Ghazl El-Mahalla textile workers’ strike is not the first

CAIRO – 22 August 2017: Workers at the Cotton and Textile Industries Holding Company’s textile factories in El-Mahalla city suspended their 15 day strike on Sunday evening. All workers returned to the various departments in the company, including the weaving, wool, cotton, medical and engineering and the electricity department. The strike was suspended following promises by the company to examine and gradually respond to the workers’ demands, in accordance with the law.

Over the past two weeks, the management of the company, the general Union of Spinning and Weaving, the General Commissioner of the company, and former veterans of various unions met with the workers and urged them to suspend the strike and resume their work in the factories.

The Minister of the Public Business Sector, Ashraf El-Sharkawy, said on Monday that he would take strict measures against all companies that violate workers 'rights and hide information about their employees’ situation. He confirmed that they will be applying the minimum wage and paying bonuses to the workers according to the law.

Furthermore, Parliament member, Mahmoud Shehata, said in a televised interview on Saturday that parliamentarians from El-Mahalla city discussed with the head of the company about providing a 10 percent increase to the workers, once the workers suspend the strike and return to their work. He added also that they discussed gradual promotions, increase in food allowances and paying the workers one month and half pay before Eid al-Adha (Sacrifice Feast).

From their side, members of the manpower committee in the Parliament said that the next parliament session will discuss and adopt a law obliging the private sector to pay their employees all eligible allowances. They called also on the Egyptian Workers Union and the Prime Minister to intervene to resolve El-Mahalla’s crisis.

The textile workers’ strike led to huge losses for the Egyptian national company that reached almost $27 million, according to parliament members. The parliamentarians added also that this strike has negatively affected the economy. The striking workers replied to the parliamentarians’ accuses by saying that this loss is a result of poor management and that responding to their demands would have cost the company less than this amount.

What are El-Mahlla textile workers’ demands? How did the strike start?

El-Mahalla textile workers demands include a 10 percent social allowance, an exceptional bonus for all workers, an increase on food allowance by LE 200-400 following the steps of other public sector companies such as the mills, oil and soap companies. They called also on the Supreme Committee for Promotions, which had not convene for two years, to meet and discuss their situation, and they requested dismissing some officials in the company that they accused of corruption.

El-Mahla’s contribution to the Egyptian economy:

El-Mahalla is one of the largest industrial and agricultural cities in Egypt, located in the middle of the Nile Delta. It is famous for its textile industry as it hosts the largest public sector Egyptian textile and cotton company, “the Misr Spinning and Weaving Company”.
The Misr Spinning and Weaving Company has been an Egyptian industrial symbol since the early 20th century. In 2015, the company used to sell 70 percent of its production on the domestic market with the remainder being exported primarily to Europe, according to Al-Ahram news.

The textile industry is one of the largest employers in Egypt, providing a quarter of all industrial jobs estimated at one million. It accounts for 27 percent of the country’s non-oil exports.
The state-owned “Misr Spinning and Weaving Company” was the first to be nationalized by President, Gamal Abdel-Nasser, in 1960. It began to diversify its cotton sources and products in 1975 after it established a garment unit to complement its cloth factory.
The company no longer depends on the locally produced long- Egyptian cotton because it is too fine and too expensive to use in denim garments and T-shirts, the main items manufactured for Western markets. The cloth for exported garments is mainly imported from Southeast Asia.

Experts say that Egypt’s cotton exports could be increased from $500 million to $2 billion if cotton was exported after spinning and could reach $8 billion if it was sold in the international markets as a finished fabric.

Textile sector suffers from various problems:

The textiles sector in Egypt faces some obstacles despite positive factors such as proximity to European markets, international trade agreements and comparatively low labor and utilities costs.

Misr Spinning and Weaving Company lost LE 568 million during the last fiscal year and LE 2.3 billion in the last three years.

There are around 7,200 textiles-related companies operating in Egypt today, according to the General Authority for Investment. Among the 7,200 companies, about 6,000 textiles factories are in danger of shutting down.

Textiles manufacturers complain that the financial support provided by the government to exporters has been cut from five percent to 2.5 per cent of the value of exports since the beginning of the 2015 fiscal year. Those cuts make it difficult for exports to compete with lower-priced products in international markets.

Manufacturing growth in Egypt fell to two percent in the first nine months of 2015, compared to nine percent in the same period of 2014, according to figures from the Federation of Egyptian Industries.

The shortage of fuel is another problem that affected the industrial sector in 2015. As the country witnessed shortages of the gas used to operate its power stations. As a result, the government has given priority to providing domestic electricity while reducing the power available to factories. In an attempt to solve the problem, the government has given permission for energy-intensive industries to run on coal.

This is not the first strike in El-Mahalla:

Textile workers in El-Mahalla played an active role in political developments and in the Egyptian labor struggles since December 2006.

2006: More than 15,000 textile workers went on strike for three days to protest market reforms and demanded better living conditions. The government responded to the workers’ requests, they received two months pay bonus for every year they worked with the company.

2007: Around 3,000 textile workers at the el-Ghazl factory went on strike to demand the payment of benefits.

April 6, 2008: El-Mahalla witnessed mass demonstrations protesting the election results of former President Hosni Mubarak, claiming election fraud and demanding better wages and applying the minimum wage to all workers which later contributed to the collapse of the former President Hosni Mubark regime in 2011.

Furthermore, the workers demonstrated against alleged plans to sell off the Ghazl El-Mahalla Company to private investors.

2012: Workers went on strike demanding increased profit sharing, better retirement benefits and a replacement of the management. The Misr workers were joined by workers from seven other textile factories, and strikes also broke out among doctors and health workers, university workers, and ceramics workers in other parts of Egypt.

At the end of the same year, workers and students declared themselves independent from the Muslim Brotherhood regime; they cut all rail lines, blocked entrances to the city, and stormed the city council and announced their intentions to replace it with a revolutionary council.

2014: The Company’s administration refused to pay the workers their profits. The workers protested and submitted many complaints to the Ministers’ Council and Labor Offices to solve. The Prime Minister at that time, Ibrahim Mahalab, visited the company's headquarters and promised workers to receive their last part of the profits in January 2015, but the administration did not abide by the agreement.

2015: Around 20,000 textile workers in El-Mahalla began a strike that lasted for 12 days after the company refused to pay the 10 percent pay increase announced by President Abdel Fattah al-Sisi in July 2015. The government considered El-Mahalla workers ineligible for the raise because they already receive an annual seven percent cost of living increase. The workers said that the 7 percent increase doesn’t reflect the real annual inflation rate.

2016: Textile workers strikers to demand the dismissal of the company’s chairman of the Board of Directors and to investigate corruption in the company.

Following this strike, other textile company workers started a strike for the same reason; these strikes lead to LE 30 million in lost revenues. The government then paid the striking workers their dues and gave all workers an annual raise. This came after Prime Minister Sherif Ismail, met with representatives of different trade unions who advised him to give in to the workers’ demands, to contain the strike, and prevent it from spreading to other sectors.

2017: Almost 3,000 textile workers in El-Mahalla, mostly women, announced a strike to demand payment of variety of benefits.