“Political and International Environment in Egypt'' Submitted To

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

Mistry Mahammadirfan. A. 117240592008 Mr. Jignesh Gondaliya Patel Tejaskumar. N. 117240592013 Assistant Professor Patel Dhariniben. K. 117240592009 Patel Namrataben. D. 117240592016 Patel Pinkalkumar. D. 117240592021 Patel Bhavikaben .P 117240592022

MBA SEMESTER III K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER STUDIES, KAPDWANJ Affiliated Gujarat Technological University Ahmedabad 2012 - 2013 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.

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 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 39 members

4 Conclusion 40 5 Reference V.

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.

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.

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.

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.

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.

Political structure

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.

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.

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

Direct Taxes Indirect Taxes

Stamp duties Agricultural Land Tax

Building Tax General sales tax

Income tax Customs duties

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.

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

Tax revenue collected by central government Taxes payable by businesses Number Time to Profit Labor Other Total of prepare tax tax and Tax tax % of GDP Payments file and contributions rate pay tax Hours 2005 2010 June June June June June June 2011 2011 2011 2011 2011 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.

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.

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.

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

egypt labor force

2015

2010

2005

years 2000

1995

1990

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.

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

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.

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

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.

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 nonstop 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

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.

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 Tariff rate % VAT% value in Egypt pounds (LE) 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.

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

ITEM Customs estimated 1st – 3rd 4th – 6th value in Egypt Month Month pounds (LE) 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.

Cars with a maximum age of 5 years!

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

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.

 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

 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. 24

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 Tertiary Public Trained Primary expenditure expenditure Teachers school per student on education in pupil– % of GDP Primary Teacher per capita Education ratio Secondary 1999 2010 1999 2010 1999 2010 % of % of total % of total pupils GDP government 2010 per 2010 Expenditure Teacher 2010 Egypt ------3.8 11.9 - 27 India 11.9 - 24.7 - 95.0 - - - - -

Participation in Education

Gross enrollment Net enrollment rate Adjusted Children out of ratio Primary net School enrollment rate

% of relevant age Gross % of Age group % of primary Thousand group enrollment relevant school– primary school– Ratio age children age children Preprimary Primary Primary Secondary Male/ Male Female Secondary Female Tertiary 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.

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.

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.

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 Health workers Hospital Per Expenditure Beds capital Total Publi Out External $ PP Physici Physicians Communit per c of resourc P $ ans y 1,000 % of 201 Nurses pock es GDP % of 0 201 2005- and health people et total % of 0 2010 workers 2010 Midwives 2005 - % of total 2010 2005- 2010 total 2005-2010 2010 2010 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

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.

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.

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.

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.

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.

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.

3.2 International influence of Egypt

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

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 37

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.

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

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 _NTE_Reportasset_upload_file903_6565.pdf  httpwww.ustr.govarchiveassetsDocument_LibraryReports_Publications20012001 _NTE_Reportasset_upload_file903_6565.pdf  httpdata.worldbank.orgsitesdefaultfileswdi-2012-ebook.pdf  httpwww.enrecahealth.dknewse-learningImproving_Health_Service_  httpwww.hinduwisdom.infoIndia_and_Egypt.htmDelivery.pdf

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

Mistry MahammadIrfan. A. 117240592008 Mr. Amit Bachani Patel Tejaskumar. N. 117240592013 (Assistant Professor) Patel Dhariniben. K. 117240592009 Patel Namrataben. D. 117240592016 Patel Pinkalkumar. D. 117240592021 Patel Bhavikaben .P 117240592022

MBA SEMESTER III K.P.PATEL SCHOOL OF MANAGEMENT AND COMPUTER STUDIES, KAPADWANJ Affiliated Gujarat Technological University Ahmedabad 2012 - 2013

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

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.

II.

ACKNOWLEDGEMENT

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.

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 socioeconomic 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.

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 16 Textile Industry 1.8 Training program on Fiber Technology Spinning & 17 Textile Industry 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 24 Outlook 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 35 market 3.3 Domestic structure of the textile and clothing industry 36 in Egypt and India 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.

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 1

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 2

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 3

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 4

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 5

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 6

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 7

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 8

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 decentralized 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.

Page 9

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

Page 10

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 socioeconomic 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

Page 11

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.

Page 12

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.

Page 13

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.

Page 14

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

Dyeing and / Finishing Knitted Bleaching Finished Fabric Or printing Fabric

(b) Wet Processing of Woven Cotton Fabrics and / or Pre-treatment Woven fabric Singeing Mercerizing

(Desiring-scouring- bleaching)

Dyeing and / Finishing Finished fabric or printing

Page 15

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%.

