Egypt crisis - foreign factories closed

2013-08-15 20:40

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

London - Violence across Egypt that has left hundreds dead and turned its city streets into war zones forced multinationals to close on Thursday and raised fears two years of economic crisis would quickly get worse.

Egypt has been struggling with a damaged tourist industry, surging food prices and high unemployment since the overthrow of Hosni Mubarak in 2011, and is only just recovering from months of strikes by public and private sector workers.

On Thursday, Swedish home appliances maker Electrolux halted production at several factories on the outskirts of Cairo where it employs 7 000 people. It said it will review its decision on Saturday.

General Motors closed its assembly plant outside Cairo and shut its office there, and oil major Royal Dutch/Shell shut its offices for the next few days and restricted business travel. BP said oil production was not affected.

The stock exchange was shut and said it would open again next week while the central bank told all banks to stay closed. Shipping sources said the Suez Canal and its ports were operating normally.

Industry representatives from Turkey, an important economic force in the Middle East, said others were likely to follow the lead of foods group Yildiz Holding, which employs 910 people in Egypt.

"We decided to halt production in Egypt after the state of emergency announcement on Wednesday to protect our staff," Yildez chair Murat Ulker said.

Most large Egyptian companies said they were running as normal, although staff at several Orascom offices were working from home until Sunday. A spokesman at Ezz Steel said its head office in Cairo was closed until Sunday but all plants were running as usual.

4 500 factories shut

Egypt's economy was growing at about 7% a year for several years before the 2011 uprising, but even that was barely enough to produce work for the large number of youths entering the job market. It expanded by just 2% in the year after Mubarak was toppled and 2.3% over the 9 months to March.

More than 4 500 factories have shut, swelling by hundreds of thousands the ranks of unemployed in a nation where two-fifths of people live on or around the poverty line. The official unemployment rate is about 13% but private analysts believe the actual rate is much higher.

Tourism, a major source of foreign currency and provider of jobs for millions of Egyptians, took another blow on Thursday.

German travel group TUI Travel Deutschland and Thomas Cook Germany said customers with holidays booked for Egypt would be allowed to rebook to another destination, free of charge.

A TUI spokesperson said that while Red Sea resorts, including Sharm El Sheik, were unaffected by the unrest, customers had clearly been frightened away. Demand had dropped in the last four weeks and bookings were below the prior year, he said.

Both TUI Travel and Thomas Cook had already halted excursions to Cairo, Luxor and stopped offering Nile cruises since the unrest first broke out last month.

Read more on:    gm  |  egypt  |  north africa  |  egypt crisis

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.