From Idle Factories to New Production

Increasing Egypt’s industrial output does not always require building new factories. Thousands of factories across the country that currently lie idle could be brought back into production if their potential were properly assessed and utilized. This represents a significant opportunity to put existing capital back to work in the economy, create jobs, reduce imports, and increase national revenues.

The EGP 1 billion fund discussed through cooperation between the Central Bank of Egypt and the Ministry of Industry represents an important step in this direction. However, the real challenge is not simply providing financing, but identifying why these factories have stopped operating and removing the obstacles preventing them from resuming production.

Whether the issue is a shortage of raw materials, high operating costs, outdated technology, financing difficulties, or loss of markets, each factory’s problems must be assessed individually. Solutions should be developed based on technical, financial, and commercial feasibility studies. Priority should be given to facilities that can economically resume operations, while the underlying problems that could cause them to shut down again must be addressed permanently.

One of the greatest advantages of this approach is time. Depending on the scale of the investment, establishing a new factory can take anywhere from at least eighteen months to five years. By contrast, a facility with usable infrastructure and machinery could resume production within one to three months, provided the necessary conditions are met.

This difference in timing is extremely important from an economic perspective. Earlier production means earlier revenues, new employment opportunities, more orders for suppliers, and additional tax revenues for the government. Competitive domestic production can reduce the need for imports while also increasing export capacity.

Egypt’s objective should not be limited to reopening idle factories. It should also prevent currently operating factories from becoming inactive for the same reasons. To achieve this, access to raw materials, energy and production costs, technology, financing, and market conditions must be addressed together.

Success should be measured not by the amount of funding allocated, but by the number of factories that resume production, the jobs created and sustained, the increase in value added, and the tangible benefits delivered to the national economy. By making effective use of its existing industrial capacity, Egypt can increase production and national revenues without having to wait for new investments to come online.