Page 16

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).

Page 17

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.

Page 18

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.

Page 19

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.

Page 20

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.

Page 21

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.

Page 22

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.

Page 23

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

Page 24

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.

Page 25

2. Company Analysis

2.1 Textile Manufacturing Companies

Geographic Distribution of Companies in the Textile Sector

Spinning and Wool, Natural Dyeing, Tricot Ready- Weaving and Synthetic Printing and Made Governorate Manufacturin Manufacturing Finishing Manufacturing garment g 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%.

Page 26

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.

Page 27

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

Page 28

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.

Page 29

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:

Page 30

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.

Page 31

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

Page 32

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.

Page 33

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.

Page 34

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.

Page 35

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.

Page 36

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

2% 3% 8% Garments Home Textiles 12% Cotton Yarns Cotton Fabrics 75% Textiles

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

Page 37

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 38

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 39

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.

Page 40

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.

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 41

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.

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 42

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 43

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 Total Exports Total Imports Total Year to Egypt from Egypt Trade US $ Million US $ Million 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 44

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 45

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 46

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 socioeconomic 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 47

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.

Page 48 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

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

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 Atish S. Shah Signature:- Jacky P. Shah Harshit B. Shah Date: - 19th Nov. 2012.

I 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.

II 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.

III 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.

IV 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.

V 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.).

VI 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

VII 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.

VIII 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

IX 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.

X  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.

XI 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

XII

1 The Role of Economical Environment in Egypt:-

Introduction:-

Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley, where most economic activity 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 relatively high levels of economic growth in recent years, living conditions for the average Egyptian remained poor and contributed to public unhappiness. After unrest exploded in January 2011, the Egyptian Government drastically increased social spending to address public dissatisfaction, but political uncertainty at the same time caused economic growth to slow significantly, reducing the government's revenues. Tourism, manufacturing, and construction are among the hardest hit sectors of the Egyptian economy, and economic growth is likely to remain slow at least through 2012. The government is utilizing foreign exchange reserves to support the Egyptian pound and Egypt may seek a loan from the International 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.

2 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.

3 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.

4 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.

Year Mar Jun Sep Dec Egyptian GDP Growth Data Table:- 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.

5 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.

6 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.

7 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.

8 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

9 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

10 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:-

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

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.

11 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.

12 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.

13 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.

Year Jun 2011 -7.90 2010 -8.10 2009 -6.60 2008 -6.80

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 Thousand

Unemployed Persons 3395.00 3383.00 3395.00 2022.00 Persons

14 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:-

GDP Exchange Interest Inflation Current Unemployment Government Country Continent GDP Growth Rate Rate Rate Account Rate 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 408 3.20 8.6445 5.00 5.50 -152600 25.50 -4.80 Africa United Asia 360 4.20 3.6732 1.00 1.05 113 4.60 2.90 Arab Emirates United Europe 2432 1.00 1.6024 0.50 2.20 -20767 7.90 -7.80 Kingdom United America 15094 2.00 119.8900 0.25 2.00 -117 7.90 -8.70 States

15 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.

16 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).

17 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

18 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,

19 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

20 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

21 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 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 Company Industry Revenue Profits Assets Market Rank (billion (billion (billion Value $) $) $) (billion $) 785 Orascom Construction Construction 2.42 11.83 17.21 4.16

Industries

846 Orascom Telecom Telecommunications 4.83 2.08 11.42 3.15 Services

1384 Telecom Egypt Telecommunications 1.80 0.43 6.19 4.51 Services

22 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 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.

25 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

26 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%

27 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 .

28 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: [email protected] 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.

29 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.

30 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:-

31 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.

32  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 Economy Stats: Egypt Vs. India:- Egyptian Indian Economy Economy stats

