Egypt's Minister of Industry, Khaled Hashem, has announced the launch of a new system called "Factory Support Unit" to help struggling factories. The unit will study the conditions of factories that have stopped or face difficulties in operation and work to revive them through three different paths. These paths include providing technical support and restructuring, offering financing through a dedicated fund, and connecting struggling factories with investors looking to expand or start industrial activities.
The issue of struggling factories has been a longstanding problem in Egypt, with estimates suggesting that between 15,000 to 25,000 factories are facing difficulties. However, Minister Hashem stated that the ministry is no longer focused on determining an exact number of struggling factories. Instead, the ministry aims to find practical solutions to ensure that factories can resume production, provide job opportunities, and export their products.
The Factory Support Unit will allow struggling factories to submit their data, enabling the ministry to create a comprehensive file on the factory's condition and reasons for struggling. This will help determine the most suitable path for addressing the factory's issues. The unit's first path targets factories facing minor problems that can be resolved through restructuring or providing necessary technical and operational needs, such as trained labor.
The second path involves a fund established in collaboration with the Ministry of Industry, the Industrial Development Authority, and the Central Bank. The fund, managed by CI Capital, has a value of one billion Egyptian pounds and is renewable. Its primary goal is to study the conditions of struggling factories and intervene through participation in shares or restructuring processes to help them regain their operational capacity.
According to Minister Hashem, over 100 factories have submitted applications to benefit from the new system within the first month of its launch. These applications represent factories that have declared facing difficulties but do not necessarily mean that all will be classified as struggling factories. The ministry will study each case individually, determine the nature of the problem, and prioritize cases that can be revived quickly.
The ministry's primary criterion is not merely classifying a factory as struggling but rather assessing the possibility of helping it resume production. Minister Hashem emphasized that the ministry's goal is to revive factories regardless of their previous classification or status, with a focus on transforming them into productive units that provide job opportunities and preferably export their products.
The Factory Support Unit has just begun its operations, and the ministry is working to promote the system and encourage factories and investors to utilize its services. With the launch of this new system, the Egyptian government aims to support the growth and development of the industrial sector, create new job opportunities, and increase the country's production capacity.
Key points
- The Egyptian Ministry of Industry has launched a new system to support struggling factories, providing technical support, restructuring, and financing options to help them resume production.
