berbers); small percentages of the population are of Greek,

Nubian, Armenian and European descent.

Egypt’s capital, Cairo, combines ancient architecture and a cosmopolitan lifestyle.

Although it maintains its own unique culture, Egypt has embraced Mediterranean, French,

British and even American influences. Today, hundreds of thousands of foreigners live and

work in Cairo, one of the world’s largest and busiest cities.

Regarding the performance, the cotton sector in Egypt has done pretty well. The

production has stayed on the same average level but the yield has increased. Other merits are

increased prices and farmers’ share of the final export price. Also the export is greater today

than what it was before the reform. Egypt has reached both increased competition and been

able to coordinate the market, but still a lot has to be done.

The structure of the Egyptian cotton industry has changed. This can mainly be seen

through the number of players participating on the market and the increased freedom of

choice for the actors. The private sector is fairly well established in all parts of the cotton

production process, from input market to marketing and exporting the cotton. The public

share of the market is decreasing.

A high number of firms often involve higher degree of competition while it

complicates the coordination of quality enhancing measures. It has been shown that there in

some cases exists a trade-off between the coordination and competition, for example when

taking action in order to improve quality.

Sr.No. Particular Page No.

1 Introduction of Cotton 1

a. Egyptian Cotton Industry 3

b. Indian Cotton industry 5

2 Market structure

a. Egyptian Cotton Sector 6

b. Indian Cotton Sector 7

3 Trade, Consumption & Consumption of Cotton 10

4 SWOT Analysis of Cotton Industry

a. Egyptian Cotton Industry 12

b. Indian Cotton Industry 13

5 Porter’s Five Force Model

a. Egyptian Cotton Industry` 15

b. Indian Cotton Industry 17

6 BCG matrix of Egyptian Cotton Industry 21

7 PEST Analysis

a. Egyptian Cotton Industry` 24

b. Indian Cotton Industry 25

8 Competitive Advantage of Egyptian Cotton Industry 29

9. Top Companies of Egyptian Cotton Industry 30

10. Performance and comparison of Cotton Industry of Egypt

& India

31

11. Conclusion 33

Page 1

INTRODUCTION

EGYPTIAN COTTON

BACKGROUND :-

Cotton is one of Egypt‘s landmarks recognized in international markets for its superior

quality. During the past decade, the Government of Egypt has actively worked on liberalization and

privatization of the Egyptian cotton industry to allow the private sector to play a more important role

in the marketing, ginning, spinning and weaving of cotton. As a result, the Egyptian cotton industry

has become more competitive and Egyptian cotton has regained much of its world market share. The

transition has been aided by the operation of the joint Egyptian-German Cotton Sector Promotion

Program.

In 2002, the International Cotton Advisory Committee (ICAC) held its 61st plenary meeting

in Cairo under the Theme: ―The 21st Century Cotton Industry: Growth Through Private

Investment‖. As follow-on to this meeting a conference under the same theme was held in Egypt on

May 15, 2004, organized by the Government of Egypt, the Egyptian-German Cotton Sector

Promotion Program and the ICAC.

HISTORY:-

Egyptian cotton is an extraordinary commodity that has played an important and vital role in

Egypt's economic, social, and political history during the past two centuries. Egypt‘s unique climate

and fertile soil are ideal for agriculture, and especially cotton. From the early 1800s up to the present,

Egyptian cotton has always been synonymous with luxury and quality.

1821 – Egyptian Cotton is Born

A Frenchman cultivated cotton trees in Egypt and produced three bales of extra long staple

cotton, which were sold for a very high price in France. As a result, Egypt‘s ruler, Mohamed Ali

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Pasha, discovered that Egypt‘s climate combined with the best cotton seeds produced cotton of

higher quality than any other in the world.

1833 – Establishment of the School of Agriculture

Mohamed Ali established the School of Agriculture in Shoubra for the study of modern

agriculture. The aim of the School was to train students to teach modern agriculture in their villages,

creating standardized methods of cotton cultivation throughout the country.

1862 – Heightened Demand for Egyptian Cotton

Cotton planting in Egypt was extended in order to meet the demands of the textile factories in

Europe, as a result of the American Civil War (1861-1865). This expansion coincided with the

increase of cotton prices in the world market. From only 596,000 quintals in 1861, Egypt‘s cotton

exports culminated to 2 million quintals in 1865.

1869 – Trade Expansion

The completion of the Suez Canal enabled ships to travel between Europe and Asia and

beyond without having to circumnavigate the vast African continent, easing and expanding the

Egyptian cotton trade.

1910 – Government Regulation

The Department of Agriculture was established under the Ministry of Public Works. The

Department conducted research on cotton breeding, fertilization and water requirements, and

produced and distributed certified cotton seeds.

1932 – ALCOTEXA Founded

The Alexandria Cotton Exporters‘ Association (ALCOTEXA) was founded to develop the

Egyptian cotton trade and act as an arbitration body among exporters, importers, spinners and other

bodies both inside and outside Egypt.

Cotton Arbitration and Testing General Organization (CATGO)

It is neutral supervising cotton organization that serves the cotton sector s dealing with seed

cotton and lint cotton. Some of CATGO services are insuring the purity of Egyptian cotton varieties

and its international reputation, classing and evaluating cotton crop and supervising it throughout all

handling procedures right from picking until baling, determining the moisture content of cotton,

supervising their weights, issuing international authorized certificates, determining the trash level

"contamination", preparing official standard boxes representing the standard grades for all

Commercial varieties and applying the arbitration in its different stages (arbitration, appeal and

counter appeal).

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1971 - Cotton Research Institute

Current activities of CRI concentrate on; Breeding of new cotton varieties superior to the

cultivated ones (yield and quality) to fulfill the requirements of cotton farmers, preserving the

genetic basis used for breeding, developing and improving cotton production practices, defining the

most appropriate zones for each variety, strengthening the ties between research and extension to

better transfer knowledge and technology to farmers, establishing, performing and completing

technological information about the fiber and spinning properties of Egyptian cotton for spinners, as

well as improving the grading and ginning practices.

2000 - Egyptian Cotton Logo Introduced

The Egyptian Ministry of Trade and Industry and ALCOTEXA registered a trademark for

Egyptian cotton, to help consumers recognize the quality of Egyptian cotton products by identifying

those goods bearing the logo, and protect them from misleading labels. The Trade mark is registered

in 26 countries and others still in process. A licensing program and monitoring mechanism are also

enforced.

2005 – Establishment of Cotton Egypt Association

The Egyptian Ministry of Trade and Industry and ALCOTEXA established a nonprofit

association representing the entire supply chain of Egyptian cotton to manage, promote, license and

monitor the usage of the Egyptian cotton and its logo around the Globe. www.cottonegypt.net

EGYPTIAN COTTON TEXTILE INDUSTRY

The new beginning of the Egyptian cotton textiles industry was by the end of the 1920s,

when ―Bank Misra (Bank of Egypt)‖established ―Misra Spinning and Weaving Company‖ at

ELMehalla EL-Kubra. The mill started with 22000 spindles and 484 weaving looms and was

concentrating mainly on coarse counts. The first piece of cloth was produced in 1930. The company

is nowadays the largest textile mill in Egypt and probably the largest integrated textile mill in one

location throughout the world. A sister company ―Misra Fine Spinning & Weaving Company‖ was

established few years later at Kafr-EL-Dawar, near Alexandria, and extremely well equipped

technically for the production of medium and fine counts. In 1938, ―misr-Beida Dyers‖ company

was established. Local consumption increased very rapidly, from about 56 thousand Cantars (2.54

thousand tons) during the 1920s, to 177 thousand Cantars (8.02 thousand tons) in the first half of the

1930s and jumped to 513 thousand Cantars (23.24 thousand tons) by the second half of the 1930s, to

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1 154 thousand Cantars (52.28 thousand tons) by the second half of the 1940s which is equivalent to

16.7% of the total crop. This increase meant that the local industry had become a big client of raw

Egyptian cotton, and thus could relieve export problems if they arose. Also, it altered the

components of the crop available for export (23).

By the end of the Second World War, based on the assumption that there is always a local

market for its products as well as the availability of a local raw material, which sometimes looked as

though it was in burdensome surplus, it ran into troubles. These troubles stemmed mainly from its

obligation to use Egyptian cotton, while a high proportion of its products could be produced, in

competitive countries, from cheaper cottons. The possibility of importing the relatively cheaper

Indian or American cottons for the local mills and export more of the Egyptian cotton has been much

discussed but it was not accepted. The local industry needed tariff protection to be able to compete,

even in its home market, and the government extended this protection.

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INDIAN COTTON TEXTIL INDUSTRY

Indian Cotton Industry's history of establishment has a rich past. English did gradual

inaugurations of a number of beneficial industries in India and the country was opening its eyes to a

whole new era of mechanization. With 19th century India had successfully established major

production industries, owing to the initiative of the British East India Company. Cotton was an

essential staple fabric, which was needed in almost every work of life in India.

Indian Cotton Industry was the precise industry which fostered a humble beginning, attracting

budding Indian industrialists. In 1854 towards making that dream into a reality, James Landon

established the Broach Cotton Mill, the first successful cotton mill in Bombay. The first steam-

driven cotton mill also went into production in 1856. 79 cotton mills were in operation by 1883, as

Bombay took the industrial lead. Establishment of cotton industry was thus an initiation of a new

history. The first mechanized jute mill began operations in Bengal in 1855. Government of India in

October 1861 issued a waste lands order for the purpose of encouraging the growth of cotton. Hugh

Mason, Chairman of the Board of the Manchester Cotton Company in 1862, sought the

impeachment of Sir Charles Wood (1800-1885), Secretary of State for India. Mason felt the

Government of India was holding to a do-nothing policy regarding the provision of greater supplies

of raw cotton to Manchester`s manufacturers. The Lancashire Cotton Industry had emerged

sufficient pressure on the Secretary of State for India to have the Government of India place a 5%

tariff on Indian cotton manufactures in order to allow British cotton goods to be more marketable in

India. 64 jute mills existed in Bengal, with 36,000 looms employing a total of 225,000 workers in

1913.

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Market structure

Market structure in the Egyptian cotton sector

The liberalization has changed the structure of the different areas of the cotton sub sector.

Figure 1 presents the institutional structure before the liberalization begun in 1994.

Figure 1: Approximate institutional structure of the cotton sector in Egypt before

Liberalization

Inputs

Seed Cotton

Seed Cotton

Lint Cotton Lint Cotton

Farmers Public Coop & PBDAC

Co-operative Collections Centers (ca 2000)

Public Trading Companies (6)

Public Ginners (5)

Local textile industry Alcotexa registered traders

World cotton market

Page 7

Ginning and other buying companies

Ginning companies in Egypt as of 2002

Company Public Private

Arabia Ginning X

Delta Cotton Ginning X

El Wady Cotton Ginning X

Misr Cotton Ginning X

Nile Ginning X

International trade

The majority of Egyptian exports go to the USA and the EU and this is particularly the case

within the cotton sector. In the late 1990s, thirty per cent of the cotton was exported to the EU.

The spinning industry

The spinning industry has during the liberalization process started to purchase seed cotton

instead of only lint cotton. The Egyptian cotton is expensive for the domestic spinners to use. In

some cases price discrimination has been used as a measure, meaning lower price on lint cotton for

domestic spinners compared to the price offered to export firms.

Market structure in the Indian Cotton sector

This unique industry structure is primarily a legacy of government policies that have promoted labor

intensive, small-scale operations and discriminated against larger scale firms:

• Cotton farming and harvesting. Cotton is grown in tropical as well as sub tropical area in

India. Mostly the cotton grown in India is from dry lands and crops mostly depend on the irrigation

systems available and not only on the rain water.

• Ginning: Ginning is the process where cotton fiber is separated from the cotton seed. The first step

in the ginning process is when the cotton is vacuumed into tubes that carry it to a dryer to reduce

moisture and improve the fiber quality. Then it runs through cleaning equipment to remove leaf

trash, sticks and other foreign matter. Ginning is accomplished by one of two methods. Cotton

varieties with shorter staple or fiber length are ginned with saw gins. This process involves the use

of circular saws that grip the fibers and pull them through narrow slots. Long fiber cottons must be

ginned in a roller gin because saw gins can damage their delicate fibers.

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• Oil mill: in the operation the oil is extracted from the cotton seeds that are coming from the

ginning process. The cotton seeds coming from the ginning unit are then passed through the pressing

unit and crude cotton oil is produced. The pressed cotton seed oil cake is supplied as the cattle feed.

The crude is further modified as the bio-diesel which could be used as the one of the energy source.

The refined cotton oil is also used as the edible oil but it is proved to be unfit for the human health.

• Spinning. Spinning is the process of converting cotton or manmade fiber into yarn to be used for

weaving and knitting. Largely due to deregulation beginning in the mid-1980s, spinning is the most

consolidated and technically efficient sector in India‘s textile industry. Average plant size remains

small, however, and technology outdated, relative to other major producers. In 2002/03, India‘s

spinning sector consisted of about 1,146 small-scale independent firms and 1,599 larger scale

independent units.

• Weaving and Knitting. Weaving and knitting converts cotton, manmade, or blended yarns into

woven or knitted fabrics. India‘s weaving and knitting sector remains highly fragmented, small-

scale, and labor-intensive. This sector consists of about 3.9 million handlooms, 380,000 ―power

loom‖ enterprises that operate about 1.7 million looms, and just 137,000 looms in the various

composite mills. ―Power looms‖ are small firms, with an average loom capacity of four to five

owned by independent entrepreneurs or weavers.

• Fabric Finishing. Fabric finishing (also referred to as processing), which includes dyeing, printing,

and other cloth preparation prior to the manufacture of clothing, is also dominated by a large number

of independent, small scale enterprises. Overall, about 2,300 processors are operating in India,

including about 2,100 independent units and 200 units that are integrated with spinning, weaving, or

knitting units.

• Clothing. Apparel is produced by about 77,000 small-scale units classified as domestic

manufacturers, manufacturer exporters, and fabricators (subcontractors).

• Composite Mills. Relatively large-scale mills that integrate spinning, weaving and, sometimes,

fabric finishing are common in other major textile-producing countries. In India, however, these

types of mills now account for about only 3 percent of output in the textile sector. About 276

composite mills are now operating in India, most owned by the public sector and many deemed

financially ―sick.‖

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Trade, Production and Consumption of Cotton

Egypt

Year Total production

1000 tonnes

Consumption 1000

tonnes

Productivity kg/fa

1950-59 7.6 1.7 4.3

1960-69 8.4 3.1 4.9

1970-79 9.1 3.1 6.4

1980-89 8.2 6.1 7.7

1990-99 5.9 4.5 7.29

2000-07 4.94 2.7 7.80

(Source: Cotton, June 2012)

(Source: Cottlook, June 2012)

Page 10

The political and economic upheaval that has occurred since the beginning of 2011 has

complicated an already difficult market outlook for Egypt‘s cotton production and has required the

payment of government subsidy to textile mills, so as to absorb some of the domestic supply and

achieve the political imperative of supporting the price received by the farmer.

(Source: Cottlook, June 2012)

In 2010/11, the season‘s export sales were virtually completed by the end of February; the

commitments figure having reached an impressive amount of over 110,000 tonnes. 2011/12, by

comparison, commenced at a predictably more pedestrian pace, which only really began to change as

from the beginning of December 2011, as overseas spinners looked to begin replenishing

inventories. The quantity registered by early June 2012 was comfortably over 76,000 tonnes, and

traders expressed the view that the season‘s total exports might reach around 90,000 tonnes.

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India

Cotton

Year

Area lakh

Hectares

Cotton production Cotton

Yield

Cotton

Consumpt

ion Lakh bales of

170 kg.

In 000 Tonnes

1999-00 87.31 156 2652 304 173.36

2000-01 85.76 140 2380 278 173.03

2001-02 87.30 158 2686 308 171.76

2002-03 76.67 136 2312 302 168.83

2003-04 76.30 179 3043 399 177.10

2004-05 89.20 243 4131 463 194.10

(Source; ICAC)

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SWOT ANALYSIS OF COTTON INDUSTRY

SWOT Analysis of Cotton Industry in Egypt

Strength

Egypt has an unemployment problem, and cotton industry can contribute much in accomplishing a

solution for the problem and with much fewer investments than other sectors.

Egyptian cotton has a relative advantage among world cottons especially Extra Long Staple cottons. A large extent industrial base in cotton industry

Cost Competitiveness.

