Promoting Industrial Growth and Encouraging Foreign Direct Investment in Egypt
Leather Industry
Responsible Entities
- The problem of distressed and stalled factories; the Ministry of Trade and Industry should explore different options to support these factories so that they resume operations.
- The problem of smuggling raw leather outside the country by circumventing the ministerial decrees regulating leather exports.
- Strengthen control measuresat customs points, free zones, and transit areas.
- Criminalize smuggling and categorize it as a crime against honor.
- Confiscate seized goods, and enforce Article 15 of Law No. 118 of 1975 (Import and Export Law).
- Halt exports of unfinished leather.
- Support promotion tours to boost the leather-based industries in international markets.
- The industry lacks key support infrastructure, namely technological innovation and leather fashion design services. Currently, there is only one center, affiliated with the Ministry of Trade and Industry, that provides such services to the entire sector. The industry can benefit from the establishment of many such centers to assist with developing production technologies and raising product quality.
- Lack of skilled labor.
- Allocate funds for setting up training and technology development centers to help improve the competitiveness of the industry.
- Increase the availability of leather-based industries professional programs in industrial secondary schools and vocational training centers; offer incentives to enrolled students, and work with large leather-based industries to offer students apprenticeship opportunities.
- The unjustified dramatic increases in imports of low-quality footwear and leather products that do not conform to the standard specifications are negatively affecting the industry. This spike in low quality imports is due to manipulative practices by some importers, who present to customs fraudulent import invoices that do not reflect the real production cost in the country of origin. It should be noted here that while reference price lists are used for verifying the declared value of the imports of footwear and other leather products, yet, some importers are still able to circumvent this system, by entering their imports under a customs sub-category that is not subject to the application of reference price lists.
- Revise the current reference price list used for clearing imports of footwear and leather products; adopt the reference price list developed by Leather Industry Chamber. The latter was developed based on the actual costs of manufacturing footwear and leather products and can be used to assess the customs duties on imported products, particularly in light of the fake and fraudulent invoices submitted by importers.
- Keep a strict watch on the market to combat the dangers of the phenomenon of low-quality products, which can lead to the collapse of the leather industry.
