Chinese-made shoes have ousted their Egyptian competitors, writes Mai Samih
"The heyday of Egyptian-made leather products is over," lamented Essam Hassan, a former shoe workshop owner. Hassan was forced to close down his business because he just couldn't compete with Chinese imports. "They are cheaper, and come in a variety of designs," he added.
According to Ministry of Industry and Foreign Trade statistics, Chinese shoe exports to Egypt stood at a value of LE665 million, compared to LE28 million worth of Egyptian shoes going to China.
But experts warn that these imports are as bad quality as they are cheap. Khaled Salah owns a super-size shoe factory in Ataba, downtown Cairo. He remembers the days when Egypt produced high-quality leather shoes. Producers have stopped using genuine leather, because it puts a high price tag on products.
In addition, Salah said, there have been shortages in leather availability. "Genuine leather is being exported, and this forces us to use artificial leather," he said. "This means we have to make lower-quality products." But even the use of artificial leather does not bring in real profit, because imports are flooding the market at cheaper prices.
Head of the Chamber of Leather Industry Mohamed El-Shami believes that some of the troubles shoemakers are facing may in fact be coming to an end. "The 2011 decision banning the exportation of unmanufactured leather means more of it will be available to local manufacturers," he said. "Prices will drop."
In 2008, following the global financial crisis, prices of genuine leather increased by 60 per cent from LE300 to LE120 per foot.
El-Shami acknowledged that there are problems that need to be addressed. The main issue is the fact that no compensation is given to local manufacturers, while imported products flood the market in what El-Shami calls "illegal competition". The result is that little national income is made, while multiple factories such as those in Bab Al-Sheria, a district famous for shoe manufacturing, are closing down.
For his part, Hassan says there have been serious communication problems with officials. These problems have delayed the resolution of shoemakers' concerns. "Whenever we complain to the Chamber of Leather Industry, the answer is always that Egypt is signatory to international trade agreements that it must abide by," he said. "But what is more important? Egyptian or foreign workers' welfare?"
El-Shami explained these agreements allow Egypt to impose temporary protective measures, should the country require them. "The World Trade Organisation allows temporary measures in such circumstances," he said. He also proposed a number of different solutions to the problem. "We could activate Section 161 of the law of illegal practices, or make a dumping case, or raise custom tariffs, or resort to a reference price for imported products," he said.
A shop owner who asked not to be named said he believes reforms to the industry are needed in order to enable it to survive. Officials, he said, "should start reforming tanneries. Taxes are being charged at every production phase. These should only be imposed at the purchasing phase, as that will make products cheaper."
To Salah, the solution to the industry's problems was quite simple. We should "organise leather exports to make sure local factories have their raw material needs covered, while putting an end to cheap Chinese shoe imports, so local products can survive."
Hassan believed "we need conditions to improve, but this will only happen if our government supports the industry." He went on to cite the example of Italy, and how it managed to establish some of the world's best factories. "Egypt also has this potential," he said.