Weaknesses

Picture: Loose, Poorly Covered Bales of Lint Cotton of the Type Currently

Produced at the Gins.

Spinning sector lacks modernization and there is a need of introducing new technology.

Processing is the weakest link in the Egyptian Cotton textile value chain, adversely affecting its

ability to compete in exports.

High power costs and long export lead times are eroding India‘s export competitiveness across the

textile chain.

Productivity levels for manufacturing various apparel items are far lower in India in comparison with

its competitors.

Lack of Integration.

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Opportunities

Companies need to concentrate on new product developments and increase in production level.

To export large amount of raw cotton.

To maximize the economical return of the unit of cultivated land (Feddan) and the unit of irrigation

water (cubic meter), by increasing the value of production (here we stress on using the monetary or

production in dollars per unit cultivated land and irrigation water. Production by Cantar is not valid

because Egyptian cotton varieties vary widely in lint price) and decreasing production cost.

Threats

There has been an increase in seasons per year which has resulted in shortening of the fashion cycle.

Continuous increasing in production cost.

Low competition abilities of the industrial sectors because of the subsidies provided to their

competitors as in India.

High cotton prices as a result of adopting free trade polices since 1994 which increase the prices of

the textile inputs and consequently a successive decreasing in its production and recently the

decision of India and Pakistan to make an export ban to cotton which in turn affected the

international supply.

The mismatch between the agricultural and industrial sectors as the agricultural sector provides a

high quality of cotton and the industrial sector begins to use a low quality with low prices, so it

began to import its needs.

SWOT Analysis of Cotton Industry in India

Strength

• The country is one of the largest producers of natural and man-made fibers.

• It produces almost 16% of the world production of raw cotton.

• Skilled labour is available in plenty.

• Manufacturing capacity present across the entire range and across entire value chain yarn, fabric,

process house and garments.

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Weaknesses

• Knitted garments manufacturing has remained as an extremely fragmented industry. Global players

would prefer to source their entire requirement from two or three vendors and the Indian garment

units find it difficult to meet the capacity requirements.

• Industry still plagued with some historical regulations such as knitted garments still remaining as a

SSI domain.

• Labour force giving low productivity as compared to other competing countries.

• Technology obsolescence despite measures such as TUFS.

• Low bargaining power in a customer-ruled market.

Opportunity

• Low per-capita domestic consumption of textile indicating significant potential growth.

• Domestic market extremely sensitive to fashion fads and this has resulted in the development of a

responsive garment industry.

• Companies need to concentrate on new product developments.

• Increased use of CAD to develop designing capabilities and for developing greater options.

Threat

• Competition in post-2005 is not just in exports, but is also likely within the country due to cheaper

imports of goods of higher quality at lower costs.

• Standards such as SA-8000 or WARP have resulted in increased pressure on companies for

improvement of their working practices.

• Alternative competitive advantages would continue to be a barrier.

• Due to plenty of labour available human rights may get exploited.

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Porter’s Five Force Model

Porter's Five Forces include three forces from 'horizontal' competition: threat of substitute products,

the threat of established rivals, and the threat of new entrants; and two forces from 'vertical'

competition: the bargaining power of suppliers, bargaining power of customers.

Porter’s Five Force Model in Egypt

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Competitive Rivalry In the traditional economic model, competition among rival firms drives profits to zero. But

competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive

for a competitive advantage over their rivals. The intensity of rivalry among firms varies across

industries, and strategic analysts are interested in these differences.

Private-sector competition remains constrained in the face of lax anti-monopoly enforcement

(106th of 139 countries) and the persistence of large, inefficient SOEs. Widespread corruption and

legacy labour regulations from the Nasser regime also negatively impact the national business

environment.

The structure is heavily biased to spinning and weaving production which is state owned.

Facilities are almost obsolete, organization over manned and highly inefficient. Quality and delivery

of output erratic and inconsistent.

Bargaining Power of Suppliers

Also described as market of inputs. Suppliers of raw materials, components, and services

(such as expertise) to the firm can be a source of power over the firm. Suppliers may refuse to work

with the firm, or e.g. charge excessively high prices for unique resources.

Egypt shows some linkages indicative of a cluster-based economy, with particular strength in

transportation and logistics and a robust tourism cluster. But enforcement of input quality standards

remains lax and availability of some support services is poor despite increases in FDI flows which

might have encouraged cooperation between firms.

Bargaining Power of Customers

Despite boasting the largest population of the MENA countries and occupying a strategic

location in the heart of the Arab world, sophistication of Egyptian demand is weak and consumer

protections are underdeveloped. Consumer purchasing power is adversely affected by on a GDP-per-

capita basis, Egypt ranked 16th

out of its 19 regional peers in 2010. Egypt has consistently

underperformed its peers in per-capita income growth over the past three decades.

Changing societal composition also negatively impacted national demand condition-diverse

ethnic and religious mix shifted over the past 40 years to an almost-exclusively Arab and Muslim

population. An unstable political environment has impelled the exodus of foreign nationals and

much of the country‘s intellectual class, diminishing the sophistication of the Egyptian consumer

market.

. Threat Of Substitutes

In Porter's model, substitute products refer to products in other industries. To the economist,

a threat of substitutes exists when a product's demand is affected by the price change of a substitute

product. A product's price elasticity is affected by substitute products – as more substitutes become

available, the demand becomes more elastic since customers have more alternatives. A close

substitute product constrains the ability of firms in an industry to raise price.

Page 17

Porter’s Five Force Model in India

The Cotton industry is very dynamic in its nature. Things have changed within this industry

very frequently before. Tries explaining this dynamism with the help of well known Porter‘s model

which will conduct an industry analysis of the industry under the radar. ―The collective strength of

these five competitive forces determines industry profitability because they influence the prices,

costs, and required investment of firms in an industry‖. This model is one of the best tools available

for analytical evaluation the competitive nature of the industry. Porter has further said that ―every

industry is unique and has its own unique structure and this five-force framework allows a firm to

see through the complexity and pinpoint those factors that are critical to competition in its industry,

as well as to identify those strategic innovations that would most improve the industry‘s

profitability‖. Hence we can say that the model will be useful in defining the most important forces

those actually define the nature and amount of competitiveness within the industry and will explain

that the way these forces can be deemed to be interconnected with each other. The figure presents the

Porter analysis on Indian Cotton Industry.

According to this model there are five forces which determine the competitiveness of an industry in

the long-run. The five competitive forces are:

Page 18

1. The bargaining power of buyers

2. The bargaining power of suppliers

3. The threat of substitutes

4. The threat of new entrants

5. The rivalry among existing competitors

The bargaining power of buyers

The demand forces inside the industry can be evaluated with the help of bargaining power

which the buyers of the industry possess. According to a 2007 research done, Texsummit the current

international Cotton Industry stands at a value of 52 billion US Dollars. The dominating markets

which define the trend in the business in textiles and clothing in the international scenario are US

and European markets. It is expected, that in future demand for local made clothing and apparel will

rise at a much increased growth rate since it has achieved a competitive edge over and above its

neighbour nations. But in the global scene China will be the supplier which will see more demand

for its supply with respect to India due to India‘s incompetence related to several aspects like

fragmented structure, technological obsolesce, rigid labor issues, lack of skill and training. But due

to the fact that India is one of the lowest cost producer countries, most of the foreign buyers will try

to hedge their risk factors by the process of outsourcing only from one country

(www.equitymaster.com). But Rao has said in his 2008 work that ―put the situation is about to

change, with the government planning several initiatives to boost production of these textiles, and

industry is also waking up to the potential of the segment‖

The Bargaining Power of Suppliers

The bargaining power of suppliers in an industry tries to evaluate the scene of the supply

market of the Cotton Industry. The main raw material of Cotton Industry is cotton. India has always

been a significant producer of cotton and due to this factor it has played a very important role in the

world‘s market for cotton. The Cotton Industry in India achieves cost advantage in the segment of

apparel as well as home textiles with the help of unending supply of local staple cotton which have

been domestically produced. Further, Indian Government and other policy makers have taken

definitive steps for improving the amount and quality of cotton yield for making sure that higher

productivity can be achieved. India has now bypassed the United States and has become the second

largest producer of cotton in the world in the year 2007. The following fig. 3 shows India‘s growing

cotton trend.

Page 19

(Source: ICAC)

The threat of substitutes

The factor of threat of substitutes is dependent upon several different factors. These factors

are the relative price and performance of substitutes, consumers‘ interest in the substitute products

and the cost the consumers‘ have to bear for switching to other substitutes (Porter, 1990). When a

number of good substitutes are available in the market, it cuts down the profitability of a particular

industry as well as the magnetism of the industry due to the necessity of price restriction in the

industry. There are many low cost producing countries like Pakistan and Bangladesh where the labor

cost is very cheap in comparison to other first world countries. These countries pose a threat towards

the India‘s textile export industry. Many researchers have put an emphasis to this point in the past.

The Threat of New Entrants

This factor that is threat of new entrants helps in increasing the competitive nature inside the

industry to a greater level. On the other hand the threat is also instrumental in bringing increased

amount of capacity in the market. The seriousness and effectiveness of the threats posed mainly is

dependent upon the entry or exit barriers which are present in the industry. It further is dependent

upon the way the players who already exist in the industry react to the new entrant (Porter, 1979;

Besanko, 2003). In the case of a quota free economy, all the players try to achieve expansion of

capacity. But the implied result of it is huge number of domestic and small player entering the local

market. This happens due to the fact that they do not possess the capacity to make any impact on the

international scenario.

Page 20

The rivalry among Existing Competitors

The amount of rivalry within the competitors who already exist in the industry is highly

dependent on the following factors: the structure of competition, the structure of industry costs,

strategic objectives, degree of differentiation, entry and exit barriers, and switching costs (Porter,

1990). The rivalry of Indian Cotton Industry, globally, depends upon various factors like; India‘s

poor logistics, fragmented infrastructure and unskilled labor. These all factors are a major thumbs-

down to Indian economy on the global front.

The analysis which was carried out with respect to Porters model is instrumental in summing

up the works done by Porter on the topic of competitiveness which has been immensely helpful in

understanding the literatures which are relevant on this industry. This has proved that despite the

structural inefficiency, the Indian Cotton Industry has vast potential to successfully compete in the

international business.

Page 21

BOSTON Consulting Group

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by

BCG. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation

for an organization to examine different businesses in its portfolio on the basis of their related market

share and industry growth rates. It is a two dimensional analysis on management of SBU‘s (Strategic

Business Units). In other words, it is a comparative analysis of business potential and the evaluation

of environment.

According to this matrix, business could be classified as high or low according to their industry

growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

The analysis requires that both measures be calculated for each SBU. The dimension of business

strength, relative market share, will measure comparative advantage indicated by market dominance.

The key theory underlying this is existence of an experience curve and that market share is achieved

due to overall cost leadership.

BCG matrix has four cells, with the horizontal axis representing relative market share and the

vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. If all

the SBU‘s are in same industry, the average growth rate of the industry is used. While, if all the

SBU‘s are located in different industries, then the mid-point is set at the growth rate for the

economy.

Resources are allocated to the business units according to their situation on the grid. The four cells of

this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells

represents a particular type of business.

Page 22

1. Stars-

Stars represent business units having large market share in a fast growing industry. They may

generate cash but because of fast growing market, stars require huge investments to maintain their

lead. Net cash flow is usually modest. SBU‘s located in this cell are attractive as they are located in a

robust industry and these business units are highly competitive in the industry. If successful, a star

will become a cash cow when the industry matures.

2. Cash Cows-

Cash Cows represent business units having a large market share in a mature, slow growing

industry. Cash cows require little investment and generate cash that can be utilized for investment in

other business units. These SBU‘s are the corporation‘s key source of cash, and are specifically the

Page 23

core business. They are the base of an organization. These businesses usually follow stability

strategies.

3. Question Marks-

Question marks represent business units having low relative market share and located in a

high growth industry. They require huge amount of cash to maintain or gain market share. They

require attention to determine if the venture can be viable. Question marks are generally new goods

and services which have a good commercial prospective. There is no specific strategy which can be

adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else

retrenchment strategy can be adopted. Most businesses start as question marks as the company tries

to enter a high growth market in which there is already a market-share. If ignored, then question

marks may become dogs, while if huge investment is made, and then they have potential of

becoming stars.

4. Dogs-

Dogs represent businesses having weak market shares in low-growth markets. They neither

generate cash nor require huge amount of cash. Due to low market share, these business units face

cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain

market share only at the expense of competitor‘s/rival firms. These business firms have weak market

share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other

strategic aim, it should be liquidated if there are fewer prospects for it to gain market share. Number

of dogs should be avoided and minimized in an organization.

Limitations of BCG Matrix

The BCG Matrix produces a framework for allocating resources among different business units and

makes it possible to compare many business units at a glance. But BCG Matrix is not free from

limitations, such as-

1. BCG matrix classifies businesses as low and high, but generally businesses can be medium also.

Thus, the true nature of business may not be reflected.

2. Market is not clearly defined in this model.

3. High market share does not always leads to high profits. There are high costs also involved with high

market share.

4. Growth rate and relative market share are not the only indicators of profitability. This model ignores

and overlooks other indicators of profitability.

5. At times, dogs may help other businesses in gaining competitive advantage. They can earn even

more than cash cows sometimes.

6. This four-celled approach is considered as to be too simplistic.

Page 24

PEST ANALYSIS

PEST Analyses of EGYPT:-

1) POLITICAL:-

Accordingly, the Government set forth a strategy to develop cotton-dependent industries on a

step by step basis, from “seed to skin”, starting with ginning, spinning, weaving, dying and finishing

industries, followed by the apparel and home furnishing industries and finally marketing and

promotion to achieve high levels of growth for the Egyptian economy.

The Egyptian government‘s newly adopted strategy will assure the availability of Egyptian

cotton for the international market, and local spinners will also have an ability to import cotton to

accommodate their growing capacities. The government has also made a commitment to modernize

spinning, dying and finishing industries to utilize their maximum capacities and to become attractive

for foreign investments, contributing to growth in employment.

2) ECONOMICAL

Egypt has a diversified economy. It has extensive natural and human resources. Key

industries include tourism, petroleum, agriculture, manufacturing and the services sector. The

government is implementing economic reforms designed to encourage private sector investment as

the engine of sustainable economic growth and rising incomes.

With its reputation as the world‘s finest in terms of quality, softness and strength, Egyptian

cotton is the country‘s most important agricultural export. Other top exports include crude oil and

petroleum products, textiles, agriculture, food processed products, furniture, metal products, building

material and chemicals.

Since the 1990s, Egypt has embarked on a series of structural reforms focused on economic

stability, deregulation, privatization, liberalizing trade and foreign investment regimes and

restructuring the banking system. Economic policy offers investors attractive incentives, a freely

convertible and floating currency and a young, skilled workforce. Egypt has also worked to

transform itself into a leader in information technologies and e-commerce in the region.

Under the exchange rate flotation policy, the Egyptian Pound was allowed to find its free

market rate in relation to other currencies, which resulted in more than 50% devaluation in two

years. This step increased the textile sector‘s competitiveness and the demand for its products.

Page 25

3) SOCIAL

Located at the crossroads of Europe, the Middle East and Africa, Egypt has for centuries

been a melting pot of races and cultures – with a tradition of tolerance and hospitality that persists to

this day. While modern Egyptians are largely Eastern Hamitic in origin (Egyptians, Bedouins and

Berbers); small percentages of the population are of Greek, Nubian, Armenian and European

descent.

Egypt‘s capital, Cairo, combines ancient architecture and a cosmopolitan lifestyle. Although

it maintains its own unique culture, Egypt has embraced Mediterranean, French, British and even

American influences. Today, hundreds of thousands of foreigners live and work in Cairo, one of the

world‘s largest and busiest cities.

PEST Analysis of India:-

1) Economic issues

Prices of Cotton

The Minimum Support Prices of Kapas (Seed cotton) for fair average quality announced for

the cotton season 2005- 2006 (Oct – Sept), was fixed at last year‘s level (2004-05) i.e. Rs.1760/- per

quintal for medium staple variety (F-414/J-34/H- 777). The support price for H-4 (Long staple

variety) has been fixed at Rs.1980/ - per quintal, an increase of Rs.20/- per quintal over support

price of 2004-05. The MSP fixed for F-414/H-777/J-34 variety of Kapas will be applicable only to

Rajasthan. The price of this variety, grown in Haryana and Punjab has been fixed keeping in view

the respective quality differential, vis-à-vis Rajasthan, obtaining in these States.

