Hela says the expansion will enable it to provide “an attractive nearshore manufacturing offering”, strengthening its focus on providing apparel brands with innovative and sustainable supply chain solutions.
The group provides manufacturing solutions to apparel brands including Tommy Hilfiger, Calvin Klein, Michael Kors, and VF Corp, through its 12 manufacturing facilities located in Sri Lanka, Kenya, Ethiopia, and Egypt.
Its new 275,000 sq ft manufacturing facility is situated in the Alexandria Governorate, an area Hela says has a well-established skill base in apparel manufacturing that also hosts one of Egypt’s largest ports. The facility is equipped to accommodate up to 2,500 workers during a single shift, with the potential for significant further expansion.
“We’ve had an extremely positive response from both our existing and a range of new customers on our expansion into Egypt. It offers an immediate solution to the growing demand for speed in apparel sourcing,” says Sanath Amaratunga, CEO of Hela Kidswear. “The well-established skill base and integrated supply chain in Egypt allow us to offer a range of product types at competitive rates.
“In addition, Government authorities are very supportive and provide a range of incentives when establishing export-orientated manufacturing in Egypt.”
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Egypt offers a range of advantages for apparel manufacturing – most notably its geographic proximity to major markets, with shipping times as little as three days to Europe and 12 days to North America. This addresses the increasing demand for speed and nearshoring solutions from global apparel brands, which has become more pressing as a result of the logistics disruptions caused by the pandemic, Hela explains.
Egypt also has a well-established textile supply chain, which drastically reduces the need to ship raw materials from Asia, bringing down lead times further, as well the overall environmental impact of production, which is another key benefit for apparel brands. In addition, Hela’s foray into Egypt will allow indefinite duty-free access to both the EU and UK market, through Egypt’s bilateral free trade agreements – as well as to the US via the Qualifying Industrial Zone initiative.
“Given the strong interest we are seeing from customers, we expect a significant positive contribution to both top and bottom-line growth from Egypt over the coming months, with the medium-term goal of reaching US$100m in exports from the country,” Amaratunga adds.