stats

Leader

President: Mohammed Mursi President: Pranab Mukherjee 1.3% 0.3% Aid as % of GDP Ranked 79th. 3 times more than India Ranked 113rd. 1.65 1.5 Economic freedom Ranked 112nd. 10% more than India Ranked 123rd. $3,233,200,000.00 $356,100,000.00 Exports to US Ranked 19th. 8 times more than Ranked 61st. Egypt $334,400,000,000.00 $4,164,000,000,000.00 GDP Ranked 5th in 2006. 11 times Ranked 33rd in 2006. more than Egypt 9.23 annual % 4.94 annual % GDP growth > annual % Ranked 14th in 2005. 87% Ranked 84th in 2005. more than Egypt $4,435.20 per capita $3,751.99 per capita GDP (per capita) Ranked 116th in 2006. 18% more than India Ranked 121st in 2006. $625.00 $509.00 GDP per capita in 1900 Ranked 38th. 23% more than Ranked 40th. Egypt $517.00 $597.00 GDP per capita in 1950 Ranked 49th. 15% more than Ranked 52nd. Egypt $947.00 $853.00 GDP per capita in 1973 Ranked 49th. 11% more than India Ranked 50th. $282,026,000,000.00 $3,362,960,000,000.00 GDP > PPP Ranked 4th. 11 times more than Ranked 30th. Egypt Gross national income > 472780500000 28322300000000

constant LCU Human Development 0.659 0.602 Ranked 120th. 9% more than India Index Ranked 128th.

Income distribution > 4.4% 3.5%

Poorest 10% Ranked 5th. 26% more than India Ranked 22nd.

Income distribution > 25% 33.5% Ranked 38th. 34% more than

Ranked 91st. Richest 10% Egypt 44.2 3.1 Population under $1 a day Ranked 11th. 13 times more than Ranked 51st. Egypt Poverty > Share of all poor 0.18 % of world's poor 41.01 % of world's poor Ranked 1st. 227 times more than

Ranked 33rd. people Egypt

Research and development 1.9% 0.6%

spending Ranked 13th. 2 times more than India Ranked 39th. 0.24 0.2 Technological achievement Ranked 51st. 20% more than India Ranked 59th. Wealthier Person Nassef Sawiris ($3.1bn US) Mukesh Ambani ($19.5bn US)

35 petroleum products, textile Crude oil and petroleum products, cotton, goods, gems and jewelry, Exports textiles, metal products, chemicals. engineering goods, chemicals, leather manufactures External Debt $33,740,000,000 US $289,700,000,000 $ Indian rupees (INR) per US Egyptian pounds (EGP) per US dollar - 5.4 dollar - 43.319 (2008 est.), Exchange Rate (2008 est.), 5.67 (2007), 5.725 (2006), 5.78 41.487 (2007), 45.3 (2006), (2005), 6.1962 (2004) 44.101 (2005), 45.317 (2004) United Nations Development Program. Human Development Report SOURCE: 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.

36 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 WEBSITES:-

 http://www.mop.gov.eg/MOP_META/nsdp.htm

 [email protected]

 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

XIV

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

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 Atish S. Shah Signature:- Jacky P. Shah Harshit B. Shah Date: - 31th March, 2013. Trushal B. Ka.patel

I 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.

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.

II 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.

III 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.

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.

IV 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.

V  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.

VI 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.

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.

VII 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 4.5 lakh MT, Traditional 3 lakh MT & Export of jute goods 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.

VIII 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.

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.

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

IX 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.

X 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.

XI  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.

XII 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: 26 Competitive Analysis 27 PEST Analysis 31 SWOT Analysis 33 Market Entry Mode 35 Trade Barriers 37 Recommendations From Analysis 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

XIII

1 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

2 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.

3 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 insulating and antistatic properties, as well as having low thermal conductivity and moderate moisture regain. It includes 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, sulphur, reactive, and pigment dyes. Jute can also be blended with wool. By treating jute with caustic soda, crimp, softness, pliability, 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.

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:-

4 The Jute Production Process Chart:

5 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

6 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

7 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 interwoven 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.

8 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 Indian Jute Industry: The following table gives brief overview about the Indian Jute Industry.

Size of the India today has around 78 jute mills Industry Jute mills are located in West Bengal, Andhra Pradesh, Geographical Assam, Odisha, Uttar Pradesh, Bihar, Tripura and distribution Chhattisgarh The Indian Jute Industry today accounts for a turnover Output per of Rs 6,500 crore annually, contributing to exports to annum the tune of nearly Rs.1000 crore.

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.

11 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.

12 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 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

15 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

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

17 Table: Consumption of Jute Products

Actual (Tonnes) Growth Rate (%) 1988 -1990 1998 – 2000 1988-90 to 1998-2000 (Average) (Average) 1998-2000 to 2010 Developed 668,000 395,000 -5.2 -1.8 Countries United States 108,000 72,000 -4.4 -4.3 European Union 224,000 178,000 -3.6 -1.6 (15 Nations) Developing 2,786,000 2,499,000 -0.8 -1 Countries 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

18 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.