The Cotton Corporation of India Ltd. (CCI) undertook massive MSP operations throughout

2004-05 in all the cotton growing states, and procured Kapas equivalent to lint cotton of 27.52 lakh

bales. In 2004-05, due to favourable seasonal conditions, there was a sharp rise in productivity,

which peaked to a record 463 Kg. Lint/hectare, as compared to 399 kg. / Lint per hectare during

2003-04, the cultivated area increased to 89.20 lakh hectares in 2004-05, as compared to 76.30 lakh

hectares in 2003-04, and the production touched 243 lakh bales in 2004-05, as compared to 179.00

lakh bales in 2003-04.

Page 26

2) Social Issues

Gender impact

Rural women in several smallholder contexts provide substantial labour input to most aspects

of cotton production cycle, frequently as unpaid ‗family labour‘ or low-paid day-labourers and

commonly performing some of the most arduous tasks – with over-representation in manual work

such as picking. _Women in many regions face significant difficulties in gaining access to input

credit facilities, due principally to men‘s ownership of land and other assets, and hence struggle to

achieve economic independence through cotton farming. Decision-making within farming families

in many regions is gender-biased and women are often neglected in decision-making process.

Because of the above, and the increased labour requirements of more ecologically sound farming

cultivation methods, the development of such methods may risk an increase in the labour burden on

rural women workers.

Health and safety

Given the nature of cotton farming work, worker/farmer health and safety is a critical issue in

cotton cultivation: the key risks are that workers – family or hired, depending on regional context –

are exposed to harmful toxins, primarily because they are not provided with – or do not wear –

adequate personnel protective equipment (PPE) while spraying chemical pesticides and herbicides.

_Children are particularly vulnerable to arduous work on cotton farms; however, there are few

reports of children working with toxic materials. _In the context of worker health and safety, special

attention should be given to working conditions in ginneries – work characterised by seasonality,

dust pollution, machine danger and long hours, albeit with differences between regions

Child labour

In several regions, children – including young children – contribute labour to cotton growing;

depending on the age of the child and the nature of the activity – particularly whether it affect the

child‘s health and schooling – this may or may not be acceptable under international standards (ILO

conventions provide for light work for over-12s and make exception for children‘s work on family

smallholdings where produce is for local consumption) _Children are primarily involved in cotton

picking, and to a lesser degree in weeding and nutritional activities. _Key issues are children‘s health

and safety, and access to education (though the latter may depend on factors 11 outside the control of

parents, such as availability of local facilities). _Child labour is difficult to assess and monitor as it is

(almost by definition) informal.

Page 27

Forced Labour / Labour Coercion

Forced labour constitutes a violation of a fundamental international human right – freedom of

employment – and there is little cultural relativity in the debate surrounding its continued use. The

underlying factors that contribute to forced labour and bonded labour include the use of labour

intermediaries providing casual labour under conditions which compromise the workers‘ rights,

recruitment agencies with service fees which can be repaid only by continued work, social exclusion,

often connected to caste or tribe, asymmetric information, whereby illiterate workers are not aware

of their rights, labour migration – particularly ‗irregular‘ migrant workers, who are commonly

unaware but also unable to assert their legal labour rights, as non-registered workers, inequitable

loan or credit schemes managed by the employer; in-kind remuneration, which allows employers to

exacerbate dependent relations and hide low wages

3) Environmental Issues

Low Yields in Cotton

The relatively rapid gains in productivity in the predominately rained Central zone since

1990 are due to technological advances that, if combined with a continuation of recent modest

growth in the North and South zones, could lead to a substantial hike in national average yields and

production. While this productivity gap indicates that significant further on farm yield improvements

are possible, a range of technical, economic, and institutional factors prevent realization of the

potential of the varieties cultivated.

Following are the few factors which contribute towards the low yield:

• Delayed Sowing. Late sowing of cotton reduces yields by providing less optimal sunlight

conditions for crop development and, in some areas, by allowing less time for picking the mature

crop before clearing the field for the following crop. Sowing delays are caused either by the late

arrival of seasonal rainfall needed for sowing or by delays in harvesting the preceding crop. Yield

losses associated with late sowing and shortened harvest times may be reduced by new shorter

duration varieties and better management, but crop competition will likely continue to limit yields in

some areas.

• Monsoon Dependence. Erratic monsoon rainfall affects 60-70 percent of cotton area, reducing

yields through moisture stress and creating risk that reduces investment in seed, fertilizer, and

pesticide inputs. Even with improved varieties and management, average yields in the mostly rained

Central and South zones are likely to remain below those achieved in other countries with more

reliable rainfall.

• Poor Seed Quality. Poor seed quality is a pervasive problem in cotton cultivation. Only about 35

percent of cotton area is sown with certified seed with assured varietal purity and germination.

Page 28

Commercially available seeds are often of poor quality, with sale of uncertified, substandard, and

second generation (F2) hybrid seeds not uncommon. Although supplies of certified seed are

generally available, financial constraints lead most farmers to use retained seeds or lower priced

uncertified seeds from the market.

The proliferation of cotton varieties in markets and farmers‘ fields confounds efforts to improve seed

quality, maintain varietal purity, and improve crop management practices. Roughly 100-130 cotton

varieties developed in both the public and private sectors are now cultivated in India. A study by the

Central Institute for Cotton Research (CICR) indicates that the average cotton farmer 12 in the

Central and South zones plants 3-4 varieties on farms averaging about 2 hectares, a practice that

greatly complicates crop and seed management.

• Plant Protection. Insect and disease infestations, including bollworms, white fly, jassids, and leaf

curl virus, are significant problems in India‘s three cotton production zones. Although per hectare

use of pesticides is higher for cotton than for any other crop, effective plant protection is constrained

by poor farm management, pesticide subsidies that encourage indiscriminate use, and problems with

pesticide quality. Improved on farm pest management practices, including appropriate crop rotations,

pest surveillance, pesticide applications, and adoption of Integrated Pest Management (IPM)

practices have proved difficult to implement on small, resource constrained farms.

• Crop Management. Large gaps between average on farm yields and the potential of existing

Varieties also stem from poor management practices, including use of inappropriate varieties, seed

rates, seed spacing, and fertilizer dosages. As in the case of plant protection, improvement of crop

management practices is complicated by the need to extend recommended practices to large numbers

of small, limited-resource farmers.

• Lack of Suitable Varieties. Cotton yields are affected by lack of varieties— or genotypes—

suitable for some agronomic conditions. Indian scientists cite three priorities for plant breeding

efforts: (1) higher yielding, short-duration, and pest-resistant cultivars for the irrigated North zone,

(2) higher yielding varieties for the drought-prone Central zone, and (3) varieties suited for the soils

on rice fallow common in the South zone.

4) Technical Issues

Slowed growth in cotton production during the late 1990s, together with the opportunity created

by the termination of the MFA, raised the priority for addressing factors that constrain cotton production

and quality in India. In 2001, the Government established the high-level Technology Mission on Cotton

(TMC) to direct, coordinate, and fund initiatives to raise the productivity and quality of Indian cotton

and strengthen returns to growers. TMC activities focus on four program areas, including (1) research

and technology generation, (2) transfer of technology to farmers, (3) improvement of marketing

infrastructure, and (4) modernization of gins. Although it is too early to evaluate TMC impacts on

research and extension, progress in improving market facilities and, particularly, cotton gins is evident

in cotton-producing areas.

29 | P a g e

COMPETITIVE ADVANTAGES OF EGYPT :-

Competitiveness and Future Challenges

The Analysis of the competitiveness and challenges facing the industry, its strengths

and weaknesses may be done by considering the competitive structure of the industry,

the characteristics of its factors of production and the nature of government

intervention and support.

On the international level, the Egyptian cotton industry has a potential competitive

advantage and therefore the Ministry of Foreign Trade will be launching soon an

international promotion campaign for its Egyptian Cotton Logo, a trade mark that

guarantees authenticity and quality. The campaign will run under the slogan

“Egyptian Cotton …..feels like nothing else in the world”.

Egyptian Cotton Industry has following competitive advantages:

Preferential Customs Treatment for Egyptian Yarn Exports to the EU, USA, and

Arab Countries.

Free Zones in Egypt Offer Further Advantages in Both the Investment Stage

(Exemption from Sales Tax on Machinery) and the Operating Stage (Simple Clearing

of Incoming and Outgoing Goods).

Easy Access to the World Renowned ELS and LS Egyptian Cotton at relatively low

costs.

- No Special Pressing, Wrapping, Transport and Transaction Costs for Exporting from

Egypt and Clearing in Destination.

Availabilty of Least Cost Labour

- Well Educated, Easily Trainable and Willing to Work Night Shifts Enable

Mills to Run Over 8600 Hours in a Year.

Proximity of Egypt to Final Destinations in Europe

30 | P a g e

TOP COMPANIES IN EGYPT

Aldcroft Cotton Ltd.

Eastern Cotton Company

Benha Cotton Trading Co.

Egycot Co.

31 | P a g e

Performance and Comparison of

Egypt and India India has become a cotton surplus country in the past few years, something which

seems set to continue in the long term. Export volume has risen from the negligible level of

50,000 bales (170 kilos each) in 2000-01, to an estimated 12,500,000/13,000,000 in 2011-12.

The share of production going for export has risen from one percent in 2000-01 to 37% in

2011-12.

32 | P a g e

Share of Cotton Suppliers

Here, this chart indicates that in US there are higher suppliers of cotton about 31%

and in Egypt 24% cotton supplier‘s is high as compare India is 15%. No Special Pressing,

Wrapping, Transport and Transaction Costs for Exporting from Egypt and Clearing in

Destination.

33 | P a g e

Conclusions

The structure of the Egyptian cotton industry has changed. This can mainly be seen

through the number of players participating on the market and the increased freedom

of choice for the actors. The private sector is fairly well established in all parts of the

cotton production process, from input market to marketing and exporting the cotton.

The public share of the market is decreasing. The Egyptian cotton sector could now be

described as something in-between a concentrated market system and one with

numerous small players.

Regarding the performance, the cotton sector in Egypt has done pretty well.

The production has stayed on the same average level but the yield has increased.

Other merits are increased prices and farmers‘ share of the final export price. Also the

export is greater today than what it was before the reform. Egypt has reached both

increased competition and been able to coordinate the market, but still a lot has to be

done. With this new structure that the reform has created, the Egyptian cotton sector

could be more competitive than what it is today. To increase the competition, all the

actors on the Egyptian cotton market have to be aware of the structural changes made

thanks to the liberalization, something that requires effort concerning market

information. To continue the unsuccessful process of privatization is another measure

in order to enhance competition, like to stop the discrimination between private and

public firms.

The quality of Egyptian cotton was not the best during the first years of

liberalization. However both the GOE and private actors have taken good initiatives in

order to improve and maintain the quality of Egyptian cotton and the situation has

improved. To come further in this process even better coordination is demanded.

Since price still is the most important factor deciding about a company‘s or a

country‘s competitiveness Egypt has to work harder in order to have a chance at the

new tougher global market. Quality is their most important attribute of Egyptian

cotton and this is why grading and quality controls must be highly prioritized.

Another step in improving the competitive situation is to privatize the 41

coordination, something that has to be done with caution. Alcotexa is one institution

for which serious changes in coordination must be made.

Conclusively it can be established that Egypt has succeeded in improving both

the competitive situation and the coordination within the sector, even though there

still is a long way to go to be fully liberalized. It has been shown that there in some

cases exists a trade-off between the coordination and competition, for example when

taking action in order to improve quality. A high number of firms often involve higher

degree of competition while it complicates the coordination of quality enhancing

measures. In other cases it seems like competition and coordination actually can go

34 | P a g e

hand in hand, for example when coordinating the number of cotton varieties in order

to increase competition at the gins and in the case of impersonal coordination carried

out by private actors.

India is one of the leading producers of cotton, goatskin and cashmere wool. It

ranks top in goatskin and third in cotton after China and United States. The fabric

industry in India accounts for about 20% of total exports of the country and represent

the largest net foreign exchange earner.

The main cotton producing states are Maharashtra, Gujarat, Andhra Pradesh,

Madhya Pradesh, Punjab, Haryana, Rajasthan, Karnataka and Tamil Nadu. Of these,

Maharashtra alone accounts for 35 % of the total cotton production. Cotton is one of

the major cash crops grown in the country. In 1998-99, it was estimated that the area

under cotton cultivation in India was 92.87 lakh hectares (Ministry of Textiles –

Annual Report 04-05). However, the area under cotton has been decreasing over the

last few years and provisionally it is estimated that it is approximately 89.69 lakh

hectares in 2004-05.

India has progressed substantially in improving both production and

productivity of cotton over the last five years, transforming from a net importer of

cotton, to becoming one of the largest exporters, shipping 5.5 million bales in 2010-

11, second only to the USA.

To meet the current demand as well as address the demand growth in the

future, the value chain of cotton has to be improved. This is possible through

appropriate input management, improved supply chain management, backward

linkages, and standardization of trade practices and achieving economies of scale by

incorporating sustainable agricultural practices.

ix | P a g e

Bibliography

http://www.indianmirror.com/indian-industries/cotton.html

www.cottonegypt.net

http://www.worldcotton.com/cotton_prices/minsuprta.html

http://www.cotton.org/wjp/cp_egypt.htm

http://www.cotton.org/wjp/cp_egypt.htm

ww.mfa.gov.eg

www.mfti.gov.eg

www.eeaa.gov.eg

http://www.factfish.com/egytec.html

http://www.nationmaster.com/compare/Egypt/India/Economy

http://www.ifitweremyhome.com/compare/EG/IN

http://www.aneki.com/comparison.php?country_1=India&country_2=Egypt

http://www.economywatch.com/world_economy/egypt/indo-egypt-trade-relation.html

http://www.tradingeconomics.com

http://www.wiki.egypt

http://www.tradingeconomics.com

A

Global Country Study Report On

ENVIRONMENTAL FACTORS & LEGAL FACTORS OF EGYPT

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

MASTERS OF BUSINESS ADMINISTRATION

GUJARAT TECHONOLOGY UNIVERSITY

2011-2013

DEPARTMENT OF MANAGEMENT

K.P. PATEL SCHOOL OF MANAGEMENT & COMPUTER STUDIES,

Approved with all India council for Technological Education, New Delhi

Affiliated with Gujarat Technological University, MBA Jeevanshilp Campus, Kapadwanj-387620(Gujarat)

SUBMITTED BY: 1.Dhaval Shah (117240592005) 2.Ripal Gadhvi(117140592015) 3.Madhvi Prajapati(117240592020) 4.Bhargavi Patel(117240592014) 5.Nisha Chaudhari(117240592018) 6.Nidhi Patel(117240592012)

GUIDED BY: Ms. Disha Bhagat (Assistant Faculty)

Students’ Declaration

We Dhaval Shah, Ripal Gadhavi, Nidhi Patel, Nisha Chaudhry, Bhargavi Patel, Madhvi Prajapati hereby declare that the report for Global Country Study Report entitle “Environmental Factors & Legal Factors of Egypt” is a result of our own work & our indebtedness to other work publications, references, if any have been duly acknowledged. Place: - Kapadwanj Date: - 19th Nov. 2012.

Dhaval Shah Ripal Gadhavi Nidhi Patel Nisha Chaudhry Bhargavi Patel Madhvi Prajapati

PREFACE

This project report entitled “Global Country Study Report (Egypt)” has

been submitted to Gujarat Technological University, Ahmadabad in partial fulfillment for the

award of degree of Master of Business Administration. We, the undersigned hereby declare that

this report has been completed by us under the guidance of Ms. Disha Bhagat (K.P Patel School

of Management and computer studies. Kapadwanj)

This Project Report is useful to the Academicians, to the Researchers, with

respect to various aspects to find out the very important Results in their fields.

The report is entirely the result of our own efforts and has not been submitted

either in part or whole to any other institute or university for any degree.

ACKNOLEDGEMENT

We would like to express our deep feeling of gratitude to the under mentioned officials for their assistance, guidance and inspiration before and throughout the project. .

We are obliged to her for providing us with a clear basis to start the project and for providing valuable feedback during the course of this project without which the study would not have been possible.

Special thanks to respected Ms. Disha Bhagat, our project coordinator, our project faculty, for

providing us a proper way to walk on, for providing help and guidance throughout the project.

They have always been the source of encouragement. They have ceaselessly guided us in all

aspects of the project, with their abundance amount of experience and finer ideas.

We thank everybody who directly or indirectly helped us in this project to make it successful.

