Egypt’s industrial sector is witnessing a surge in investment demand — and Turkish investors are leading the charge. Amid a raft of new government incentives and appealing exchange rates post floats, Turkish investors have been eyeing Egyptian industry with increased enthusiasm, with plans to inject USD 5 bn into Egypt over the next two years, government sources tell EnterpriseAM. The rapid flow of Turkish capital is transforming the sector, offering not just financial investments but also technology transfer and access to European markets — key advantages Egypt aims to leverage.

Ambitious trade targets: Turkey’s ambassador to Egypt, Salih Mutlu Şen noted in late January that he expected bilateral trade to reach USD 10 bn this year if current economic conditions hold, with plans to increase that to USD 15 bn within five years and at least USD 20 bn within a decade.

The textile sector is spearheading the way: Şen also noted that Turkish businesses in Egypt currently employ 100k people, with 80% of investments concentrated in textiles, a sector known for being labor intensive. Investment demand in the sector is skyrocketing, especially from Turkish and Chinese investors, head of Egypt’s Apparel Export Council Marie Bishara told EnterpriseAM.

Where the industry stands: Egypt currently has 4.2k registered textile factories under the Federation of Egyptian Industries (FEI), though many have faced raw material shortages and FX challenges. The industry also competes with Syrian businesses in designated industrial zones, according to sector sources. The US market accounts for 60% of Egypt’s ready-made garment exports, followed by Europe at 35%, while Africa is the next target market, according to Bishara.

Turkish investments in Egypt: Turkish investors’ operations in Egypt are varied, with many initiating production through contract manufacturing while waiting for permits to establish their own factories, Bishara noted. This outsourcing model has created momentum within the textile industry, pushing local manufacturers to operate at full capacity to meet growing demand. Turkish factories also supply yarn to Egyptian manufacturers under agreements with multiple industrial zones — including Tenth of Ramadan, Port Said, and the Suez Canal Economic Zone (SCZone) — while Turkish manufacturers also produce in Egypt for German retailers via Turkish-German partnerships.

Exports remain the primary focus: The shift from production for the local market to an export-driven strategy has boosted quality standards and led to a 60% increase in exports from USD 1.8 bn in 2021 to USD 3 bn in 2024, Bishara told us. With fresh Turkish investments, the sector expects to grow by another 20-30% this year.

What drives Turkish investment? Inflation in Turkey is the key push-factor driving Turkish investors to relocate to Egypt. “We are receiving a flood of inquiries, and several Turkish companies have already launched operations here,” Egyptian-Turkish Business Council member Matta Bishay told EnterpriseAM, adding that the Egyptian authorities are actively welcoming Turkish investments and ensuring a smooth transition.

And it’s not just the textile sector that’s reaping the rewards, with Bishay noting the recent agreement inked by Turkish company Klepsam to establish Egypt’s largest sanitary ware factory with USD 7-10 mn in investments in the facility’s first phase.

Egyptian incentives for manufacturers are a key pull-factor: Turkish investors view Egypt as a prime investment destination thanks to its massive domestic market, ongoing urban development, and limited competition in certain sectors. Moreover, the Egyptian government is offering lucrative incentives, including discounted land prices, support for infrastructure, and strategic industrial locations. However, Bishay stressed that further regulatory changes are needed before some investment commitments will be able to be finalized. Discussions will focus on tariff adjustments and potential bulk procurement contracts with government housing projects, ensuring that locally manufactured products receive priority over imports.

Turkey’s investment ambitions are not limited to Egypt, though: Turkish companies have a strong presence in Libya, according to FEI member Mohamed El Bahy. He acknowledged that Turkey’s industrial expansion benefits regional economies by bringing technology and expertise, but cautioned that Turkish firms could become direct competitors to Egyptian manufacturers eyeing Libyan industrial projects — particularly given Egypt’s plans to establish two industrial zones in Libya for the engineering, electrical, and steel industries with an initial investment of USD 250 mn.

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