19 Table: Export of Jute Products by type from Egypt In ‘000 tons (1 tons = 1000 Kg)

Manufactures Year Yarn & Twine Gunny Bags Total Fabrics 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.

20 Table: World Import of raw Jute, Kenaf and Allied Fibres from 2001 to 2011 In „000 tonnes (1 tonne = 1000 Kg)

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

Source: Food and Agriculture Organization (FAO)

21 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)

22 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.

23 Govt. Department/Ministry Dealing with Jute:

 Ministry of Trade and Industry Arab Republic of Egypt. 2 Latin America, Garden City, Cairo. E-Mail: [email protected] Telephone: +202-27921178. Fax: +202-27957487.

 Ministry of Foreign Affairs, Egypt Tel: 25796334 - 25746872 - 25746871 - 25796338 – 25796342. Foreigners and Legalization Affairs: [email protected] 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

24 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 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.

27 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 44 44 44 44 44 44 Consumption 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.

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.

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 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 & Allied Fibres: World 2724.13 3021.1 2997.32 2596.6 2883.9 Developing 2717.13 3014.1 2990.32 2589.6 2876.9 Countries 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 39.37 39.91 39.07 38.5 38.5 and Caribbean Africa 13.19 13.29 13.29 13.3 13.3 Near East 3.7 3.7 3.7 3.7 3.7 Developed 7 7 7 7 7 Countries

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.

30 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

31 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.

32 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: Weaknesses:

 Advancement of jute-fiber technology  Quality certificate for jute products from and bio technology. India also has the India may not be accepted in Southeast national research center of jute and kenaf. Asian - African nations.

 India is normally the largest producer of  The image of many Indian firms does not jute products. have a good recognition in Egyptian market, except automobile firms from  Business form of joint venture will India. support the cost reduction in investment in Egypt.  Lack of cooperation between jute related organizations and governments in India.  Jute industry of India had a turnover of 1.625 billion US dollar (65 billion Indian  Environmental problems. rupees) annually.  Low level of labor productivity due to  In case, Egypt has not a sufficient amount inadequate formal training / unskilled of jute production. Indian firms can labor import raw jute or bleached jute from its manufactures in India.  Little brand image.

 Easy availability of low cost of labor.

33 Opportunities: Threats:

 Raising demand of green products in  Market perception is still thinking that Markets across the world and Egypt. jute products are belonged to traditional market, for example sacks.  Market in Egypt means a market for foreigners, because Egypt is one of the  Competition from the potential rival, most attractive tourist countries. likely to Bangladesh, because they have a longer experience in the product  India and Egypt have set up FTA. So, diversification of jute. Also, Bangladesh there are no barriers of the move of raw is the largest exporter of jute products to jutes. the world.

 Egypt had a great potential to produce  It may be hard to expand the area of jute jutes more than it does now. Also, Egypt farm, because jute farms are a competitor is producing jute for domestic of cassava farms in Egypt. consuming.  Polypropylene woven bags (PP bags) are  Price of jute products in Egypt is allowed to trade freely in Egypt. cheaper over time.  Jute products in Egypt lacked of product  Egypt has a geo-strategic location, diversification. because it is located in the center of Africa. This will support logistic and product distribution.

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.

34 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.

35 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.

36 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.

37 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 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

 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)

SSuubbmmiitttteedd bbyy MMBBAA SSEEMMEESSTTEERR IIIIII((KKSSMMCCSS)) ((BBaattcchh ::: 22001111--1133))

KKiiinnjjjaalll SShhaahh ::: 111177224400559922000011 RRaahhuulll SShhaahh ::: 111177224400559922000022 RRiiittteesshh SShhaahh ::: 111177224400559922000044 VViiippuulll PPaattteelll ::: 111177224400559922000066 HHiiitttiiixxaa GGoorr ::: 111177224400559922001100 PPaarrttthh SShhaahh ::: 111177224400559922001199

SSuubbmmiiitttttteedd tttoo ((KKSSMMCCSS)) IINN PPAARRTTIIAALL FFUULLFFIILLLLMMEENNTT OOFF TTHHEE RREEQQUUIIRREEMMEENNTT OOFF TTHHEE AAWWAARRDD FFOORR TTHHEE DDEEGGRREEEE OOFF MMAASSTTEERR OOFF BBUUSSIINNEESSSS AASSMMIINNIISSTTRRAATTIIOONN

IInn

GGuujjjaarraattt TTeecchhnnoolllooggiiiccaalll UUnniiivveerrssiiitttyy UUNNDDEERR TTHHEE GGUUIIDDAANNCCEE OOFF FFaaccuullltttyy GGuuiiiddee AAjjjaayy TTrriiivveeddiii

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.

i | 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.

ii | 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.

iii | P a g e

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

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

1 | 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

 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

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.