Executive Summary

Egypt having a climate which is warm at day time and cool at a night time.

In the coastal regions, daytime temperatures range between a minimum average of 14

°C (57 °F) in winter and a maximum average of 30 °C (86 °F) in summer.

In desert regions the temperature varies greatly, especially in summer; it may range from 7

°C (44.6 °F) at night, to 40 °C (104.0 °F) during the day. While the winter temperature in deserts

does not fluctuate as wildly, it can be as low as 0 °C (32 °F) at night, and as high as 18

°C (64.4 °F) during the day. Hot and dry Khams in winds blow in the Nile Delta region.

The climate in Egypt is Mediterranean on the Alexandria coast, semi-desert at the latitude of

Cairo, and completely desert in the South. The ideal moment to visit the country is in the

autumn, between September and November, when the weather gets colder in Europe but Egypt

remains warm. Temperatures vary between 25 and 35°C from North to South. The winter is a

good time to visit for people who can not bear temperatures above 30°C but may disappoint

those who expect a sunny stay. During that season, it is careful to take a warm jacket if you are

staying in Cairo as there is almost no heating in the country.

The climate change in Egypt results in three major out comes: 1. Rising sea level

2. Drought and

3. Loss of agriculture land

Effect of climate change on the life of Egyptian

The Egyptian people are spread out in world country. The all Egyptian not having the

fertile land except the small area around the Nile River.

The Nile River is requiring for the survival of the Egyptian people avoided in the country

is a3% of the space.

The Nile is continuously heating and no person is capable to stop it all the people of

Egypt was affected from the ancient of the Egypt .the poor people of low social status

depending on farming to the scribes.

For the protection of heat Egyptian made their houses of big window to catch a all

possible breeze.

In the Egypt the season of winter is slightly cooler than summer. The Egypt’s climate is

totally different.

Egypt has two seasons while in other place there were four season typically. Egypt

experience a mild winter between the months.

A change in a climate condition of Egypt affects the water supply and food between

Egyptian people.

Increase the scare city of water threatening the development of Egyptian people.

The domestic fisheries of Egypt, face increased the risk, Egyptian import more and more

fishes from other nations.As per the recent information and data on the dangers.

Ecosystem means as a community of organism living in a particular environment and the

physical element with they interact. Ecosystem includes the interaction of soil, water

light, inorganic neutrino and weather, plants animals, and micro organism usually

categorized as either producer or consumer and anthropogenic components.

An ecosystem can be small or large. Ecosystem is a required foe the survival of the

human life. It make a human life prospers. Climate is a one of the part of ecosystem.

Climate change is effect a ecosystem. Ecosystem plays an important role in the growth of

human life. The increase and decrease in the population is also affect the ecosystem.

The Egypt is having following wildlife.

Climate change have a significant impact on the human health & life. The some changes

in climate have a positive effect while some changes the dangerous for a human life.

The global worming have a greater impact on the life of human health, from last two

tears there is a impact of global worming on human life.

The global worming cause skin cancer.

vi

The Effect of Global Worming on Human Health

- The global worming have a greater impact on the life of human health, from last two

years there is a impact of global worming on human life.

- The global worming cause skin cancer.

Examples:

The 2003 European heat wave — involving temperatures that were 18°F (10°C) above

the 30-year average, with no relief at night — killed 21,000 to 35,000 people in five

countries. Starting in August 2003, it caused more than 14,800 deaths in France.

Belgium, the Czech Republic, Germany, Italy, Portugal, Spain, Switzerland, the

Netherlands, and the UK all reported excess mortality during the same period, with total

deaths in the range of 35,000. In France, deaths were massively reported for people aged

75 and over (60%).

Heat waves were also reported in 2003 in Andhra Pradesh, India, and caused the deaths

of 3,000 people

In July 1995, a heat wave killed more than 700 people in the Chicago area alone. Studies

based on these types of statistics estimate that in Atlanta, for example, even a warming of

about two degrees (F) would increase heat-related deaths from 78 annually now to

anywhere from 96 to 247 people per year.

Various Infectious Diseases: Like malaria and West Nile virus, dengue fever, which

comes in four strains, is also spread by mosquitoes. However, unlike malaria, dengue fever

is increase by mosquitoes that thrive in urban areas (Nelson, 2009). An infection by one of

four strains will create protection to only that strain, and will sadly increase the chances of

infection by another strain (Ibid). Rodent-borne disease are carried by rats, mice, bats, or

other rodents. There is proof that diseases transmitted by rodents sometimes increase during

heavy rainfall and flooding because of altered patterns of human–pathogen–rodent contact.

Floods are frequently followed by disease clusters: downpours can drive rodents from

burrows, deposit mosquito-breeding sites, foster mushroom growth in houses, and flush

pathogens, nutrients, and chemicals into waterways.

Vector borne disease are infection transmitted by the bite of infected arthropod specs such as

mosquitoes, ticks, thiatomine, buys, sand.

Various strains of hantavirus have become worrisome for Europe, Spain, and Portugal, most

of Italy, Greece, and western Russia. In 1997, over 9,000 people contracted the virus and 34

cases were terminal (Clement, et al. 2009). Nephropathies epidemical (NE), a disease caused

by Hantavirus, has increased from a handful of cases annually in the 1980s to an average of

300 cases per year within the past three years (Weinhold, 2009). Before investigations could

begin, researchers needed to understand why NE rose suddenly in Belgium, Germany,

France, Luxembourg, and Netherlands in 2005 (Dixon, 2009). Several studies associated the

outbreaks with bank voles, but the precise link was uncertain (Dixon, 2009). Clement et al.

(2009) examined the possible link between temperature and precipitation with observed NE

in Belgium.

As mast seed is the staple food of the bank vole, an abundance of mast would mean a large

supply of food for the rodent, thereby increasing the survival rate and encouraging earlier

breeding throughout the winter (Clement, 2009). Seed production had already been linked to

outbreaks of the rodent population. So what was causing high mast production? Mild winters

(Ibid). Clement et al. (2009) exposed a pattern where mild winters caused incidences of high

mast production, which would associate an increase in bank vole population for that winter

and the next spring. Peaks of NE in human populations can be seen in the year following one

with high mast production (Ibid).

Cases of TBE increased by 400% in the last 30 years (Rizzoli, 2009). Transmitted by hard

ticks of the Ixodes ricinus species, the disease requires a relative humidity of 80% to avoid

desiccation (Grey, 2008). In areas of good cover and undergrowth, the soil outside still

remains moist throughout the dry periods, and promotes the endurance of the disease (Ibid).

In Sweden, tick abundance correlates with mild winters and extended spring and autumn

seasons (Ibid).

In northern Europe, forest and nature management has changed; climate conditions have

changed, and there has also been a 2000% and 5000% increase in Roe and Red Deer

populations respectively (Rizzoli, 2009). The study done by Rizzoli et al. (2009) includes

several hypotheses of factors in this amazing population boom, such as the conversion of

coppices (cut woodlands) to high stand forest and the mass of deer to population of ticks.

However, the correlation between deer density and forest composition was irrelevant; in its

place, it may be that small mammals are benefiting from the forest symphony change (Ibid).

Alternative views include the observation that the rise in TBE was really due to the fall of

communalist rule at the end of the 20th century as there was a go down in public health

measures, economic development and land use, international travel and trade, technology

and industry, human demographics and behavior, and microbial edition and change

(Randolph, 2007).

In the Baltic region specifically, although conditions are similar, there were still differences

in the patterns of changes in TBE incidence since the early 1990’s (Randolph, 2007).

Agriculture shifted from large scale to small scale, which meant that conditions were more

livable for rodents. There was also less insect repellent use.

Like most diseases, tick-borne encephalitis is caused by multiple factors. More studies need

to be conducted to decide the specific links between the spread or sharing of TBE and the

close habitat and hosts as related to climate change.

Laws in Egypt The discrimination is to be find in Egypt for social life and other aspects. According to the

Constitution, the President should be the Muslim because the Muslim religion is the foundation

of Egyptian legislation. All the high posts in the military and others are filled only with Muslim.

No Christians can attain high office in tribunals. Consumer Rights is Right to safety and health

upon the abnormal use of the products, Right to obtain correct information, Right of selection of

the favorable products or services from the market, Right to join any council, organization,

association, Right to take legal action against any types of violation, exploitation.

- The law was not successful because the Govt. is not gave his necessary support in

implementation of law.

- This law is not successful in eliminate the discrimination due to lack of Govt. Support

And legal standard necessary for equality.

- The law was not promoted and safeguards the right of women and girls.

- Now women can apply all accordance with international and regional human rights and

standard for justice at all level.

The Consumer Protection Law Privodes by private or public legal persons including Second

hand commodities offered by suppliers.

- Any person who is offered the product or services for personal or familiar satisfaction is

know as consumer.

- The consumer protection agency is to be established by the provision of this law.

- Non-profit organization and association established and declared under this law.

- Consumer Rights;

Right to safety and health upon the abnormal use of the products.

Right to obtain correct information.

Right of selection of the favorable products or services from the market.

Right to join any council, organization, association.

Right to take legal action against any types of violation, exploitation.

On the transaction of the consumer, the supplier should give the proper invoice to

the consumer.

The supplier should give the proper and adequate information which is asked by

the consumer.

The supplier can save the consumer by any types of defect in the goods oe

services by complain to the agency.

The supplier is liable to pay the refund to the consumer for the damage or any

other faults in the products.

- Objectives of the Consumer Protection Agency;

1. Set the work plan to protect the consumer’s rights and the further confirmation.

2. Receive and confirm the complaints made by the consumer and association.

3. Study the suggestions sent to the agency concerning consumer’s rights.

- According to the article 18, all the person who is working for the agency shall be

prohibited from releasing or also disclosing any data or information and also the source

or information or data.

- The data and source of data should not be used for other purpose rather than for which

they were given.

- According to article 19, if any agency violate any provision of this law the agency is

removable within a prescribe limit by this law by the agency’s board of directors.

- According to article 20 of consumer protection law, all agencies have to prepare their

own budget and implement and it come to end as per state fiscal year.

- According to article 21, employee working at the agency should have the right to see all

ledger and documents at any government and non-government entity. They have a right

to take any information and data which is required to inspect the cases referred to agency.

- According to article 22, this article said that the resolution by the agency for the

implementation of the provision of the law will be the final. The resolution passed by the

agency should not the part or subject to the provision of the law no. 7 of 2000 which is

concerning the establishment of the conciliation committee in some disputes which is the

ministry and other public law entity are parties to.

- According to article 23, the association made for the consumer’s should have to work

without any prejudice under the law consumer protection association or the special union

shall prohibited from receiving any type of donation financial aid from the supplier or the

advertiser.

- According to article 24, the person who is violate the article 3, 4, 5, 6, 7, 8, 11, 18, and 23

shall be punished or fined some of not less than 5000 to not more than one hundred

thousand Egyptian pound.

If the sales is to be made in installments than the supplier should give the below information to

the consumer;

1. The entity provided the product by installment.

2. The price of the product if paid totally in cash.

3. The terms of the installments.

4. The entire cost of the sales.

5. The number and value o fetch installments.

6. The sum to be paid in advance if applicable.

Antitrust law adopted by Egypt before the five year with the issuing 3/2005 to maintain the

competition and to remove the monopoly in the market. The problem with the law is protecting

the competition itself is difficult to understand for Egyptian. In the year 2009, the Egyptian

competition authority received eleven complaints and two request that they have to expand

regulation. In the present law the monopolistic practices define only theoretical term which put

the average Egyptian into confusion that hoe to use the law to their benefits.

Employment Law;

if foreigners want to work in Egypt they required to take the permission. The now Egyptian labor

law widely known by law no. 12 of 2003 which is provides that employer should employ the

employee to see its ability for work up-to three months and after that if he find that employee is

suitable for work than a contract is definite or otherwise infinite period of time.

The law prescribed the maximum work in hours is 8 of 24 hrs not included overtime and rest

&meal time and law also said that employee must have to take the rest in every week which must

not less than 24 hrs. The employee also have a right to get twenty one days of annual paid

vacation after that completion of one year of his work and fifty days after ten years of working

on reaching the age of fifty.

Also the law gives right to employee to take early to take leave, and the general rule that they

entitled to six months, six leaves the pay of seventy five to eighty five percent of their normal

wage. The provision for overtime is 35 percent of normal wage for daylight, 70% work at night

and 100% for wage time.

Health & Safety Law provides The organization’s top management has to authorize an OH&S

policy stating the organization’s OH&S objectives and its commitment to continual

improvement. There are other requirements covering, for example, communication and review of

the policy.

Organizations have to have procedures for risk assessment an risk control and use the outputs

from these procedures in setting OH&S objectives. There is also a list of criteria which must be

met by the hazard identification, risk assessment and risk control procedures Organizations must

keep up to date records of the legal and other OH&S requirements which apply to them, and

ensure access to details of these requirements. The requirements must also be communicated to

employees and other relevant interested parties.

Table of Content

Sr.No. Particulars Page 1. Student’s Declaration 2. Prefece I

3. Acknowledge II 4. Executive Summary Environmental and weather condition of Egypt 1

5. Climate Condition on Egept 2 6. The climate change in Egypt results in three major out comes 3 7. Effect of climate change on the life of Egyptian 4

8. Ecosystem & Wildlife 5

9. Human Health 8

10. The Effect of Global Worming on Human Health 8

11. Various Infectious Diseases 9

Laws in Egypt 13

12. Discrimination Law 14 13. The Consumer Protection Law 15 14. Antitrust law 18

15. Employment Law 19 16. Health & Safety Law 20 17. BIBLIGORAPHY Iv

Environmental and weather

condition of Egypt

Egypt having a climate which is warm at day time and cool at a night time.

In the coastal regions, daytime temperatures range between a minimum average of 14

°C (57 °F) in winter and a maximum average of 30 °C (86 °F) in summer.

In desert regions the temperature varies greatly, especially in summer; it may range from 7

°C (44.6 °F) at night, to 40 °C (104.0 °F) during the day. While the winter temperature in deserts

does not fluctuate as wildly, it can be as low as 0 °C (32 °F) at night, and as high as 18

°C (64.4 °F) during the day. Hot and dry Khams in winds blow in the Nile Delta region.

Egypt receives less than 80 mm (3.15 in) of precipitation annually in most areas, although in the

coastal areas it reaches 200 mm. It hardly ever rains during the summer.

Climatic conditions in Egypt

The climate in Egypt is Mediterranean on the Alexandria coast, semi-desert at the latitude of

Cairo, and completely desert in the South. The ideal moment to visit the country is in the

autumn, between September and November, when the weather gets colder in Europe but Egypt

remains warm. Temperatures vary between 25 and 35°C from North to South. The winter is a

good time to visit for people who can not bear temperatures above 30°C but may disappoint

those who expect a sunny stay. During that season, it is careful to take a warm jacket if you are

staying in Cairo as there is almost no heating in the country. Spring occurs rather late (March-

April) and does not really constitute a transition season because summer arrives quickly. It is

usually a windy period, especially with the khamsin (a hot sand wind which blows two or three

times during the season). Temperatures are very high in the summer. You will have to adapt the

program of your days by beginning very early in the morning and making a pause in the middle

of the day.

The climate change in Egypt results in three major out comes: 1. Rising sea level

2. Drought and

3. Loss of agriculture land

The ice making also contribute to increasing the grater level of sea in Antarctic and green

land. If the temperature is increased that will expand the water level of ocean. The

increased level of water affects the law leveling area like Netherlands and Bangladesh.

The million of area is affected by the danger of flooding, so many people loss their home

due to flood.

So many crops due to affected by changes in the climate. The crop of wheat and rice

require to good a high temperature while maize and sugarcane require a cool climate.

The change in climate decides the growth of plants.

In some time the weather change affect the many countries, crops and it lead to that

country not having enough food. Change in climate will also affect the gain of the

countries. In some countries it will be more gain while in other countries it will bring a

less gain.

Climate takes a place in our daily weather also; the climate change will also affect the

animals also.

The change in climate condition of Egypt leads to move the population inland to avoid

the damages from flooding. The Egypt has to decide that how it will manage a climate

change to avoid a damage.

Effect of climate change on the life of Egyptian The Egyptian people are spread out in world country. The all Egyptian not having the

fertile land except the small area around the Nile River.

The Nile River is requiring for the survival of the Egyptian people avoided in the country

is a3% of the space.

