Could Egypt become the next clothing production hub by 2035?

In the first four months of 2025, Egypt’s Ready-Made Garments (RMG) exports reached a milestone, surpassing the $1 billion (around 860 million euros) mark. After the food and beverage industry, the textile and clothing industry is now the second largest industrial sector in Egypt. In 2024, the country’s textile exports increased by almost a fifth (18 percent) to $2.84 billion (of which $800 million was generated from denim exports), driven by demand in markets such as Europe, the United States and Africa. According to the Egyptian government’s modernization plans, this figure is expected to reach an ambitious $12 billion (10.29 billion euros) by 2031.

But is this figure really ambitious, or is the Egyptian textile and clothing industry simply on a growth path supported by many favorable factors? According to industry experts, the country could become the next major sourcing hub between 2035 and 2045.

“Demand is definitely growing much faster than supply. To me, optimistically, this makes Egypt a key manufacturing hub within the next 10 to 20 years,” said Taha Sharabati, director of weaving and denim dyeing at Sharabati Denim, at the first “Inside Denim — Raw Talk” webinar in November.

According to Magdy Tolba, chairman of T&C Garments Egypt, a joint venture between Egypt’s Tolba Group and Turkey’s Taypa Group founded in 2010, there is no reason why Egypt should not reach $40 billion (around €34 billion) in garment exports in the future, catching up with garment-producing countries such as Bangladesh.

“Egypt actually has the greatest potential,” he said at the Denims and Jeans trade fair in Cairo in February 2025. “We are in the middle of the world; the logistics are optimal, we are right between the Far East, where most raw materials come from, and the main markets, namely Europe and the USA,” he added.

FashionUnited took a closer look at the country’s strategic advantages.

Egypt’s strategic advantages

This is a big advantage Location. Due to its location directly on the Mediterranean, Egypt is in a favorable position for the European market. In addition, the proximity to the Suez Canal and the Red Sea makes it easier to ship products worldwide. For example, routes to the US take 12 days, compared to over a month from Asian ports.

This is also convincing young and growing workforce. Almost three fifths (58 percent) of Egypt’s approximately 118 million inhabitants are currently under 30 years old. Around 1.5 million of them, 50 percent of them women, are employed in more than 2,500 clothing factories.

A third advantage is that qualified workers. With roots dating back to around 5000 BC. The country’s textile sector looks back on a long history. From spinning and weaving to garment manufacturing, the government ensures that vocational training programs continually improve skills within the industry.

The vertical integration the Landes offers another advantage. Also resulting from the long textile and clothing tradition, the entire value chain is present in Egypt: from the cultivation of raw materials (mainly cotton) through the production of yarns, fabrics, filament yarns and fibers to the production of ready-to-wear clothing and home textiles. Due to its long staple fibers, Egyptian cotton is known for its durability and softness, making it a popular export commodity.

Low wages are a further incentive for many investors. Despite its advantageous location close to Europe, Egypt does not have the high wages found in Europe. In fact, with monthly wages between $140 and $240 (between 120 and 205 euros), Egypt has an advantage over closer sourcing destinations such as Turkey and Eastern Europe, as well as more distant ones such as Bangladesh, Pakistan, India and Vietnam.

A sixth advantage is this cheap electricity. The cost of electricity in Egypt is around 7 cents per kilowatt hour, compared to three to four times that amount in other sourcing destinations, such as China. While a majority (88 percent) of the electricity generated relies on fossil fuels, Egypt’s per capita CO2 emissions remain below the global average. The country has also committed to increasing the share of renewable energy sources from currently around 7 percent (mainly from hydropower) to 42 percent by 2035.

Domestic investments also contribute to Egypt’s incentives. The country is currently making major investments in advanced technologies (such as digital textile printing machines), systems and sustainable production methods to show its commitment to aligning with global standards, particularly EU legislation, as the EU is the country’s top export destination for textiles (35 percent), followed by Turkey (30 percent), the Middle East and North Africa (MENA; 23 percent) and Africa (10 percent).

This is an advantage that should not be ignored Infrastructure. The investments mentioned also include those in the country’s infrastructure in order to attract international investments and establish Egypt as a procurement location. The country promotes special economic zones such as the Suez Canal Economic Zone (SCEZ). Established in 2015, it covers over 461 square kilometers and is strategically located at the intersection of major international shipping routes along the eastern and western banks of the Suez Canal.

It includes a new major expressway connecting East Port Said to the regional network, six new road and rail tunnels, seven undersea tunnels under the Suez Canal to connect the Sinai Peninsula with mainland Egypt, and power, water and telecommunications networks. Nine planned factories and two service centers were announced in March this year amid previous textile clusters.

International investments prove to be an advantage and attraction at home and abroad. Prompted by additional US tariffs on China and rising wages, China has been looking for alternative sourcing locations in Bangladesh, Vietnam and Myanmar for some time. With its many advantages, Egypt also fits into the picture and secured around 70 million US dollars (around 60 million euros) from Chinese textile companies, including Zhejiang Holding and Jiangsu Haite Fashion Company, in June 2025 alone. Jiangsu Guotai signed an agreement in March 2025 for a $10 million (around 8.6 million euros) garment factory in the Suez Canal Economic Zone.

For Turkey, Egypt is also a strategic destination just across the Mediterranean, and many Turkish clothing companies have already made investments in Egypt. The relocation of machines to Egypt to expand their current production capacities is already underway and, according to Sharabati, these could be operational within the next six months to a year. For textile factories, he estimates the period to be two to three years, as it is a larger investment that is not so easy to set up.

The tenth and certainly not the last advantage is strategic trade agreements. Agreements such as the Egyptian Qualified Industrial Zone (QIZ) and duty-free market access to the EU work in Egypt’s favor. In addition, Egypt, along with Turkey, Morocco and others, has been exempted from any extraordinary US tariffs, keeping them at the minimum plus ten percent.

Conclusion

With several existing textile clusters near major cities such as Cairo, Alexandria and Port Said, as well as planned clusters and industrial zones in view of a growing demand for Egyptian-made clothing – both domestically and internationally – Egypt is emerging as an attractive sourcing location. In addition, a large pool of skilled labor and easy access to raw materials make it easy for companies to establish a base here – for example the global design and manufacturing company Delta Galil Industries.

“The fact that many factories are moving to Egypt is only positive for Sharabati and for any brand that wants to work in Egypt. Having more companies based in Egypt will help improve the infrastructure and create a more central location for clothing. One can source all the ingredients, accessories and buttons from the production sites in Egypt, creating a complete ecosystem around clothing production in Egypt,” concludes Sharabati.

“We are honestly very happy that a lot of people are coming to Egypt because it will make Egypt a safer location for many of the brands that want to produce in Egypt and have several different delivery operations,” he added.

While it remains to be seen whether Egypt will establish itself as one of the most important sourcing hubs within the next decade, the country appears to be well on its way to doing so.