The Egyptian textile industry has rapidly transformed into a major global investment corridor, dramatically shifting capital deployment patterns across the Mediterranean. As manufacturing groups face escalating utility tariffs and rising labor overhead in traditional textile centers, Egypt has emerged as a prime alternative.
By combining highly favorable free trade access to Western consumer markets with exceptionally low local operational baselines, the country has catalyzed a massive wave of vertical integration, drawing in major industrial players from Türkiye, China, and Italy.
At the International Textile Machinery Exhibition (ITM 2026) in Istanbul, Behnam Ghasemi, Editor-in-Chief of Kohan Textile Journal, conducted an exclusive technical session with Mr. Aly Nagy, Managing Director of ATAG Egypt. In this comprehensive editorial interview, Mr. Nagy breaks down the exact microeconomic variables behind Egypt’s manufacturing advantages, examines the reality of energy and labor pricing structures, and highlights the upcoming Stitch&Tex trade hub.
The Strategic Realignment: Vertical Integration from Yarn to Garment
Kohan Textile Journal: Welcome back, Mr. Nagy. In this segment, could you expand on the massive structural growth we are currently witnessing in the Egyptian textile sector?
Mr. Aly Nagy: Thank you, Behnam. We are seeing that Egypt is growing rapidly in terms of attracting all types of international textile investors. Right now in Egypt, you can already find a massive presence of Turkish, Chinese, and Italian companies actively operating across different industrial sectors. This wave started especially within the garment and ready-made clothing industry, where brands are taking complete advantage of the local manufacturing facilities and the duty-free trade agreements established between Egypt, the United States, and Europe.
What is particularly exciting now is that we are witnessing even bigger investments coming through as full vertical integration. Instead of just localized apparel assembly, international capital is backing integrated pipelines that span the entire production chain—from raw yarn spinning straight through to the final ready-made garments. Egypt is truly becoming a massive global hub for this industry, and this presence will continue to increase gradually.
5 Cents per kWh: Analyzing Egypt’s Massive Operational Savings.
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Kohan Textile Journal: What are the objective macro and microeconomic reasons driving this relocation of textile production to Egypt?
Mr. Aly Nagy: There are many objective reasons for this global shift. First of all is the strategic geographical location of Egypt as a central trade hub. From this central position, manufacturing plants can rapidly reach and supply major consumer markets across Europe, Asia, and Africa with highly competitive logistics timelines.
Second of all is the massive operational cost savings that you have in Egypt, especially regarding power and electricity. As an exact example, if you compare the kilowatt-hour (kWh) price in Egypt against Europe or Turkey, the difference is huge. Power in Egypt costs around 5 cents USD per kilowatt-hour, compared with 12 to 13 cents USD in the absolute best-case scenarios near Europe or in parts of Asia.
Furthermore, the labor cost structure is highly competitive for international brands. You are talking about average manufacturing wages of around $300 USD per month, which represents only 20% to 25% of the labor overhead found in alternative regional textile centers. When you combine these low power and labor costs with extensive free-trade frameworks across Europe and Africa, Egypt becomes an incredibly attractive, low-cost spot for any global investor.
The Market Outlook: Post-Crisis Boom and Stitch&Tex 2026
Kohan Textile Journal: The global market has faced severe economic adjustments and structural downturns recently. How do you view these macroeconomic cycles?
Mr. Aly Nagy: In this industry, we get used to navigating these crises from year to year. We have learned over the last 30 years that the global market operates on clear up-and-down cycles. It is true that the current economic downturn might be one of the longest peaks we have faced in the last three decades, but we are absolutely certain that it is only a matter of time before the market rebounds. The market will be booming soon. As soon as we get rid of the current global political situations that temporarily slow down long-term capital investments, the recovery will accelerate—though realistically, it may take another year to see full market stabilization.
To experience these developments firsthand and connect with the primary drivers of this growth, I am waiting for you all at our next major regional destination: Stitch&Tex, taking place from September 24th to 27th. It is going to be another phenomenal hub for high-level industry meetings and project deals.