The Nile is continuously heating and no person is capable to stop it all the people of

Egypt was affected from the ancient of the Egypt .the poor people of low social status

depending on farming to the scribes.

For the protection of heat Egyptian made their houses of big window to catch a all

possible breeze.

In the Egypt the season of winter is slightly cooler than summer. The Egypt’s climate is

totally different.

Egypt has two seasons while in other place there were four season typically. Egypt

experience a mild winter between the months.

A change in a climate condition of Egypt affects the water supply and food between

Egyptian people.

Increase the scare city of water threatening the development of Egyptian people.

The domestic fisheries of Egypt, face increased the risk, Egyptian import more and more

fishes from other nations.As per the recent information and data on the dangers.

Ecosystem & Wildlife - Ecosystem means as a community of organism living in a particular environment and the

physical element with they interact. Ecosystem includes the interaction of soil, water

light, inorganic neutrino and weather, plants animals, and micro organism usually

categorized as either producer or consumer and anthropogenic components.

- An ecosystem can be small or large. Ecosystem is a required for the survival of the

human life. It make a human life prospers. Climate is a one of the part of ecosystem.

- Climate change is effect a ecosystem. Ecosystem plays an important role in the growth of

human life.

- The increase and decrease in the population is also affect the ecosystem.

- The Egypt is having following wildlife.

Invasive Species and Climate Change

Whales: Even Giants Aren't Safe

Beetle-Battle: A Threat to the World's Forests

Film Sparks Discussion of Penguins' Fate

Climate Change Threatens Reindeer and Arctic People

Will Climate Change Wipe Out the Polar Bear?

Where Will All the Fish Have Gone?

Flying is No Escape: Migratory Birds

Seals and Their Race Against Climate Change

Marine Oases in Collapse

Human Health - Climate change have a significant impact on the human health & life. The some changes

in climate have a positive effect while some changes the dangerous for a human life.

The Effect of Global Worming on Human Health - The global worming have a greater impact on the life of human health, from last two

years there is a impact of global worming on human life.

- The global worming cause skin cancer.

Examples:

The 2003 European heat wave — involving temperatures that were 18°F (10°C) above

the 30-year average, with no relief at night — killed 21,000 to 35,000 people in five

countries. Starting in August 2003, it caused more than 14,800 deaths in France.

Belgium, the Czech Republic, Germany, Italy, Portugal, Spain, Switzerland, the

Netherlands, and the UK all reported excess mortality during the same period, with total

deaths in the range of 35,000. In France, deaths were massively reported for people aged

75 and over (60%).

Heat waves were also reported in 2003 in Andhra Pradesh, India, and caused the deaths

of 3,000 people

In July 1995, a heat wave killed more than 700 people in the Chicago area alone. Studies

based on these types of statistics estimate that in Atlanta, for example, even a warming of

about two degrees (F) would increase heat-related deaths from 78 annually now to

anywhere from 96 to 247 people per year.

Various Infectious Diseases Vector borne Disease

Vector borne disease are infection transmitted by the bite of infected arthropod specs such as

mosquitoes, ticks, thiatomine, buys, sand.

Dengue Fever

Like malaria and West Nile virus, dengue fever, which comes in four strains, is also spread by

mosquitoes. However, unlike malaria, dengue fever is increase by mosquitoes that thrive in

urban areas (Nelson, 2009). An infection by one of four strains will create protection to only that

strain, and will sadly increase the chances of infection by another strain (Ibid).

Rodent-borne Diseases

Rodent-borne disease are carried by rats, mice, bats, or other rodents. There is proof that

diseases transmitted by rodents sometimes increase during heavy rainfall and flooding

because of altered patterns of human–pathogen–rodent contact. Floods are frequently

followed by disease clusters: downpours can drive rodents from burrows, deposit mosquito-

breeding sites, foster mushroom growth in houses, and flush pathogens, nutrients, and

chemicals into waterways.

Hantaviruses

Various strains of hantavirus have become worrisome for Europe, Spain, and Portugal, most

of Italy, Greece, and western Russia. In 1997, over 9,000 people contracted the virus and 34

cases were terminal (Clement, et al. 2009). Nephropathies epidemical (NE), a disease

caused by Hantavirus, has increased from a handful of cases annually in the 1980s to an

average of 300 cases per year within the past three years (Weinhold, 2009). Before

investigations could begin, researchers needed to understand why NE rose suddenly in

Belgium, Germany, France, Luxembourg, and Netherlands in 2005 (Dixon, 2009). Several

studies associated the outbreaks with bank voles, but the precise link was uncertain (Dixon,

2009). Clement et al. (2009) examined the possible link between temperature and

precipitation with observed NE in Belgium.

As mast seed is the staple food of the bank vole, an abundance of mast would mean a large

supply of food for the rodent, thereby increasing the survival rate and encouraging earlier

breeding throughout the winter (Clement, 2009). Seed production had already been linked

to outbreaks of the rodent population. So what was causing high mast production? Mild

winters (Ibid). Clement et al. (2009) exposed a pattern where mild winters caused

incidences of high mast production, which would associate an increase in bank vole

population for that winter and the next spring. Peaks of NE in human populations can be

seen in the year following one with high mast production (Ibid).

From 1985 to 2007, there

were a total of 2,048

registered NE cases. Of the

1,678 cases within a 12 year

period from 1996-2007, 828

or 49.34% occurred in the

last three years

(Clement, 2009).

According to data

from before 1990, low incidences of NE were most likely due to low medical awareness,

but after 1990, 3 year peaks of NE would show, and since 1999, 2 year peaks.

Other factors that cause a higher rate of NE include an increase in human outside activity

that results in closer contact with bank voles (Clement, 2009). For those who live or work

in the forest or cut and handle firewood, risk of contact is also increased (Ibid).

The trends of incidences of NE display that infectious diseases are affected as climate

change alters conditions for disease-carrying organisms, such as the bank vole.

Tick-borne Encephalitis (TBE)

Cases of TBE increased by 400% in the last 30 years (Rizzoli, 2009). Transmitted by hard

ticks of the Ixodes ricinus species, the disease requires a relative humidity of 80% to avoid

desiccation (Grey, 2008). In areas of good cover and undergrowth, the soil outside still

remains moist throughout the dry periods, and promotes the endurance of the disease (Ibid).

In Sweden, tick abundance correlates with mild winters and extended spring and autumn

seasons (Ibid).

The altitude distribution of the disease has changed in past decades (Grey, 2008). In 1957

and 1979-80, ticks were prevalent up to 700 meters above sea level. But in 2001 and 2002,

ticks were found as high as 1100 meters above sea level (Ibid). From 1957-1983,

researchers found that ticks simply couldn’t complete their life cycles at higher altitudes

(Ibid). The distribution previously ranged from France and southwest England to central

Asia and central Europe. Its limits were northern Germany, Poland, and Lithuania, and its

southern limit was the Mediterranean shore (Ibid). In 1976, cases of TBE were reported in 4

out of 3000 sites (Ibid). In 2003, 26 sites were reported, but they were all previously known

for the tick (Ibid). In 2004, 14 sites had reports, but only 2 of the 14 were previously known

for ticks (Ibid). These results suggest an expanded tick habitat range in new areas of

Germany, Hungary, Switzerland, and the Netherlands (Ibid).

In northern Europe, forest and nature management has changed; climate conditions have

changed, and there has also been a 2000% and 5000% increase in Roe and Red Deer

populations respectively (Rizzoli, 2009). The study done by Rizzoli et al. (2009) includes

several hypotheses of factors in this amazing population boom, such as the conversion of

coppices (cut woodlands) to high stand forest and the mass of deer to population of ticks.

However, the correlation between deer density and forest composition was irrelevant; in its

place, it may be that small mammals are benefiting from the forest symphony change (Ibid).

Alternative views include the observation that the rise in TBE was really due to the fall of

communalist rule at the end of the 20th century as there was a go down in public health

measures, economic development and land use, international travel and trade, technology

and industry, human demographics and behavior, and microbial edition and change

(Randolph, 2007).

In the Baltic region specifically, although conditions are similar, there were still differences

in the patterns of changes in TBE incidence since the early 1990’s (Randolph, 2007).

Agriculture shifted from large scale to small scale, which meant that conditions were more

livable for rodents. There was also less insect repellent use.

Like most diseases, tick-borne encephalitis is caused by multiple factors. More studies need

to be conducted to decide the specific links between the spread or sharing of TBE and the

close habitat and hosts as related to climate change.

Laws in Egypt

Discrimination Law

In Egypt, Govt. have been giving equal rights and opportunities to women compared to

men to realize full potentiality of women.

Discrimination in Egypt

The discrimination is to be find in Egypt for social life and other aspects. According to the

Constitution, the President should be the Muslim because the Muslim religion is the foundation

of Egyptian legislation. All the high posts in the military and others are filled only with Muslim.

No Christians can attain high office in tribunals.

- The law was not successful because the Govt. is not gave his necessary support in

implementation of law.

- This law is not successful in eliminate the discrimination due to lack of Govt. Support

And legal standard necessary for equality.

- The law was not promoted and safeguards the right of women and girls.

- Now women can apply all accordance with international and regional human rights and

standard for justice at all level.

The Consumer Protection Law

(On basis of articles of this act)

- Persons;

Natural Persons & Legal Entities Including,

All Companies,

Association,

Unions,

Organizations,

Enterprise,

Financial Groups

- Products;

Provided by private or public legal persons including Second hand commodities

offered by suppliers.

- Any person who is offered the product or services for personal or familiar satisfaction is

know as consumer.

- The consumer protection agency is to be established by the provision of this law.

- Non-profit organization and association established and declared under this law.

- Consumer Rights;

Right to safety and health upon the abnormal use of the products.

Right to obtain correct information.

Right of selection of the favorable products or services from the market.

Right to join any council, organization, association.

Right to take legal action against any types of violation, exploitation.

- On the transaction of the consumer, the supplier should give the proper invoice to the

consumer.

- The supplier should give the proper and adequate information which is asked by the

consumer.

- The supplier can save the consumer by any types of defect in the goods oe services by

complain to the agency.

- The supplier is liable to pay the refund to the consumer for the damage or any other faults

in the products.

- If the sales is to be made in installments than the supplier should give the below

information to the consumer;

7. The entity provided the product by installment.

8. The price of the product if paid totally in cash.

9. The terms of the installments.

10. The entire cost of the sales.

11. The number and value o fetch installments.

12. The sum to be paid in advance if applicable.

- Objectives of the Consumer Protection Agency;

4. Set the work plan to protect the consumer’s rights and the further confirmation.

5. Receive and confirm the complaints made by the consumer and association.

6. Study the suggestions sent to the agency concerning consumer’s rights.

- According to the article 18, all the person who is working for the agency shall be

prohibited from releasing or also disclosing any data or information and also the source

or information or data.

- The data and source of data should not be used for other purpose rather than for which

they were given.

- According to article 19, if any agency violate any provision of this law the agency is

removable within a prescribe limit by this law by the agency’s board of directors.

- According to article 20 of consumer protection law, all agencies have to prepare their

own budget and implement and it come to end as per state fiscal year.

- According to article 21, employee working at the agency should have the right to see all

ledger and documents at any government and non-government entity. They have a right

to take any information and data which is required to inspect the cases referred to agency.

- According to article 22, this article said that the resolution by the agency for the

implementation of the provision of the law will be the final. The resolution passed by the

agency should not the part or subject to the provision of the law no. 7 of 2000 which is

concerning the establishment of the conciliation committee in some disputes which is the

ministry and other public law entity are parties to.

- According to article 23, the association made for the consumer’s should have to work

without any prejudice under the law consumer protection association or the special union

shall prohibited from receiving any type of donation financial aid from the supplier or the

advertiser.

- According to article 24, the person who is violate the article 3, 4, 5, 6, 7, 8, 11, 18, and 23

shall be punished or fined some of not less than 5000 to not more than one hundred

thousand Egyptian pound.

Antitrust law

- Antitrust law adopted by Egypt before the five year with the issuing 3/2005 to maintain

the competition and to remove the monopoly in the market.

- The problem with the law is protecting the competition itself is difficult to understand for

Egyptian.

- In the year 2009, the Egyptian competition authority received eleven complaints and two

request that they have to expand regulation.

- In the present law the monopolistic practices define only theoretical term which put the

average Egyptian into confusion that hoe to use the law to their benefits.

- therefore, the government try to give and explain the guiding principles of antitrust law

and train the lawyer to file complain and law suits

Employment Law - The new Egyptian labor law…..

-

Establishment: the employment law of Egyptian law was established in October

2004, by Khosheni Rashed & Rai.

Overview of Employment Law: if foreigners want to work in Egypt they

required to take the permission. The now Egyptian labor law widely known by

law no. 12 of 2003 which is provides that employer should employ the employee

to see its ability for work up-to three months and after that if he find that

employee is suitable for work than a contract is definite or otherwise infinite

period of time.

The law prescribed the maximum work in hours is 8 of 24 hrs not included

overtime and rest &meal time and law also said that employee must have to take

the rest in every week which must not less than 24 hrs.

The employee also have a right to get twenty one days of annual paid vacation

after that completion of one year of his work and fifty days after ten years of

working on reaching the age of fifty.

Also the law gives right to employee to take early to take leave, and the general

rule that they entitled to six months, six leaves the pay of seventy five to eighty

five percent of their normal wage. The provision for overtime is 35 percent of

normal wage for daylight, 70% work at night and 100% for wage time.

The act also laid down that the employed is legally dismissed if he committed any

serious offences.

Health & Safety Law

1 - General requirements: The organization’s top management has to authorize an OH&S

policy stating the organization’s OH&S objectives and its commitment to continual

improvement. There are other requirements covering, for example, communication and review of

the policy.

2 - Planning: Organizations have to have procedures for risk assessment an risk control and use

the outputs from these procedures in setting OH&S objectives. There is also a list of criteria

which must be met by the hazard identification, risk assessment and risk control procedures

Organizations must keep up to date records of the legal and other OH&S requirements which

apply to them, and ensure access to details of these requirements. The requirements must also be

communicated to employees and other relevant interested parties.

BIBLIGORAPHY

1. WWW.SOOPLE.COM

2. http://www.eeaa.gov.eg/ecc/ClimateBackground.htm

3. http://www.alarabiya.net/articles/2011/08/10/161719.html

4. http://www.hsmemagazine.com/regulation.php?regulation_id=12

5. http://www.legal500.com/c/egypt/developments/2903

A

Report

ON

Global Country Study Report (Wool Industry of Egypt)

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

MASTERS OF BUSINESS ADMINISTRATION

GUJARAT TECHONOLOGY UNIVERSITY

2011-2013

K.P. PATEL SCHOOL OF MANAGEMENT & COMPUTER STUDIES,

Approved with all India council for Technological Education, New Delhi

Affiliated with Gujarat Technological University, MBA

Jeevanshilp Campus, Kapadwanj-387620(Gujarat)

GUIDED BY:

Ms. Disha Bhagat (Assistant Faculty)

()()fsdfsd

SUBMITTED BY:

1.Dhaval Shah (117240592005)

2.Ripal Gadhvi(117140592015)

3.Madhvi Prajapati(117240592020)

4.Bhargavi Patel(117240592014)

5.Nisha Chaudhari(117240592018)

6.Nidhi Patel(117240592012)

Students’ Declaration

We Dhaval Shah, Ripal Gadhavi, Nidhi Patel, Nisha Chaudhry, Bhargavi Patel, Madhvi

Prajapati hereby declare that the report for Global Country Study Report entitled “Wool

Industry of Egypt & Also Comparision with Indian Wool Industry” is a result of our own work

& our indebtedness to other work publications, references, if any have been duly acknowledged.

Place: -

Date: -

Dhaval Shah

Ripal Gadhavi

Nidhi Patel

Nisha Chaudhry

Bhargavi Patel

Madhvi Prajapati

PREFACE

This project report entitled “Global Country Study Report (Egypt)” has been submitted to

Gujarat Technological University, Ahmadabad in partial fulfillment for the award of degree of

Master of Business Administration. We, the undersigned hereby declare that this report has been

completed by us under the guidance of Ms. Disha Bhagat (K.P Patel School of Management and

computer studies. Kapadwanj)

This Project Report is useful to the Academicians, to the Researchers, with respect to various

aspects to find out the very important Results in their fields.

The report is entirely the result of our own efforts and has not been submitted either in part or

completely too any other institute or in university for any degree.

ACKNOLEDGEMENT

We would like to express our deep feeling of gratitude to the under mentioned officials for their

assistance, guidance and inspiration before and throughout the project.

