Samaloti: the local product covers only 5% of the market’s consumption
“Lack of good marketing” is the most dangerous thing facing Rubiki’s factories
The Leather Industry Chamber of the Federation of Industries is preparing to bring in foreign experts by the end of May; With the aim of developing a plan to develop the sector and take advantage of the large local demand.
Jamal Samalouti, head of the Chamber of Leather Products at the Federation of Industries, said that the local production of shoes and leather products exceeds 4 billion pounds, while products valued at about 5 billion dollars are imported, equivalent to 78.4 billion pounds annually, meaning that the Egyptian industry covers about 5% .
He added that the market for shoes and leather products is large in Egypt. However, the national industry did not take advantage of these opportunities, for several reasons, foremost among which was the indiscriminate import.
He pointed out that the model being created in Rubiki, which includes 100 shoe factories and their products, serves as the nucleus for creating a complete city for shoes and leather goods.
Al-Samalouti explained that the chamber proposes that the 100 factories be a cluster, meaning that the factories include everything related to the shoe industry, from production inputs to the final product, provided that it includes factories for lace, cardboard, thread, glue, and everything that the industry needs.
The only obstacle facing these units at present is the inability to market them well. As the unit or meter price has not been determined by the government yet.
The head of the Chamber of Leather Products at the Federation of Industries said that the chamber sent to the Ministry of Trade and Industry its vision for this model, so that the area would be inclusive of all industry needs, which would depend on the natural leather produced in the city of Rubiki.
He continued, “We must not work in isolated islands as long as our goal is one, which is to develop the local product and take advantage of the market power .. Therefore, efforts must be integrated between the Ministry of Commerce and Industry, the Chamber of Leather Industry and those concerned with the industry.”
Al-Samalouti called on the Ministry of Trade and Industry to establish a committee whose purpose is to develop a plan to develop the shoe and leather industry, and coordinate with the Customs Authority and the concerned authorities, and present all problems and their proposals to solve them.
He explained the importance of the dealers in the sector having an influential opinion, and that it will be taken into account when making any decision regarding leather.
He pointed out that the chamber is currently coordinating with the Italian Trade Center and is discussing the sector’s needs from the Italian grant, which will be disbursed to the footwear and leather products sector in the city of Rubiki.
The chamber suggested setting up a technology center for training. To develop the footwear industry in Egypt, saying: “The sector is in dire need of providing a place for training … However, we seek to eliminate the mistakes that occurred in the tanning training center.”
The chamber also proposed setting up a production line at the training center for factories that are unable to make high investments to meet their needs.
It is expected that foreign experts will be brought in at the end of next May. To agree to develop a plan for the advancement of the shoe industry in Egypt, in cooperation with the Italian government through the Italian grant in Egypt.
With regard to the advantages that the Chamber provides to those who wish to develop their products and export abroad, he pointed out that the Chamber’s membership that requires a commercial registry and a tax card at least provides the owners of factories and workshops with multiple opportunities to develop products and provide training opportunities.
He added that the chamber is coordinating with banks and the Small and Medium Enterprises Fund to provide soft loans to those wishing to modernize and develop their workshops and factories. It also coordinates with the Environmental Compliance Office to provide loans at an interest rate of 2.5%, to be paid over 5 years for the development of equipment, with the installment starting from the second year of the loan.
Al-Samalouti stressed the need for companies to have membership in the Chamber and the Export Council, and to benefit from the support program, which provides 50% support on the cost of shipping to Africa, and a rate of not less than 12% of export burdens.
He pointed out that the chamber is going to seek the help of Italian experts to train in manufacturing and modern designs in coordination with the Industry Modernization Center, by relying on practical training in the production line inside Helwan University of the Chamber, and setting up theoretical courses inside the Chamber’s headquarters.
He said that the number of companies operating in the sector has reached 17,500, and more than 270,000 Prime Time Zone work in them, but only 1,200 establishments are registered in the Chamber.
The head of the Chamber of Leather Products of the Federation of Industries emphasized the importance of legalizing the status of those not included in the official system to take advantage of the benefits that the state currently provides to factories, and the trend to establish a city for leather products in Rubiki, especially in light of the new law for small and medium enterprises that set a definite tax on small and medium enterprises.
Al-Samalouti said that the state is currently moving towards developing solutions to problems that manufacturers faced in the past, especially with regard to taxes.
He pointed out that flooding the market with imported products is the most prominent challenge facing the development of the sector, saying: “There must be space for local factories to market their products and provide them with protection from poor imported products with low prices.”
He continued: “The market needs 220 million pairs of shoes annually, at the very least, if we assume the minimum consumption.”
He pointed out that if 50% of the import bill was saved, Egypt would benefit by about $ 2.5 billion annually, which is tantamount to an internal export.
Samalouti said that the sector suffers from multiple problems. There are two proposals, if they were implemented, their results would be quickly reflected in the local industry. The first is to legalize the import of shoes and import the face of the shoe from abroad, and the consequences of this decision will appear if it is decided in a period not exceeding two weeks.
The second solution is to return with the African countries and Russia to a system of equal deals, through the exchange of goods between countries with the same values, and this is done through governments. To be discharged. ”
He pointed out that this solution would be a lifeline in light of the shrinking global demand for various commodities at the present time, stressing the importance of benefiting from neighboring countries and the political dimension through the tendency to consolidate Egyptian relations with the countries of the continent, and to establish agreements with these countries to exchange goods through deals. Equivalents.
The sector is also currently suffering from a decline in the quality of leather materials. As a result of problems in raising livestock and being infected with diseases that affect the quality of the leather.
The article, head of the Leather Chamber: The use of foreign experts to draw up plans for developing the sector next May was written in the Al-Borsa newspaper.