Economic Boost: Egypt's Leather Industry on the Move

Zawya

28-01-2025

The leather industry has been a key player in Egypt's industrial landscape, contributing to economic development and export revenues.
Renowned for its rich heritage in craftsmanship and access to high-quality raw materials, Egypt's leather industry is experiencing a remarkable resurgence. This growth is fueled by rising demand and strategic government initiatives aimed at modernizing and expanding the sector.
Leather Industry on the Rise
Having high growth potential, it is evident that the Egyptian leather industry already contributes to the economy. In 2023, Egypt's exports of leather, shoes, and leather products surged by 25% year on year (YoY), reaching $113 million, according to the Industrial Modernization Center (IMC).
In this regard, Mohamed Fouly, Chairman of the Board of the Robbiki Leather City, tells Arab Finance: 'The 25 % increase was shown in leather for tanning exports, but it was more evident in leather products such as shoes, belts, and bags. This spike stems from higher investments and less importation.'
As per data by IMC, the leather industry in Egypt employed many across 160 leather tanning factories, 874 leather product factories, and 976 footwear factories in 2023.
Key Drivers of Leather Exports
The leather industry encompasses tanning companies, which process animal hides and skins, a byproduct of the food industry, into leather that is eventually used to manufacture finished products like footwear, garments, and other goods.
Egypt's livestock population reached 7.5 million heads in 2023, former Minister of Agriculture El Sayed El Quseir unveiled in June 2024. The abundant livestock significantly contributes to the flourishing leather industry.
Economist Ali Metwally attributes the sector's export boom to competitive pricing. 'Global demand for Egyptian leather products is rising due to competitive pricing enabled by the Egyptian pound's depreciation, making export more attractive,' he says.
'Projections indicate further growth in Egypt's luxury leather goods market by 3-5% between 2025 and 2029. By 2029, the market volume could reach approximately $250-300 million,' Metwally adds.
Additionally, Metwally expects Egyptian leather products to see robust international demand, particularly in the luxury and footwear segments.
Overcoming Industry Hurdles
Egypt's leather industry may face some challenges that hinder its progress. According to Metwally, 'the industry faces several challenges, including high import costs for raw materials and chemicals, outdated production techniques, and the global shift towards sustainable and ethical sourcing.'
'Tightening global regulations on the environmental impact of leather production requires significant upgrades to Egypt's processing capabilities. A lack of innovation in producing higher-value leather goods limits global competitiveness,' he explains.
'Exporters encounter barriers related to meeting international quality and certification requirements. Additionally, geopolitical and economic instability can impact investor confidence and disrupt exports,' Metwally highlights.
To face these challenges, Metwally suggests adopting modern production technologies, leveraging trade agreements to secure raw material supplies, and aligning with international environmental standards.
'Fostering local raw material production is also important. Government initiatives, such as subsidy reforms and private sector engagement, can further strengthen the industry's resilience,' he adds.
A Model for Industrial Development
Despite the challenges, the Egyptian leather industry has a promising future, driven by the government's establishment of the Robbiki Leather City.
This initiative aims to significantly boost finished leather production from 125 million to 350 million square feet annually, enhance products' value by completing all production stages, and create 25,000 new direct jobs upon project completion, as stated by the Egyptian Presidency website.
'Lately, Robbiki Leather City saw the opening of 100 new factories for shoes and leather. This brings tanning and leather products industries into the same zone,' Fouly says.
Moreover, Fouly emphasizes the importance of reactivating the technology leather center in Robbiki Leather City and employing more skilled workers in the field.
Meanwhile, Metwally agrees, noting, 'Al Robbiki Leather City is poised to significantly impact Egypt's leather industry by modernizing production processes and enhancing export capabilities. As a specialized industrial hub, it offers integrated facilities and advanced technology to bolster value-added production.'
'The successful operation of Robbiki could serve as a model for industrial development in other sectors. This underscores the importance of infrastructure upgrades, strategic investments, and active participation in global value chains for the future of Egypt's leather industry,' Metwally points out.
The industry is expected to see further growth in the upcoming years. 'As leather industry leaders, we believe we can double the production value and volume within a year for both the local market and exports,' Fouly indicates.
The Egyptian leather industry is on the brink of significant growth driven by a confluence of factors. A robust domestic market, coupled with a surge in international demand, particularly for luxury and footwear products, pushes the sector forward.
Government initiatives, like the Robbiki Leather City, are modernizing production and enhancing efficiency. They foster Egypt's competitive edge in the global leather market.
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