We are obliged to her for providing us with a clear basis to start the project and for providing

valuable feedback during the course of this project without which the study would not have been

possible.

Special thanks to respect Ms. Disha Bhagat, our project coordinator, our project faculty, for

providing us a proper way to walk on, for providing help and guidance throughout the project.

They have always been the source of encouragement. They have ceaselessly guided us in all

aspects of the project, with their abundance amount of experience and finer ideas.

We thank everybody who directly or indirectly helped us in this project to make it successful.

Ms. Disha Bhagat

Name of the Student with Signature/s:

1. Dhaval Shah (117240592005)

2. Ripal Gadhvi (117140592015)

3. Madhvi Prajapati (117240592020)

4. Bhargavi Patel (117240592014)

5. Nisha Chaudhari (117240592018)

6. Nidhi Patel (117240592012)

Date:

Place:

Executive Summary

Here there is overview of the Report of Wool Industry prevailing in Egypt as a whole. There is

many opportunities for development of wool industry in the egypt because there is not so many

companies in the Egypt that produced the wool garments and many others things those are made

by the woolo in the Egypt. So lets take it in some more manner or in details as a overview of the

wool industry.

the woollen sector plays an important role in linking the rural economy with the manufacturing

industry, represented by small, medium and large scale units. The product portfolio is equally

divergent from textile intermediaries to finished textiles, garments, knitwears, blankets, carpets

and an incipient presence in technical textiles. Wool industry is a rural based export oriented

industry and caters to civil and defence requirements for warm clothing. India has the 3rd largest

sheep population country in the world having 6.40 crores sheep producing 43.30 million kg of

raw wool. Out of this about 85% is carpet grade wool, 5% apparel grade and remaining 10%

coarse grade wool for making rough Kambals etc. Average annual yield per sheep in India is 0.9

Kg. against the world average of 2.4 Kg.

A small quantity of specialty fibre is obtained from Pashmina goats and Angora rabbits. The

domestic produce of wool is not adequate, therefore, the industry is dependent on imported raw

material and wool is the only natural fibre in which the country is deficient. The woollen

industry in the country is of the size of Rs. 10,000 Crore and is broadly divided & scattered

between the organized and decentralized sectors. The organized sector consists of: Composite

mills, Combing units, Worsted and Non Worsted spinning units, Kintwears and Woven

Garments units and Machine Made Carpets manufacturing units. The Decentralized Sector

includes Hosiery and knitting, Power-looms, Hand knotted carpets, Druggets, Namadahs and

Independent dyeing, Process houses and Woollen Handloom Sector.

There are around 958 woollen units in the country, majority of which are in the small scale

sector. The industry has the potential to generate employment in far-flung and diverse regions

and at present provides employment in the organised wool sector to about 12 lakh persons, with

an additional 12 lakh persons associated in the sheep rearing and farming sector. Further, there

are 3.2 lakh weavers in the carpet sector. During the XIth Five Year Plan period, the Government

is implementing (i) Integrated Wool Improvement & Development Programme (IWIDP), (ii)

Quality Processing of Wool and Woollen Products and (iii) Social Security Scheme for sheep

breeders in the country for the growth and development of the wool and woollen industry. The

schemes are being implemented by the Central Wool Development Board (CWDB), Jodhpur,

through State Government Organizations/Non-Governmental Organizations.

Wool Industry in India

Traditionally, home run handlooms and skilled artisans have formed the basic back bone of

Textiles Industry in India. Manufacture of fine woolen textile products in India has been strong

point of artisan skills of handloom weaver‟s right from Kashmir in the North to various

manufacturing centers in Rajasthan, Punjab, Uttar Pradesh for centuries. Various kinds of

animal hair obtained from hilly terrain were processed and used to

make fine products like shawls, carpets, rugs etc. During the British government in second half

of the 17th century, large amounts of cotton goods were exported regularly from India. Soon

the modern structure of mechanized Manufacturing of Cotton Textile Industry was

followed by the Woolen Textile Industry successively.

However, establishment of mechanized mill in Woolen Sector was relatively late and possibly

the first mill was „Lallmli‟ of British India Corporation set up in Kanpur.

The modern industry followed growth in center like Thane, Mumbai, Jamnagar, Vadodara in

West and Dhariwal, Amritsar, Panipat, Ludhiana in the North. In the after that part of the 20th

Century saw creation of new facilities in Mysore, Raipur and Nagpur. Other than that new

investment in green ground large projects remain insignificant. Instead the investment in this

sector was more focused on existing sites to modernize and expand.

In the early stage of development, production was confined for path to medium qualities mostly

for the requirement of defence department. Requirement for fine variety of woll and worsted

fabric were met through imports mostly from U.K. Post independence, economics policies led to

rapid growth of woollen textile manufacture in the organized sector and mushrooming of small

to medium sized units all over India producing all kinds of wool products, knitwear, hosiery and

woollen blazer fabrics followed by blankets.

The middle of 20th century eventually saw imports being almost stopped and domestic

production keeping pace with local demand followed by product innovation and introduction of

latest technology for processing of greasy wool from Australia to finished products.

Today in this new century the woolen sector of the Indian Textile Industry has many big brands

names on its horizon. The woolen industry deserves a special mention for creating the concept of

brand marketing on the national scale in the textile field. Some of the brands have been

successful to create a mark even outside Indian boundary.

Employment generator after agriculture. The clothing sector is the final stage of the textiles value

chain, with maximum value addition at this level. It is a low investment and high labour-

intensive industry; an investment of ` 0.1 mn creates 6 to 8 jobs. The industry employs around 5

mn workers, of which, around 2.5 mn are in the export sector. The clothing industry consists

mainly of knitted and woven garment segments. This industry is fragmented and is

predominantly in the small-scale sector.

Apparel clusters in India

The apparel industry is concentrated mainly in eight clusters: Tirupur, Ludhiana, Bengaluru,

Delhi/Noida/Gurgaon, Mumbai, Kolkata, Jaipur and Indore. While Tirupur, Ludhiana and

Kolkata are major centres for knitwear, Bengaluru, Delhi/Noida/Gurgaon, Mumbai, Jaipur and

Indore are major hubs for woven garments.

Industry structure

The textiles sector in India comprises both organised and unorganised segments. More than 70

textile and clothing clusters account for about 80% of total production in the country. There are

nearly 40 powerloom clusters in the country. Major states with a number of clusters are

Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Uttar Pradesh. The textiles

industry is extremely diversified with hand-spun and hand-woven sectors at one end and the

capital-intensive, sophisticated mill sector at the other. The de-centralised powerloom/hosiery

and knitting sectors form the largest section of the textiles industry. Major sub-sectors of the

textiles sector are organised cotton/man-made fibre textiles mills, man-made fibre/filament yarn,

wool and woolen textiles, sericulture and silk textiles, handlooms, handicrafts, jute and jute

textiles and textiles exports.

Industry structure

The textiles sector in India comprises both organised and unorganised segments. More than 70

textile and clothing clusters account for about 80% of total production in the country. There are

nearly 40 powerloom clusters in the country. Major states with a number of clusters are

Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Uttar Pradesh. The textiles

industry is extremely diversified with hand-spun and hand-woven sectors at one end and the

capital-intensive, sophisticated mill sector at the other. The de-centralised powerloom/hosiery

and knitting sectors form the largest section of the textiles industry. Major sub-sectors of the

textiles sector are organised cotton/man-made fibre textiles mills, man-made fibre/filament yarn,

wool and woolen textiles, sericulture and silk textiles, handlooms, handicrafts, jute and jute

textiles and textiles exports.

PROCESSING - The Woollen industry suffers from inadequate and outdated processing

facilities. The pre-loom and post-loom facilities are required to be modernized for ensuring quality

finished products. Quality finishing of the woollen products will not only increase use of indigenous

wool but will also make the product more competitive in the international market. It will also assist

in procuring better price for wool growers and will make quality raw material available to the Khadi

and Handloom sector.

Owing to overall size of the woollen industry and specialized nature of equipments required for

processing, the industry has been dependent on imported plant and machinery except for few

complimentary equipments from local sources. Machinery required for processing from raw wool

fibre to fabrics followed by knitting and garmenting, is mostly imported from European countries,

USA and Japan. The industry may need an investment of Rs.5,000 crores worth of plant and

equipment in the course of next 5 years for modernization and capacity expansion.

IMPORT - The production of wool in the country is not sufficient to meet the demand of the

wool industry particularly of apparel sector and most of it is being imported from Australia, New

Zealand and many other countries. The present requirement of different segments of Indian woollen

industry is likely to grow further because of higher domestic as well as export need of woollen items.

The country which had strong position in quality carpet wool production is becoming dependent on

import, as requirement is growing at higher pace as compared to growth in production.

There has been a shift from imports of fine quality wool to low quality wool in recent years. This is

on account of consumer preference for hand tufted carpets in the US and other western markets.

Cheap wool import from the Middle East is also constantly growing and is mixed with indigenous

wool to make hand tufted carpets.

RESEARCH & DEVELOPMENT - Research & Development activities should be promoted

in the country to help the wool industry to adopt regular system of quality control and maintain

the quality of products, to render technical and trouble shooting services with reference to

selection of raw material, controlling various adjusting equipments and reducing the cost of

production and improving the quality of product.

Investment in R&D activities would help in following way

- Development of new products based on latest techniques in mechanical and chemical

processing of wool and transfer the knowhow to the industry.

- Study and provide Research & Development facilities for testing of properties of various

products like fiber, yarn and fabric stages including intermediate stages.

- The provision of services in quality assurance and testing to the organized sector.

- The provision of services to the decentralized industry, which uses significant Australian

wool in small enterprises where the sophistication of equipment and machinery is much

lower than that of the “organised” sector.

- Offer technical training and suitable courses to support industry‟s need of

technological/supervisory training for constant upgradation of technical knowhow.

- Organizing regular workshops and seminars with the participation of industry experts

from India as well as overseas in the field of wool technology for the dissemination of the

latest development.

CONSTRAINS FACED BY WOOL SECTOR

1. Raw Wool Production

- Low priority of State Governments in development of wool sector,

- Lack of awareness, traditional management practices, and lack of education and poor

economic conditions of woolgrowers.

- Shortage of pasture land which force breeders to migrate their flock from one area to

another throughout the year.

- Uneconomical return of the produces to sheep breeders i.e. sale of raw wool, live sheep,

manure, milk, mutton, skin etc.

- Lack of motivation for adopting modern methods of sheep management, machine

shearing of sheep, washing & grading of raw wool etc.

- Inadequate production and processing facilities of specialty fibres i.e. Pashmina goat

wool and Angora rabbit wool.

2. Marketing of Raw Wool

- Inadequate marketing facilities and infrastructure,

- Ineffective role of state wool marketing organizations in wool producing States.

- Absence of organized marketing and minimum support price system for ensuring

remunerative return.

- Minimum return earned from sale of wool by wool growers.

3. Processing of Wool

- Inadequate quantity of quality raw wool.

- Out dated and inadequate pre-loom & post-loom processing facilities.

- Inadequate dyeing facilities in wool potential areas.

- Need of designing & diversification of woolen handloom products.

- Dearth of technicians & trained manpower.

- Inadequate testing facilities and quality control measures.

- Transfer of technology is inadequate.

- Lack of operational and technical bench marks.

4. Education, Research & Development, Human Resource Development

- No educational institute for wool technology resulting lack of expertise in wool sector.

- Inadequate database.

- Need of R&D work on blending of raw wool with other fibres & diversification of

woollen products.

- Lack of R&D work for value addition to Deccani wool produced in Southern region.

The growth of Woollen Textile Industry in India - Woolen textile industry is one of the

oldest industries of India. The Aryans knew the use of wool as far back as 5000 B.C.

Woollen textile manufacturing was a handiwork and then a cottage industry run on very small

scale during the historical times. The Indian blankets, lohis, 'nomads', shawls etc. were popular in

different countries in the past. The first woollen mill 'Lalimli' was set up at Kanpur in 1876.

Later in 1881 in Punjab (Dhariwal) another woollen mill was started. Mumbai in 1882 and

Bangalore in 1886 followed suit. The industry developed steadily with the increase in population

in the country. A current survey shows that presently, there are over 625 big and small woollen

mills extend over the different parts of the country. There are thousands of hosiery units in the

country manufacturing a variety of woollens.

The major concentration of the industry is in Punjab, Maharashtra and U.P these states produce

75% of the total output.

Gujarat, Karnataka, West Bengal and J & K also have woollen mills.

Punjab - Punjab is the leader. There are over 250 small woollen mills in Punjab. Dhariwal in

Gurdaspur district, which is an old centre of the industry, is well known. Amritsar and Ludhiana

are other centres. The industry depends upon wool from H.P, J 8c K and Australia. The industry

gets power from Bhalcra Dam. Labour is available in these centres.

Maharashtra. - Maharashtra is another important state of India where woolen mills exist. These

are 31 mills. The majority are in Mumbai. Mumbai being a port, it is easy to import wool from

Australia, U.K., Italy, etc. Superior quality fabrics are manufactured including blended fibre.

U.P. - Kanpur is the most outstanding centre. Mirzapur, Varanasi, Agra, Tanakpur are other

centres. There are nearly 40 woollen mills in the state.

Gujarat . - There are 10 mills in Gujarat, Jamnagar, Ahmadabad and Vadodra are the main

centres.

Haryana. - Panipat, Bhiwani, Faridabad, Gurgaon.

Rajasthan.:- Bikaner, Bhilwara, Alwar, Sikar, Jaipur, Pushkar and Ajmer.

Karnataka. :- Bangalore, Ballery (3 mills).

West Bengal . :- Kolkata and Howrah (6 mills).

J & K. :- Srinagar.

Tamil Nadu. :- Chennai and Salem.

The industry manufactures different types of woollens like Patti, carpets, hosiery goods, cloth,

blankets, lohis, shawls etc. Carpets are made in Mirzapur, Gopiganj, Agra (U.P), Srinagar (J.K.),

Amritsar (Punjab), Panipat (Haryana), Jaipur, Bikancr (Rajasthan), Eluru (A.P), Chennai (T.N.).

Egypt’s Wool Industry

When we think of knitting, or any ability that uses yarn, we think of wool. Wool, by definition, is

the fiber made from the cheat of domestic sheep. relations of the domestic sheep had long hair

and a soft, soft basecoat. Over the years of domesticating the sheep through breeding, feed,

climate and herding, wool was probably the first fiber to be woven into a textile. I've always

found this process exciting especially because it began so long ago. Fragments of wool have

been found in the tombs and ruins of Egypt, Nineveh, and Babylon, and also among relics of the

Peruvians. As near the beginning as 200 BC, the Romans began to improve their flock by

domestication and herding. Today these sheep are known as the famed Spanish Merino Sheep. A

factory at Winchester, established by the Romans, improved the methods by the Britons, who

kept sheep and weave wool long before the Roman attack.

Skilled Flemish weavers were brought in by William the captor. Wool industries were

encouraged by Henry II with his laws, guilds of weavers and cloth fairs. Weavers and skilled

wool laborers were brought in by Edward III. Wool became the staple industry of England and

became the wool–producing country of Europe. In Jamestown, Virginia, one of the American

colonies, sheep raising begin. In an effort to force the colonist to use English cloth, strict English

laws were passed against the exporting of wool which forced the settlers to raise sheep finally

imported by George Washington. He also brought weavers and spinners from England. By

importing Merino sheep in the early 19th century, the existing stock greatly improved. New

England began the first factory of spinning and weaving. As a matter of fact, in 1788 in Hartford,

Connecticut, the first factory using water power to weave wool was established. Not only that,

but was encouraged by tax exemption and a bounty on each yard woven.

The Wool Products Labeling Act of 1939 in the United States states that:

The term “wool” may be applied ONLY to fabrics made entirely of new wool.

The term “reprocessed wool” is ONLY that wool which is recovered from unused articles

and waste.

The term “reused wool” is ONLY that wool from used articles.

Fleece wool is considered to be virgin wool, as salvage wool is considered substandard,

however, salvage wool may be used to add strength to soft new wool or to produce a less

luxurious product.

Today various synthetic fibers have been added as wool imitations and also for blending with

new wool. A substantial amount of wool is produced in the United States today in Texas,

Montana, Wyoming, Utah, Oregon, Idaho, New Mexico, Colorado, California and Ohio. New

England is the center for woolen cloth manufacturing. Australia, Argentina, New Zealand,

Russia, the Republic of South Africa, Uruguay, Great Britain, China and India are other wool

producers.

