Foreign companies including Turkish Yıldız Holding halt production in Egypt
ISTANBUL - Reuters
A poster of deposed Egyptian President Mursi lies amid the debris of a cleared protest camp outside the burnt Rabaa Adawiya mosque in Cairo, Aug. 15. REUTERSMany Turkish and global companies have been concerned about their investments in Egypt amid the escalating violence in the country. In the highly risky environment that will most probably diminish domestic demand in Egypt, some companies have already announced that they would halt their production in the country due to the state of emergency, including Turkish Yıldız Holding, European oil giant Shell and Swedish home appliances maker Electrolux.
We have decided to suspend our production activities in Egypt both to comply with the curfew order and to protect our employees,” Yıldız Holding’s chairman, Murat Ülker, tweeted Aug. 15.
The company normally has an annual production capacity of 30,000 tons of biscuits in Egypt for the neighboring regions.
Yıldız Holding may be followed by many Turkish textile companies, which made around 80 percent of Turkey’s more than $2 billion investments in Egypt according to the official numbers.
“Textile companies that produce in Egypt for export purposes may suspend their operations for two or three months unless they take an order abroad. The companies that focus on Egypt’s domestic market may suffer from diminishing demand,” the head of the Ready-Made Garment and Apparel Exporters’ Association of Istanbul, Hikmet Tanrıverdi, said Aug. 15.
Companies continue to their production activities, the head of the Turkey-Egypt Business Council of the Foreign Economic Relations Board, Zuhal Mansfield, said. “Some investors may decide to suspend their operations in Egypt; this is their own choice.” She added that Turkish companies had made their investments in a region far away from the violent areas.
“The companies may, however, face some cancellations of orders due to some buyers’ concerns about any delays in the product deliveries,” she said.
Egypt has been highly favored by both Turkish companies and others to establish production facilities thanks to its low production costs and its ability to sell customs-free goods to many countries.