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ILO spins a dark yarn for luxury sector

Arab Spring economies: Textile workers in Egypt have traditionally been among the most active in their demands for better working conditions and higher wages

Textile workers in Egypt have traditionally been among the most active in their demands for better working conditions and higher wages.

Although strikes may have had an impact on cotton production in Egypt, decreasing the nation's competitiveness against other producers in Africa and China, analysts suggest the industry's overall cost structure is unfavourable.

Wages, which account for about 30 per cent of a garment's production price, are higher than in other countries, according to a report from the International Labour Organisation (ILO).

The cost of producing cotton in Egypt is $0.82 per operator hour, which is more than one and a half times higher than mainland China ($0.48) and Sri Lanka ($0.46), and about three times that of Vietnam and Bangladesh ($0.28).

But even disregarding such costs, the ILO report cites the inefficiency of the state-owned sector as one of the reasons for weakening the cotton sector. "Having enjoyed high levels of protection [from the state], firms in this sector produce high-cost, low-quality products," the ILO report says. "Substantial public investments have not been made in the spinning and weaving sector for many years. For example, most machinery used by public sector firms is more than 15 years old."

One solution may would be to concentrate on producing cheaper cotton and move away from luxury fibre production - reducing costs and managing workers' expectations.

business@thenational.ae

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