SWOT Analysis

Strengths

Wool is natural, biodegradable, renewable, low carbon footprint; reduced micron of the wool

clip over time has created the potential for finer, more comfortable products. Merino (wool)

is seen as a luxurious and more comfortable than traditional wool products, and has the

potential to address consumer barriers to consumption,The Woolmark is one of the world‟s

most recognised apparel brand symbols.

Weaknesses

Supply vulnerable to prevailing weather conditions. The flock size has reduced significantly

over the last decade.Other farm activities provide higher and more reliable returns.

Consumers on the whole are ignorant of wool‟s competitive benefits, origins, environmental

credentials.Existing consumer perceptions are dominated by old, unfashionable and

uncomfortable products.Given a long supply chain, wool represents a minor percentage of

final apparel cost, therefore cannot easily impact end consumer price and presentation

Retailers and brands have limited and decreasing knowledge of how to sell wool apparel, and

in many cases how to source fashionable saleable productsThe Woolmark no longer connotes

quality and has lost its connection with consumers and value to some licensees

Opportunities

On farm, there is considerable room for management improvements and greater productivity.

Further progress on predation and infestation will lower costs of production. Natural fibre and

low carbon footprints are relevant competitive benefits for a significant proportion of the market.

Product development and innovation has yielded successes in the challenges facing woven

product consumption. Wool lends itself to greater use in sports and performance apparel, in

particular for its benefits in moisture control, hygiene, temperature regulation and compression.

Brands and retailers are looking for product “stories” and wool has one to tell.Marketing has

changed, with more cost effective targeting now available through digital and some traditional

media. Rebuild perceptions of the Woolmark through attaching relevant fibre and product

information.

Threats

Limited levels of productivity improvement have been evident in wool production, and there is a

need to ensure modern management practices and a market driven perspective are adopted

industry-wide. Labour availability has been restricted and remains under pressure; there is

particular concern for continued availability of shearers and wool classers. Limited early stage

processing in Australia, most now processed in China, with lesser amounts in Eastern Europe

and India. While oil prices have continued to climb, albeit at a slower rate, man made fibres

continue to have a strong price advantage over natural fibres and in particular wool. At less than

2% share of apparel, manufacturers and retailers relegate wool to.niche product offerings.

Transfering Egypt‟s Wool Industry‟s Weaknesses into Indian Wool

Industry‟s Opportunities

Here, by combining the weaknesses of Egypt wool industry and an opportunity of Indian wool

industry we can develop a good business relationship

Egypt not having favorable condition and that prevent the supply of wool, while India having a

favorable demographic condition. So, we can produce wool in India and it will direct send to

Egypt .this is helpful in overcoming the weakness of Egypt wool industry.

In India the malls and retail sector increased so it open an opportunities of new segment for a

woolen clothes.

Indian farmers having a good return in wool sector as other sector of agriculture while in Egypt

the farmers are not getting a good return as other sector of agriculture. so we can use this

weakness of Egypt as opportunity for an India

Egyptian people are dominated by unfathomable and uncomfortable product they are ignorant of

woolen product. so India can use this opportunity by converting unused of wool product in to

user of wool product and create a new segment for a wool product in Egypt. .

Egypt retailer and brand having a less knowledge that how to sell wool and how to source a

fashionable and seasonable product. while India having a good knowledge of generating a

fashionable and seasonable product so we can combine weakness of Egypt and opportunity of

India and develop a good market for a wool product in Egypt.

Table of Content

SR.NO TOPIC PAGE No.

1 Student’s Declaration I

2 Preface II

3 Acknowledgement III

4 Executive Summary IV

5 Introduction 1

5.1 Wool industry in India 4

History 5

Industry structure 7

Processing 9

Import 9

Export 10

Research & Development 11

Constrains faced by wool sector 12

The growth of woolen textile industry in India 14

5.2 Egypt’s wool industry 17

History 18

SWOT analysis 21

PESTEL Analysis 25

Porters Five Forces Model 29

Comparision 33

6 Conclusion XVI

7 Bibliography XVII

1

In Indian the Woollen textiles and clothing industry is relatively small compared to the cotton

and man made fibre based textiles and clothing industry. However, the woollen sector plays an

important role in linking the rural economy with the manufacturing industry, represented by

small, medium and large scale units. The product portfolio is equally divergent from textile

intermediaries to finished textiles, garments, knitwears, blankets, carpets and an incipient

presence in technical textiles. Wool industry is a rural based export oriented industry and caters

to civil and defence requirements for warm clothing.

India has the 3rd largest sheep population country in the world having 6.40 crores sheep

producing 43.30 million kg of raw wool. Out of this about 85% is carpet grade wool, 5% apparel

grade and remaining 10% coarse grade wool for making rough Kambals etc. Average annual

yield per sheep in India is 0.9 Kg. against the world average of 2.4 Kg. A small quantity of

specialty fibre is obtained from Pashmina goats and Angora rabbits. The domestic produce of

wool is not adequate, therefore, the industry is dependent on imported raw material and wool is

the only natural fibre in which the country is deficient.

The woollen industry in the country is of the size of Rs. 10,000 Crore and is broadly divided &

scattered between the organized and decentralized sectors. The organized sector consists of:

Composite mills, Combing units, Worsted and Non Worsted spinning units, Kintwears and

Woven Garments units and Machine Made Carpets manufacturing units. The Decentralized

Sector includes Hosiery and knitting, Power-looms, Hand knotted carpets, Druggets, Namadahs

and Independent dyeing, Process houses and Woollen Handloom Sector.

There are around 958 woollen units in the country, majority of which are in the small scale

sector. The industry has the potential to generate employment in far-flung and diverse regions

and at present provides employment in the organised wool sector to about 12 lakh persons, with

an additional 12 lakh persons associated in the sheep rearing and farming sector. Further, there

are 3.2 lakh weavers in the carpet sector.

During the XIth Five Year Plan period, the Government is implementing (i) Integrated Wool

Improvement & Development Programme (IWIDP), (ii) Quality Processing of Wool and

Woollen Products and (iii) Social Security Scheme for sheep breeders in the country for the

growth and development of the wool and woollen industry. The schemes are being implemented

by the Central Wool Development Board (CWDB), Jodhpur, through State Government

Organizations/Non-Governmental Organizations.

History

India‟s name has always been equal with its Cotton Textile Industry. But few know about the

deep roots of a thriving Woolen Industry way back from the era of Indian Royalty and Mugal

Emperors who have been patrons of Exquisite work of arts ,from finely embroidered,

breathtaking jamavar shawls, to pure wool product, clothes and carpets.

Traditionally, home run handlooms and skilled artisans have formed the basic back bone of

Textiles Industry in India. Manufacture of fine woolen textile products in India has been strong

point of artisan skills of handloom weaver‟s right from Kashmir in the North to various

manufacturing centers in Rajasthan, Punjab, Uttar Pradesh for centuries. Various kinds of

animal hair obtained from hilly terrain were processed and used to

make fine products like shawls, carpets, rugs etc.

During the British government in second half of the 17th century, large amounts of cotton goods

were exported regularly from India. Soon the modern structure of mechanized

Manufacturing of Cotton Textile Industry was followed by the Woolen Textile Industry

successively.

However, establishment of mechanized mill in Woolen Sector was relatively late and possibly

the first mill was „Lallmli‟ of British India Corporation set up in Kanpur.

The modern industry followed growth in center like Thane, Mumbai, Jamnagar, Vadodara in

West and Dhariwal, Amritsar, Panipat, Ludhiana in the North.

In the after that part of the 20th Century saw creation of new facilities in Mysore, Raipur and

Nagpur. Other than that new investment in green ground large projects remain insignificant.

Instead the investment in this sector was more focused on existing sites to modernize and

expand.

In the early stage of development, production was confined for path to medium qualities mostly

for the requirement of defence department. Requirement for fine variety of woll and worsted

fabric were met through imports mostly from U.K.

Post independence, economics policies led to rapid growth of woollen textile manufacture in the

organized sector and mushrooming of small to medium sized units all over India producing all

kinds of wool products, knitwear, hosiery and woollen blazer fabrics followed by blankets.

The middle of 20th century eventually saw imports being almost stopped and domestic

production keeping pace with local demand followed by product innovation and introduction of

latest technology for processing of greasy wool from Australia to finished products.

Today in this new century the woolen sector of the Indian Textile Industry has many big brands

names on its horizon. The woolen industry deserves a special mention for creating the concept of

brand marketing on the national scale in the textile field. Some of the brands have been

successful to create a mark even outside Indian boundary.

Size and structure of the industry

The Indian textile industry is fragmented, with only a few large players and numerous small and

medium-size companies. The industry‟s size is estimated at US$ 55 bn with 64% of the

companies catering to domestic demand. The textiles industry provides direct employment to

more than 35 mn people and indirect employment to 47 mn people. In addition, the industry

generates significant employment through forward and backward linkages, both in traditional

(production of cotton and other natural fibres) and modern activities (textile design, etc). In fact,

the textiles industry is the second-largest.

employment generator after agriculture.

The clothing sector is the final stage of the textiles value chain, with maximum value addition at

this level. It is a low investment and high labour-intensive industry; an investment of ` 0.1 mn

creates 6 to 8 jobs. The industry employs around 5 mn workers, of which, around 2.5 mn are in

the export sector. The clothing industry consists mainly of knitted and woven garment segments.

This industry is fragmented and is predominantly in the small scale sector.

Apparel clusters in India

The apparel industry is concentrated mainly in eight clusters: Tirupur, Ludhiana, Bengaluru,

Delhi/Noida/Gurgaon, Mumbai, Kolkata, Jaipur and Indore. While Tirupur, Ludhiana and

Kolkata are major centres for knitwear, Bengaluru, Delhi/Noida/Gurgaon, Mumbai, Jaipur and

Indore are major hubs for woven garments.

Industry structure

The textiles sector in India comprises both organised and unorganised segments. More than 70

textile and clothing clusters account for about 80% of total production in the country. There are

nearly 40 powerloom clusters in the country. Major states with a number of clusters are

Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala and Uttar Pradesh. The textiles

industry is extremely diversified with hand-spun and hand-woven sectors at one end and the

capital-intensive, sophisticated mill sector at the other. The de-centralised powerloom/hosiery

and knitting sectors form the largest section of the textiles industry. Major sub-sectors of the

textiles sector are organised cotton/man-made fibre textiles mills, man-made fibre/filament yarn,

wool and woolen textiles, sericulture and silk textiles, handlooms, handicrafts, jute and jute

textiles and textiles exports.

WOOL PRODUCTION & CONSUMPTION

The total wool production in India is not enough to meet the total requirement of raw wool

for woolen industry. The bulk of Indian wool is of coarse quality and is used mostly in the

hand-made carpet industry. Since indigenous production of fine quality wool required by the

organized mills and decentralized hosiery sector is very limited, India depends almost

exclusively on import.

Production of

indigenous wool:

Year

Production

Quantity

(in million kg.)

2004-05 44.60 Mn Kg.

2005-06 44.90 Mn Kg.

2006-07 45.10 Mn Kg.

2007-08 44.00 Mn Kg.

2008-09 42.90 Mn Kg.

2009-10 43.20 Mn Kg.

2010-11 43.30 Mn. Kg.

(Source: Ministry of Agriculture, Deptt. of Animal Husbandry)

Top 7 carpet grade wool producing states

SN States Wool Production

(Qty. in 000 Kg.)

1 Rajasthan 12529

2 Jammu &

Kashmir

7300

3 Karnataka 7165

4 Andhara Pradesh 4605

3 Gujarat 2919

4 Maharashtra 1726

5 Himachal

Pradesh

1614

(Source : Animal Husbandry Deptt., Ministry of Agri.)

PROCESSING

The Woollen industry suffers from inadequate and outdated processing facilities. The pre-loom and

post-loom facilities are required to be modernized for ensuring quality finished products. Quality

finishing of the woollen products will not only increase use of indigenous wool but will also make

the product more competitive in the international market. It will also assist in procuring better price

for wool growers and will make quality raw material available to the Khadi and Handloom sector.

Owing to overall size of the woollen industry and specialized nature of equipments required for

processing, the industry has been dependent on imported plant and machinery except for few

complimentary equipments from local sources. Machinery required for processing from raw wool

fibre to fabrics followed by knitting and garmenting, is mostly imported from European countries,

USA and Japan. The industry may need an investment of Rs.5,000 crores worth of plant and

equipment in the course of next 5 years for modernization and capacity expansion.

IMPORT

The production of wool in the country is not sufficient to meet the demand of the wool industry

particularly of apparel sector and most of it is being imported from Australia, New Zealand and many

other countries. The present requirement of different segments of Indian woollen industry is likely to

grow further because of higher domestic as well as export need of woollen items. The country which

had strong position in quality carpet wool production is becoming dependent on import, as

requirement is growing at higher pace as compared to growth in production.

There has been a shift from imports of fine quality wool to low quality wool in recent years. This is

on account of consumer preference for hand tufted carpets in the US and other western markets.

Cheap wool import from the Middle East is also constantly growing and is mixed with indigenous

wool to make hand tufted carpets.

Import of raw wool from Australia, New Zealand and many other countries

are as under:

Year Qty. (in million kgs.) Value (Rs. in crore)

2003-04 84.61 870.61

2004-05 80.47 825.95

2005-06 91.22 885.81

2006-07 99.56 1077.45

2007-08 93.07 1089.51

2008-09 65.73 1031.86

2009-10 68.26 1000.77

2010-11 94.46 1418.93

2011-12 ( Upto

Nov. 2011)

53.08 1282.59

(Source: DGCI&S, Calcutta)

EXPORT

India exports various woollen products like tops, yarn, fabrics, Ready Made Garments and

carpets. Carpets enjoys maximum share of total export. The aggregate export of woollen items

from wool tops to finished products like textiles, clothing, blankets and carpets is currently

estimated around Rs. 7000 Crs.

During the 11th Plan period, the growth was hindered owing to variety of factors. However there

are good opportunities for export growth. Primary sectors which can look forward for export

growth are textiles, woven clothings, knitwears and carpets. In order to build growth tempo, the

action for reform should be expedited which may also attract FDI to reinforce export outlook

through joint ventures for better access to major markets.

Export to major countries Woolen Yarn, Fabrics, Made Ups

SN Country Value in Lakhs

1 United Kingdom 6583.00

2 Italy 5185.00

3 Dominic Rep 2616.40

4 China 2123.17

5 USA 1958.35

RESEARCH & DEVELOPMENT

Research & Development activities should be promoted in the country to help the wool industry

to adopt regular system of quality control and maintain the quality of products, to render

technical and trouble shooting services with reference to selection of raw material, controlling

various adjusting equipments and reducing the cost of production and improving the quality of

product.

Investment in R&D activities would help in following way

Development of new products based on latest techniques in mechanical and chemical processing

of wool and transfer the knowhow to the industry.

Study and provide Research & Development facilities for testing of properties of various

products like fiber, yarn and fabric stages including intermediate stages.

The provision of services in quality assurance and testing to the organized sector.

The provision of services to the decentralized industry, which uses significant Australian wool

in small enterprises where the sophistication of equipment and machinery is much lower than

that of the “organised” sector.

Offer technical training and suitable courses to support industry‟s need of

technological/supervisory training for constant upgradation of technical knowhow.

Organizing regular workshops and seminars with the participation of industry experts from India

as well as overseas in the field of wool technology for the dissemination of the latest

development.

STRENGTHING OF CENTRAL WOOL DEVELOPMENT BOARD

The Central wool Development Board has been assigned the functions of promoting growth and

development of wool and woolen products, market intelligence, marketing of wool & woolens,

price stabilization, standardization of wool and woolen products, quality control, dissemination

of information, product diversification, advise to government on policy matters, coordination etc.

CONSTRAINS FACED BY WOOL SECTOR

1. Raw Wool Production

- Low priority of State Governments in development of wool sector.

- Lack of awareness, traditional management practices, and lack of education and poor

economic conditions of woolgrowers.

- Shortage of pasture land which force breeders to migrate their flock from one area to

another throughout the year.

- Uneconomical return of the produces to sheep breeders i.e. sale of raw wool, live sheep,

manure, milk, mutton, skin etc.

- Lack of motivation for adopting modern methods of sheep management, machine

shearing of sheep, washing & grading of raw wool etc.

- Inadequate production and processing facilities of specialty fibres i.e. Pashmina goat

wool and Angora rabbit wool.

