Apparel exports in Egypt are on a major upswing. Fueled by the U.S. trade war, the ongoing challenges in Turkey and the country’s aggressive strategy to entice foreign investment, Egypt is attracting attention from a slew of production companies eager to set up shop. Once there, they’re leveraging the country’s mix of speed, savings and solid infrastructure to solidify business from brands and retailers around the world.
Once a relatively quiet player in global sourcing, it’s no wonder why the country is now moving up the sourcing matrix as brands look for faster, more flexible options outside of Asia. Its location gives it a big leg up—thanks to shorter lead times to both the U.S. and Europe — while its low-cost, skilled workforce makes it an attractive bet. Add in benefits like duty-free access through the Qualified Industrial Zones (QIZs) and free-trade deals with the EU, and Egypt is checking off a lot of critical boxes for sourcing executives in need of a new solutions. Plus, the nation offers a long history in textiles and vertical operations.
Overall exports from Egypt’s garment industry were up 23% through the first 8 months of the year, ending at $2.2 billion. This trajectory puts the country on track to surpass its $3.5 billion sales goal for 2025 and break an historic record. Through August, Egypt exported $877 million in garments to the U.S., it’s largest apparel export partner, a 14% increase over the same period in 2024. Meanwhile exports to the EU were up 36% to $558 million.
Those numbers are buoyed by the fact that Egypt is one of the rare countries benefiting from the current geopolitical environment. The 10% tariff on goods bound for the U.S. gave the country a boost, compared to the average 20% competitors were slapped with.
Fadel Marzouk, chair of the Apparel Export Council of Egypt (AECE), called the tariff “a real opportunity” at the time of the announcement — one they were prepared for.
Marzouk told the Daily News Egypt that the AECE began laying the groundwork for a surge in the sector early in Trump’s first administration. “At AECE, we’ve developed a comprehensive strategy to boost the sector’s competitiveness. This includes attracting foreign direct investment, expanding domestic manufacturing, optimizing supply chains, and increasing export volumes,” he said.
With the U.S. tariffs compounding the country’s advantages, Cenker Akdemir, CRM Director for Egypt’s Eroglu Garment, told HGI the impact has been noticeable.
“As brands diversify from China and seek faster delivery to Europe, Egypt stands out,” he said. “There’s a clear uptick, driven by nearshoring and risk diversification.”
Akdemir noted EU brands and retailers are looking for speed and sustainability compliance, while customers in the MENA region and Turkey need overflow capacity and short lead times. He said U.S. customers in the mid to specialty tier that are focused on basics, workwear and home textiles are drawn by the QIZ, which allows garments produced in designated Egyptian zones and comprised of the requisite Israeli inputs to enter the U.S. duty-free.
Plus, with the future of AGOA unknown, buyers from the U.S. are shifting orders from countries that had been enjoying free trade to Egypt. Akdemir hopes this will be more than a short-term gain.
“The upside is targeted, not broad. Programs built on AGOA’s duty relief (e.g., East Africa basics) may trial Egypt, but sustained volumes hinge on consistent QIZ compliance and competitive foreign currency and input costs,” Akdemir said.
Existing free-trade agreements like the Common Market for Eastern and Southern Africa (COMESA) also help bolster the country’s competitiveness. Additionally, the EU-Egypt Association Agreement allows goods, including apparel, that comply with the rules of origin to enter the region duty-free. And just last month, an agreement was reached on origin rules for textiles and apparel under the African Continental Free Trade Area (AfCFTA), which is designed to pull down trade barriers across the continent.
All that said, the country is not without its challenges.
“Disruptions in the Red Sea/Suez are pushing up freight and insurance costs. Energy price swings and foreign currency constraints are squeezing working capital. A weaker Egypt pound improves export competitiveness but raises the cost of imported inputs,” Akdemir said.
Even so, there’s no question that the country is on the sourcing radar in a way it hasn’t been in the past. For Hong Kong-based supply chain management company CFL, Egypt was always in the mix but not as a major player. Of its 13 local offices, countries like Pakistan, Bangladesh, Cambodia, Guatemala and the Philippines were more dominant.
“We had not done Egypt as proactively, but now Egypt is much more a viable opportunity,” CFL president Steve Trayner told HGI. “We had a footprint there that was, in comparison to our other Asian business, not as significant, but our team in May literally went to Egypt for two weeks and leaned in deeply to look at what it means to expand that region, not knowing what the future would be for any of the East Asian scenarios.”
Traynor credits Egypt with very advanced lines for activewear and outerwear fabrics, and though the region had historically commanded very high MOQs, CFL has found partners that can work with smaller orders. Additionally, he said with the relative tariff break, the math now makes sense even if there’s a markup associated with falling below the required minimums.
An influx of investment
Thanks to interest like this, Egypt is expected to achieve 35% growth in apparel and textile exports this year. And the country seeks to raise its profile further by increasing the number of investors looking to set up export operations there.
“The expected rise in exports is driven by significant growth in foreign direct investment in Egypt’s garment sector, particularly from Turkey, Vietnam, and China,” the AECE’s Marzouk told the Egyptian Streets publication.
Turkish operations, in particular, are flowing into Egypt as those companies look for a lifeline. Despite the country’s quick-turn capabilities, added-value offerings and advanced sustainability adoption, Turkey continues to lose market share in the face of inflation, labor woes and energy costs. And Turkey’s loss is often Egypt’s gain.
While around 6,000 textile and apparel companies have closed in Turkey over the last three years, The Turkish Minute reports 200 Turkish textile factories have opened in Egypt.
In August, Turkish-based Nil Orme committed to open a $35 million textile and apparel factory, citing the country’s trained technical labor force and competitive energy prices as leading catalysts. That same month, Turkish conglomerate Şahinler Holding announced plans to open its fourth garment factory there, this one a 50,000 square meter facility dedicated to Zara. The company is also planning to expand its existing production lines in Egypt.
