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April 10th 2008

Textile City: An Egyptian-Italian Partnership For Success. April 10th 2008. This document reproduces the elements of a visual presentation. It is incomplete without the oral comments which accompany it. Structure of the presentation. 1. Egypt & Setcore. 2. Textile City in Borg El Arab.

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April 10th 2008

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  1. Textile City: An Egyptian-Italian Partnership For Success April 10th 2008 This document reproduces the elements of a visual presentation. It is incomplete without the oral comments which accompany it.

  2. Structure of the presentation 1. Egypt & Setcore 2. Textile City in Borg El Arab 3. Government support and facilities

  3. Egypt is a natural destination for textile investment • The land of the finest long & extra long staple cotton • Strategic geographic location • Bridging Europe, Asia and Africa • Proximity to European ports • Young, abundant and competitive labor force • A working population of 22 m • 41% of the population between 15 and 39

  4. One of the most competitive countries for industrial investment COST ITEM (in USD) EGYPT JORDAN TURKEY INDIA ITALY Labor hourly wage 0.40 (1.15) 0.90 2.80 0.50 15 Electricity/KW 0.03 0.05 0.077 0.086 0.09 Water/M3 0.21 1.80 0.46 0.70 0.28 Natural Gas /M3 0.035 N/A 0.26 0.24 0.21 Construction/M2 150 200 180 140 480

  5. The Egyptian government is building on these advantages • Increasing deregulation and liberalization of economy • Privatization of key sectors such as banking and infrastructure • Faster and more cost effective transactions • Establishment and reform of dedicated institutions: Ministry of Investment, IDA, GAFI…. • A One-Stop-Shop enabling company incorporation within 7 days • A developed banking sector with better access to finance • The state divested 94% of its bank portfolio in the past 18 months • International players brought competitiveness and transparency • Easier distant transactions with a solid web banking infrastructure

  6. Setcore became a major player in the cotton trading business in 1995 • Exporting to more than 20 countries • Introduced innovations and streamlined cotton trading business • The second largest exporter of Egyptian cotton.

  7. In 2003, Setcore entered the yarn manufacturing business A state of the art spinning mill • The latest spinning technology with 60000 spindles, gassing and twisting plant • Focus on fine count yarn spinning and providing comprehensive customer service Three phase project • 30000 Spindles in 2003 • Capacity was doubled in January 2007 • Further expansion is planned

  8. Focus on customer service and quality Customer Service The highest quality standard Closer to the Customer Production efficiency Quality culture Supply chain management • Investment in latest technology • QHSE program with preventive maintenance • Cotton supply control • On going training & people motivation

  9. Structure of the presentation 1.Why Egypt? 2. Textile City in Borg El Arab 3. Government support and facilities

  10. Borg Al Arab Borg El Arab is ideal for a textile cluster • Great location • Near Alexandria, the centre of cotton trade • Quick access to the port and to the airport • Availability of infrastructure • M²1,2million of land is dedicated for the cluster • Availability of utilities: water, electricity, natural gas • Minor issue with the labour force • No local labour force in Borg El Arab • We need to offer housing to attract workers

  11. SETCORE 1 SETCORE 2 DELTA ALBINI The foundation of a successful cluster is in place Joint Italian, Swiss, & Egyptian dyeing) Italian Weaving Negotiations under way with world class Finishing Company Egyptian Spinning Pakistani Spinning SEIF GROUP FINISHING?? alba GROUP FILMAR SETCORE - 3 Italian Twisting & Mercerizing Swiss Weaving

  12. Mediterranean Textile project is progressing and will start production in August

  13. Elvy Weaving will start production in November

  14. Structure of the presentation 1. Why Egypt 2. Textile City in Borg El Arab 3. Government support and facilities

  15. A comprehensive joint collaboration strategy between Italy & Egypt Technological & Industrial Cooperation Investment Promotion Financial Instruments Vocational Training & Skills Development

  16. Egypt’s Ministry of Trade and Industry provides strong support to our project Coordination and fast tracking with different government agencies to make the process easy and quick GAFI • Easy access to the Free Zone activities licences • An expedited company incorporation procedure IDA • Quick land acquisition procedure • Attractive land cost and payment terms Borg El Arab City Council • Speed up building and activity licences • Speed up utilities connection

  17. Several partners from both sides are engaged in the strategy • Acquisition of 25% stock in a joint venture • Reduced interest rates • Finance feasibility study • Access to med fund • An agency of the Milan chamber of commerce • Promotion of Egyptian Italian Industrial parks • Competitiveness programs • Regional cluster development programs • Industrial training courses support

  18. Conclusion • Egypt has natural advantages for textile business • Government reforms are creating a favorable business environment • Setcore Spinning is an example of successful project in Borg El Arab • European textile industry is facing increasing competitive pressure • Textile City in Borg El Arab can provide competitive advantages to the industry as well as benefits to Egypt • With government support, Setcore and its partners are building the foundations for a successful cluster • A partnership between all players is crucial to continue build • Good opportunities and assistance are offered by the both the Egyptian and Italian authorities to make us succeed

  19. Thank you Q&A Session

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