2 | P a g e

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.)

3 | P a g e

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.

4 | 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:-

5 | P a g e

 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

6 | P a g e

“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.

7 | 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.

8 | P a g e

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.

9 | P a g e

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

10 | P a g e

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.).

11 | P a g e

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.

12 | P a g e

 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

13 | P a g e

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.

14 | P a g e

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

15 | 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

16 | 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.

17 | 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.

18 | 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.

19 | P a g e

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)

SSuubbmmiitttteedd bbyy MMBBAA SSEEMMEESSTTEERR IIVV((KKSSMMCCSS)) ((BBaattcchh ::: 22001111--1133))

IInn

GGuujjjaarraattt TTeecchhnnoolllooggiiiccaalll UUnniiivveerrssiiitttyy UUNNDDEERR TTHHEE GGUUIIDDAANNCCEE OOFF FFaaccuullltttyy GGuuiiiddee DDrr... AAjjjaayy TTrriiivveeddiii

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.

i | P a g e

PREFACE

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.

ii | 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.

iii | 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.

iv | 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

v | 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

vi | 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.

vii | 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.

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.

viii | P a g e

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 31 & India

11. Conclusion 33

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

Page 1

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).

Page 2

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 Page 3

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.

Page 4

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.

Page 5

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

Farmers Public Coop & PBDAC Inputs

Seed Cotton

Co-operative Collections Centers (ca 2000)

Seed Cotton

Public Trading Companies (6)

Public Ginners (5)

Lint Cotton Lint Cotton

Local textile industry Alcotexa registered traders

World cotton market

Page 6

 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.

Page 7

• 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.‖

Page 8

Trade, Production and Consumption of Cotton

 Egypt

Year Total production Consumption 1000 Productivity kg/fa 1000 tonnes tonnes

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 9

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.

Page 10

 India

Cotton Area lakh Cotton production Cotton Cotton Year Hectares Yield Consumpt Lakh bales of In 000 Tonnes 170 kg. ion

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)

Page 11

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.

Page 12

 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.

Page 13

 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.

Page 14

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 

Page 15

 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 16

 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 17

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 18

(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 19

 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 20

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 21

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 22

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 23

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.

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 24

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 25

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 26

 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 27

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.

Page 28

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

29 | P a g e

TOP COMPANIES IN EGYPT

 Aldcroft Cotton Ltd.  Eastern Cotton Company  Benha Cotton Trading Co.  Egycot Co.

30 | 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.

31 | 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.

32 | P a g e

Conclusions

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

33 | 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.

34 | 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

 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

ix | P a g e

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

GUIDED BY: SUBMITTED BY:

1.Dhaval Shah (117240592005) Ms. Disha Bhagat 2.Ripal Gadhvi(117140592015) (Assistant Faculty) 3.Madhvi Prajapati(117240592020) 4.Bhargavi Patel(117240592014) 5.Nisha Chaudhari(117240592018) 6.Nidhi Patel(117240592012)

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) 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 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).

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:

 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

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).

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 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 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.

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

Report

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

SUBMITTED BY: GUIDED BY:

1.Dhaval Shah (117240592005) Ms. Disha Bhagat 2.Ripal Gadhvi(117140592015) (Assistant Faculty) 3.Madhvi Prajapati(117240592020) 4.Bhargavi Patel(117240592014) ()()fsdfsd 5.Nisha Chaudhari(117240592018) 6.Nidhi Patel(117240592012)

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)

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 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.

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.

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

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.

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.

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.

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.

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 Production indigenous wool: Quantity Year (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 & 7300 Kashmir 3 Karnataka 7165 4 Andhara Pradesh 4605 3 Gujarat 2919 4 Maharashtra 1726 5 Himachal 1614 Pradesh (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.

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.

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 53.08 1282.59 Nov. 2011)

(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.

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

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:

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.

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

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

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

6. http://www.eeaa.gov.eg

7. https://www.google.co.in/search?q=top+5+company+in+wool+industry+in+india&ie=utf -8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&safe=on&safe=on

8. Mindtools.com

9. http://www.india-crafts.com/business-reports/indian-textile-industry/woolen-textile- sector.htm

10. http://www.wikiwealth.com/commodity:wool

11. http://www.wikiwealth.com/swot-analysis:wool