“The textile sector in Turkey is facing challenges, but our factory in Egypt is performing well. We have doubled our investment there,” Şahinler chairman Kemal Şahin said in a statement.
In a private-public deal with Egypt’s economic development arm the Suez Canal Economic Zone, Turkey-based Eroglu Holding Company broke ground on its $51 million Eroğlu Egypt Readymade Garments project late last year. When completed, the facility is expected to employ 5,000. To date, Ergolu operates 15 locations in Egypt, a number it plans to grow to 100 within 5 years, according to Sahin Eroglu, chairman of Eroglu S.C. Readymade Garment Group. This project is Ergolu’s second Turkish investment in the Qantara West industrial textile zone. The first was for a jeans factory set to produce 7.2 million pairs annually.
“The region offers strong industrial infrastructure, a growing supplier base, and proximity to key ports and highways-ideal for nearshoring models that require speed and reliability. Eroğlu intends to make Eroğlu SC (in Qantara West) a flagship hub for compliant, integrated manufacturing, creating quality jobs, catalyzing local supply chains, and positioning Egypt as a long-term, tariff-stable sourcing partner,” Akdemir explained.
Just over the last few months, commitments have poured in from multiple foreign-based companies into the zone, including Pakistan’s Interloop Group, which has committed to a $35.2 million factory. The investment in Egypt is part of the company’s strategy to diversify its operations, which are primarily focused on Pakistan, Sri Lanka and China currently, and Hilda McDuff, president of Interloop North America, acknowledged there are plenty of additional benefits to producing there.
“The goal for that facility is to provide country of production diversification, but also efficiencies within certain products. Socks will be the first category that will be manufactured in the new facility. Transport times are expected to create favorability as well,” she said.
Of course China is also active in the region. With a $25 million commitment for a fiber and fabric production facility, China’s Bridge-Tex is expected to house 18 spinning lines, more than 100 fabric production lines and six lines for printing and dyeing.
“With 80% of our production destined for European and American markets, we are leveraging Egypt’s strategic advantages, Chinese technology, and global demand. This model will significantly contribute to increasing Egypt’s textile and garment exports beyond the $10 billion mark annually,” Zang Li-hua, president of Bridge-Tex, said in a statement.
Additionally, 2026 will see the opening of a $60-million, 5,000-ton production facility for flax yarn by Kingdom Holdings Limited of China, and China’s ShuanFeng is investing $8 million in an apparel factory with a production capacity of 16.5 million pieces.
A continued rise?
Fueled by this influx of business, the AECE plans to raise exports to $12 billion by 2031. To meet this ambitious target, Egypt is pouring investments into the sector.
“The government is working on modernizing their state-owned assets. they have, for example, a lot of spinning, weaving, finishing facilities that they are looking to modernize, the equipment that they use. They are also having a lot of new industrial zones being built,” said Ahmed Heiba, business development specialist for Glass Textile, which produces woven bottoms for Hugo Boss, Boggi Milano and Replay. “And they are improving the ports and improving how they manage the ports logistically to make sure that the time and the lead time is decreased.”
In addition to the QIZ, the government has established a variety of cash rebates, tax and customs incentives, and export credit insurance. Most recently, Egypt announced it has doubled the budget for the Export Burden Rebate Program, which is a partial refund for things like logistics costs, sustainability compliance and energy efficiency for exporting companies.
Akdemir would like to see more. He has a laundry list of ways the government could make the country even more attractive to export partners, including supporting fiber and accessories production to reduce the reliance on imports, making access to capital easier for raw material purchases and sustainability improvements, stabilizing energy prices and simplifying VAT/tax rebates.
Beyond the efforts at a federal level, Akdemir said individual producers must also work to excel at key differentiators like wastewater treatment, traceability and renewable energy. While making these improvements calls for major capex expenditures, stricter ESG legislation leaves little choice. “Producers that meet these standards are winning longer contracts and stronger margins,” he said.
Jamin Dick, CEO of J. Dick Advisory and former supply chain executive at Lands’ End and Alibaba, would like to see the suppliers there level up the technology in their production facilities. While he credits Egypt for its long staple cotton, in his experience it takes some handholding to ensure the product comes out as envisioned. “When you get it right, it is very nice product,” he said. “The challenges are, their industrial processes are not as good as China, and so you have to manage it carefully, because they’re not as good on the kind of full digitized design and development side of things. And nowadays, factories really have to be part of that process.”
Heiba also thinks Egyptian factories, in particular, need to be careful to remain competitive in a market becoming saturated with foreign players, or they could be overshadowed. Primarily, he said, homegrown companies need to do a better job of upskilling and supporting their workforces.
“When we see a lot of foreign investment coming from countries like Turkey, like China, they have a lot of know-how in terms of how they produce the product. So, they are very advanced in terms of the technical, the human capital. And they have maybe, very good education systems on how to manage production,” he said.
Heiba also pointed to sustainability, operations and efficiency as areas where locally-owned facilities must work to remain competitive. Otherwise, there’s the chance that the country could win and the individual Egyptian manufacturers could lose.
“There is a very positive outlook overall, but there is a risk that it would be attained [by] the foreign investment, as opposed to the local manufacturers,” he said.
To this end, Glass Textiles is offering more value-added services to stand apart from the crowd. In addition to continuing it’s focus on sustainability, the company is improving its styles and garment dye program. Heiba said design services are also an important offering because many factories there don’t offer them to their overseas clients, Heiba said.
“A lot of factories have their design and product development team that they use for their own local clothing brand but they don’t offer these to their global brands so this is still kind of a gap that we need to fill.”
