Case study: A rewarding journey towards resource efficiency in Egyptian textiles
The ‘four Cs’ – COVID, climate, conflict and cost-of-living – greatly tested small businesses around the world and set back the Sustainable Development Goals. This case study, from the ITC Annual Report 2022, highlights how the International Trade Centre helped entrepreneurs find new ways to prosperity through trade.
Esperanza is an Egyptian manufacturer and exporter of knitted garments, running vertically integrated fabric and ready-made garment production. The company must use resources more efficiently, especially amid rising costs associated with high energy demand inherent to the sector and the need to transition to low-carbon, more sustainable production processes. Beyond energy, Esperanza’s operations consume vast quantities of water and use chemicals whose application and disposal must be well managed to avoid health and environmental hazards.
ITC’s GTEX/MENATEX programme has designed training and coaching for companies on Resource Efficiency and Circular Production (RECP). The programme helps beneficiaries transition into greener production, thereby increasing international competitiveness and complying with evolving regulatory requirements on due diligence and evolving buyer requirements.
In Egypt, the project offered training and coaching sessions tailored to Esperanza’s needs, focused not only on RECP techniques, but also on lean manufacturing to improve production processes and drive down costs. Esperanza’s management boarded this journey. The company completed RECP coaching and implemented a strategy based on a cost–benefit analysis of circular concepts ‘reduce, reuse, recycle’.
While small firms in developing countries often have fewer resources and capacities to restructure production and align with green practices and requirements, they can show great flexibility in adopting new technologies and business models. This was the experience of Esperanza, which achieved considerable resource and cost savings on energy, water and waste.
Electrical energy: Good housekeeping measures generated an annual cost saving of $3,800, with savings of 49 megawatt hours/year of energy and 25 tons/year in carbon dioxide (CO2) emissions. By shifting to natural gas vehicles, the company saved up to $3,100 and about 10.6 tons/year of CO2 emissions.
Thermal energy: With the preventive maintenance of its boiler, Esperanza saved an annual $3,200. In addition, by closely controlling the steam flow through its pipeline system, the company is expected to save costs amounting to $16,000 a year, with savings of 862 megawatt hours/year of energy and 160 tons/year in CO2 emissions.
Water: By implementing wastewater treatment measures, the company now re-uses almost 60% of its washing water in the dye house. Esperanza is expected to save $11,000 of costs with a 16,000 cubic metre reduction in water consumption per year.
Waste: Investment in special machinery to produce drawcords from knitting production waste has tripled the value of yarn waste previously sold in raw form.
The introduction of lean manufacturing enabled Esperanza to identify unused inventory and capital, saving nearly $119,000, optimize space utilization, shorten lead times and lower production costs.
Fortified by this success, Esperanza is confident it will be able to expand into demanding green markets and secure relationships of trust with buyers. ITC will continue to support companies in their transition to resource efficiency and low-carbon production, preparing them to comply with existing and emerging industry standards and legislation in export markets.
More than 66 companies in the Middle East and Africa have benefited from RECP since 2019. Good progress has been made – including environmental improvements of 49 firms leading to yearly cost and energy savings exceeding $2 million and 1 million kilowatt hours, respectively. Sustainability, however, remains a continuous journey.