2. Marketing of Raw Wool

- Inadequate marketing facilities and infrastructure.

- Ineffective role of state wool marketing organizations in wool producing States.

- Absence of organized marketing and minimum support price system for ensuring

remunerative return.

- Minimum return earned from sale of wool by wool growers.

3. Processing of Wool

- Inadequate quantity of quality raw wool.

- Out dated and inadequate pre-loom & post-loom processing facilities.

- Inadequate dyeing facilities in wool potential areas.

- Need of designing & diversification of woolen handloom products.

- Dearth of technicians & trained manpower.

- Inadequate testing facilities and quality control measures.

- Transfer of technology is inadequate.

- Lack of operational and technical bench marks.

4. Education, Research & Development, Human Resource Development

- No educational institute for wool technology resulting lack of expertise in wool sector.

- Inadequate database.

- Need of R&D work on blending of raw wool with other fibres & diversification of

woollen products.

- Lack of R&D work for value addition to Deccani wool produced in Southern region.

CENTRAL WOOL DEVELOPMENT BOARD (CWDB), JODHPUR

The Central Wool Development Board, Jodhpur was constituted by the Government of India,

Ministry of Textiles in 1987 with the primary objective of development of wool and woollen

textiles in the country by undertaking programmes to support various wool development

activities. The Board has undertaken various projects mainly in the wool growing States.

For the XIth Five Year Plan, the Board has undertaken following schemes under fully funded

Central Sector Scheme to support different wool development activities and to provide support to

the entire chain from shepherds to the end use of wool :

1. Integrated Wool Improvement and Development Programme (IWIDP) :

- Sheep and Wool Improvement Scheme (SWIS)

- Angora Wool Development Scheme

- Pashmina Wool Development Scheme

- Human Resource Development & Promotional activities.

2. Quality Processing of Wool and Woollen Products :

- Setting up of Common Facility Centre for wool scouring, carbonizing, carding, dying, Spinning

etc. (Pre-loom processing activity)

- Setting up of Woollen Shawl/Carpet Finishing Centre (Post-loom processing activity)

3. Social Security Scheme for Sheep Breeders :

- Sheep Breeders Insurance Scheme (Kendriya Bhed Palak Bima Yojana)

- Sheep Insurance Scheme (Kendriya Bhed Bima Yojana)

The growth of Woollen Textile Industry in India

Woolen textile industry is one of the oldest industries of India. The Aryans knew the use of wool

as far back as 5000 B.C.

Woollen textile manufacturing was a handiwork and then a cottage industry run on very small

scale during the historical times. The Indian blankets, lohis, 'nomads', shawls etc. were popular in

different countries in the past. The first woollen mill 'Lalimli' was set up at Kanpur in 1876.

Later in 1881 in Punjab (Dhariwal) another woollen mill was started. Mumbai in 1882 and

Bangalore in 1886 followed suit. The industry developed steadily with the increase in population

in the country.

A current survey shows that presently, there are over 625 big and small woollen mills extend

over the different parts of the country. There are thousands of hosiery units in the country

manufacturing a variety of woollens.

The major concentration of the industry is in Punjab, Maharashtra and U.P these states produce

75% of the total output.

Gujarat, Karnataka, West Bengal and J & K also have woollen mills.

Punjab .

Punjab is the leader. There are over 250 small woollen mills in Punjab. Dhariwal in Gurdaspur

district, which is an old centre of the industry, is well known. Amritsar and Ludhiana are other

centres. The industry depends upon wool from H.P, J 8c K and Australia. The industry gets

power from Bhalcra Dam. Labour is available in these centres.

Maharashtra.

Maharashtra is another important state of India where woolen mills exist. These are 31 mills. The

majority are in Mumbai. Mumbai being a port, it is easy to import wool from Australia, U.K.,

Italy, etc. Superior quality fabrics are manufactured including blended fibre.

U.P.

Kanpur is the most outstanding centre. Mirzapur, Varanasi, Agra, Tanakpur are other centres.

There are nearly 40 woollen mills in the state.

Gujarat .

There are 10 mills in Gujarat, Jamnagar, Ahmadabad and Vadodra are the main centres.

Haryana.

Panipat, Bhiwani, Faridabad, Gurgaon.

Rajasthan.:- Bikaner, Bhilwara, Alwar, Sikar, Jaipur, Pushkar and Ajmer.

Karnataka. :- Bangalore, Ballery (3 mills).

West Bengal . :- Kolkata and Howrah (6 mills).

J & K. :- Srinagar.

Tamil Nadu. :- Chennai and Salem.

The industry manufactures different types of woollens like Patti, carpets, hosiery goods, cloth,

blankets, lohis, shawls etc.

Carpets are made in Mirzapur, Gopiganj, Agra (U.P), Srinagar (J.K.), Amritsar (Punjab), Panipat

(Haryana), Jaipur, Bikancr (Rajasthan), Eluru (A.P), Chennai (T.N.).

There are certain problems which the industry presently faces. These are :

Shortage of raw material.

Lack of modern machines.

Poor quality products.

Lack of market due to tropical and sub-tropical climate of the country.

Low production

History

Did You Know?

The best Cashmere Wool is really from a Cashmere Goat. Most goats produce cashmere fiber to

some degree, however the Cashmere goat has been specially breed to produce a much higher

amount of it.

The Angora goat produces long, curling, lustrous locks of mohair. The complete body of the goat

is covered with mohair. The locks constantly grow and can be four inch or more in length.

Angora wool or Angora fiber refers to the downy coat produced by the Angora rabbit. While

their names are similar, Angora fiber is distinct from mohair, which comes from the Angora

goat. Angora is known for its softness and what knitters refer to as a halo (fluffiness). It is also

known for its silky texture.

A Bit O'History about Wool

When we think of knitting, or any ability that uses yarn, we think of wool. Wool, by definition, is

the fiber made from the cheat of domestic sheep. relations of the domestic sheep had long hair

and a soft, soft basecoat. Over the years of domesticating the sheep through breeding, feed,

climate and herding, wool was probably the first fiber to be woven into a textile. I've always

found this process exciting especially because it began so long ago.

Fragments of wool have been found in the tombs and ruins of Egypt, Nineveh, and Babylon, and

also among relics of the Peruvians. As near the beginning as 200 BC, the Romans began to

improve their flock by domestication and herding. Today these sheep are known as the famed

Spanish Merino Sheep.

A factory at Winchester, established by the Romans, improved the methods by the Britons, who

kept sheep and weave wool long before the Roman attack. Skilled Flemish weavers were brought

in by William the captor. Wool industries were encouraged by Henry II with his laws, guilds of

weavers and cloth fairs. Weavers and skilled wool laborers were brought in by Edward III. Wool

became the staple industry of England and became the wool–producing country of Europe.

In Jamestown, Virginia, one of the American colonies, sheep raising begin. In an effort to force

the colonist to use English cloth, strict English laws were passed against the exporting of wool

which forced the settlers to raise sheep finally imported by George Washington. He also brought

weavers and spinners from England. By importing Merino sheep in the early 19th century, the

existing stock greatly improved. New England began the first factory of spinning and weaving.

As a matter of fact, in 1788 in Hartford, Connecticut, the first factory using water power to

weave wool was established. Not only that, but was encouraged by tax exemption and a bounty

on each yard woven.

The Wool Products Labeling Act of 1939 in the United States states that:

The term “wool” may be applied ONLY to fabrics made entirely of new wool.

The term “reprocessed wool” is ONLY that wool which is recovered from unused articles

and waste.

The term “reused wool” is ONLY that wool from used articles.

Fleece wool is considered to be virgin wool, as salvage wool is considered substandard,

however, salvage wool may be used to add strength to soft new wool or to produce a less

luxurious product.

Today various synthetic fibers have been added as wool imitations and also for blending with

new wool. A substantial amount of wool is produced in the United States today in Texas,

Montana, Wyoming, Utah, Oregon, Idaho, New Mexico, Colorado, California and Ohio.

New England is the center for woolen cloth manufacturing. Australia, Argentina, New Zealand,

Russia, the Republic of South Africa, Uruguay, Great Britain, China and India are other wool

producers.

SWOT Analysis of Wool Industry

Strengths

1. Wool is natural, biodegradable, renewable, low carbon footprint,

2. Reduced micron of the wool clip over time has created the potential for finer, more

comfortable products,

3. Merino (wool) is seen as a luxurious and more comfortable than traditional wool

products, and has the potential to address consumer barriers to consumption,

4. The Woolmark is one of the world‟s most recognised apparel brand symbols.

Weaknesses

1. Supply vulnerable to prevailing weather conditions. The flock size has reduced

significantly over the last decade

2. Other farm activities provide higher and more reliable returns

3. Consumers on the whole are ignorant of wool‟s competitive benefits, origins,

environmental credentials

4. Existing consumer perceptions are dominated by old, unfashionable and uncomfortable

products

5. Given a long supply chain, wool represents a minor percentage of final apparel cost,

therefore cannot easily impact end consumer price and presentation

6. Retailers and brands have limited and decreasing knowledge of how to sell wool apparel,

and in many cases how to source fashionable saleable products

7. The Woolmark no longer connotes quality and has lost its connection with consumers

and value to some licensees

Opportunities

1. On farm, there is considerable room for management improvements and greater

productivity

2. Further progress on predation and infestation will lower costs of production

3. Natural fibre and low carbon footprints are relevant competitive benefits for a significant

proportion of the market

4. Product development and innovation has yielded successes in the challenges facing

woven product consumption

5. Wool lends itself to greater use in sports and performance apparel, in particular for its

benefits in moisture control, hygiene, temperature regulation and compression

6. Brands and retailers are looking for product “stories” and wool has one to tell

7. Marketing has changed, with more cost effective targeting now available through digital

and some traditional media

8. Rebuild perceptions of the Woolmark through attaching relevant fibre and product

information

Threats

1. Limited levels of productivity improvement have been evident in wool production, and

there is a need to ensure modern management practices and a market driven perspective

are adopted industry-wide

2. Labour availability has been restricted and remains under pressure; there is particular

concern for continued availability of shearers and wool classers

3. Limited early stage processing in Australia, most now processed in China, with lesser

amounts in Eastern Europe and India

4. While oil prices have continued to climb, albeit at a slower rate, man made fibres

continue to have a strong price advantage over natural fibres and in particular wool

5. At less than 2% share of apparel, manufacturers and retailers relegate wool to

6. niche product offerings

What is PEST Analysis ?

PEST stands for the analysis of the external factors which is beneficial

when conducting research before beginning a new project or to help

conduct market research. These factors are:

Political – Laws, global issues, legislation and regulations which

may have an effect on your business either immediately or in the

future.

Economic – Taxes, interest rates, inflation, the stock markets and

consumer confidence all need to be taken into account.

Social – The changes in lifestyle and buying trends, media, major

events, ethics, advertising and publicity factors.

Technological – Innovations, access to technology, licencing and

patents, manufacturing, research funding, global communications.

Pest can also be known as PESTLE which includes other factors such

as:

Legal – Legislation which have been proposed and may come into

effect and any passed legislation‟s.

Environmental – Environmental issues either locally or globally

and their social and political factors.

Unlike SWOT this strategy is more directly aimed at the external macro

environmental factors that might be affecting the position of your

business, the reasons behind growth or decline in the market and also

identify new directions for the business as a whole. Creately has some

excellent PEST analysis templates for you to get started instantly.

Understanding the Tool

Five Forces Analysis assumes that there are five important forces that determine competitive

power in a business situation. These are:

1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This is

driven by the number of suppliers of each key input, the uniqueness of their product or

service, their strength and control over you, the cost of switching from one to another,

and so on. The fewer the supplier choices you have, and the more you need suppliers'

help, the more powerful your suppliers are.

2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down.

Again, this is driven by the number of buyers, the importance of each individual buyer

to your business, the cost to them of switching from your products and services to

those of someone else, and so on. If you deal with few, powerful buyers, then they are

often able to dictate terms to you.

3. Competitive Rivalry: What is important here is the number and capability of your

competitors. If you have many competitors, and they offer equally attractive products

and services, then you'll most likely have little power in the situation, because suppliers

and buyers will go elsewhere if they don't get a good deal from you. On the other hand,

if no-one else can do what you do, then you can often have tremendous strength.

4. Threat of Substitution: This is affected by the ability of your customers to find a

different way of doing what you do – for example, if you supply a unique software

product that automates an important process, people may substitute by doing the

process manually or by outsourcing it. If substitution is easy and substitution is viable,

then this weakens your power.

5. Threat of New Entry: Power is also affected by the ability of people to enter your

market. If it costs little in time or money to enter your market and compete effectively,

if there are few economies of scale in place, or if you have little protection for your key

technologies, then new competitors can quickly enter your market and weaken your

position. If you have strong and durable barriers to entry, then you can preserve a

favorable position and take fair advantage of it.

Comparison of weaknesses of Egypt wool Industry with

opportunities of Indian wool Industry

WEAKNESSES OF EGYPT WOOL INDUSTRY:

Supply vulnerable to prevailing weather conditions. The flock size has reduced

significantly over the last decade

Other farm activities provide higher and more reliable returns

Consumers on the whole are ignorant of wool‟s competitive benefits, origins,

environmental credentials

Existing consumer perceptions are dominated by old, unfashionable and uncomfortable

products

Given a long supply chain, wool represents a minor percentage of final apparel cost,

therefore cannot easily impact end consumer price and presentation

Retailers and brands have limited and decreasing knowledge of how to sell wool apparel,

and in many cases how to source fashionable saleable products

The Wool mark no longer connotes quality and has lost its connection with consumers

and value to some licensees

OPPORTUNITIES OF INDIAN WOOL INDUSTRY

Favorable demographics in the domestic market; increasing young

Population coupled with rising income levels

Emergence of retail industry as a whole and development of various

malls provide huge opportunities for the apparel segments

Opportunities in product diversification (for e.g, Technical Textiles)

Change in consumption pattern, including rising demand for high quality

Premium fabrics and development of various products cater to global needs

Increasing working female population with higher propensity to spend

Compared with home keep

Replacement of the Multi Fiber Agreement (MFA) and integration of the

Textile industry resulting in huge opportunities for exports. Moreover,

Gradual development in the technical side of the industry provides an

Opportunity

Transfering Egypt’s Wool Industry’s Weaknesses into

Indian Wool Industry’s Opportunities

Here, by combining the weaknesses of Egypt wool industry and an opportunity of Indian wool

industry we can develop a good business relationship

Egypt not having favorable condition and that prevent the supply of wool, while India

having a favorable demographic condition. So, we can produce wool in India and it will

direct send to Egypt .this is helpful in overcoming the weakness of Egypt wool industry.

In India the malls and retail sector increased so it open an opportunities of new segment

for a woolen clothes.

Indian farmers having a good return in wool sector as other sector of agriculture while in

Egypt the farmers are not getting a good return as other sector of agriculture. so we can

use this weakness of Egypt as opportunity for an India

Egyptian people are dominated by unfathomable and uncomfortable product they are

ignorant of woolen product. so India can use this opportunity by converting unused of

wool product in to user of wool product and create a new segment for a wool product in

Egypt.

.

Egypt retailer and brand having a less knowledge that how to sell wool and how to source

a fashionable and seasonable product. while India having a good knowledge of

generating a fashionable and seasonable product so we can combine weakness of Egypt

and opportunity of India and develop a good market for a wool product in Egypt.

CONCLUSION

- Egypt not having favorable condition and that prevent the supply of wool, while India

having a favorable demographic condition. So, we can produce wool in India and it will

direct send to Egypt .this is helpful in overcoming the weakness of Egypt wool industry.

- In India the malls and retail sector increased so it open an opportunities of new segment

for a woolen clothes.

- Indian farmers having a good return in wool sector as other sector of agriculture while in

Egypt the farmers are not getting a good return as other sector of agriculture. so we can

use this weakness of Egypt as opportunity for an India

- Egyptian people are dominated by unfathomable and uncomfortable product they are

ignorant of woolen product. so India can use this opportunity by converting unused of

wool product in to user of wool product and create a new segment for a wool product in

Egypt.

- Egypt retailer and brand having a less knowledge that how to sell wool and how to source

a fashionable and seasonable product. while India having a good knowledge of

generating a fashionable and seasonable product so we can combine weakness of Egypt

and opportunity of India and develop a good market for a wool product in Egypt.

BIBLIGORAPHY

1. WWW.SOOPLE.COM

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5. http://www.legal500.com/c/egypt/developments/2903

6. http://www.eeaa.gov.eg

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sector.htm

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