Egypt: Multinational firms assess impact of unrest


Multinational companies with operations in Egypt told some workers to stay home, struggled with disrupted phone service and assessed the impact as unrest mounted.

Companies have been warning employees to be on guard or work from home since earlier in the week. Some had trouble reaching employees because phone service was disrupted.

So far, the business impact appeared limited. Major industries like petroleum and many manufacturing facilities are located well away from trouble spots in the capital and elsewhere.

Few multinational companies count on Egypt for a major portion of their revenue. Still, Egypt’s strategic position in the Middle East has drawn interest.

Tourism is a major industry, accounting for about 10% of the country’s jobs, according to the Commerce Department.

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Marriott International Inc. has heightened security at its seven Egypt locations, which remain open, says a company spokeswoman. The hotel chain has two locations in Cairo and 1,400 employees. To protect employees and guests, hotels have increased screening through metal detectors, increased the amount of security personnel on premises and are screening vehicles that enter hotel premises, says a spokeswoman.

The company is making exceptions for employees who are having trouble commuting to work due to protests, says a spokeswoman, but because of the nature of the work, is not advising employees to work from home. However, Marriott is allowing employees who get “stuck” at the hotel to stay on its premises.

A spokeswoman says it’s too soon to determine the affect the riots will have on business, but the hotel chain is waiving cancellation fees through next week, and will revisit extending the timeline if necessary.

Viator Inc., a San Francisco based company that provides tours throughout the world, has had an above-average number of cancellations since the riots, says Scott McNeely, vice president of product for Viator. “We’ll definitely take a big hit for the Middle East and Africa [areas],” he says. Cairo is within the company’s top 35 destinations, he says. The company is monitoring the situation in Egypt, where some airlines have started to cancel or delay flights.

Telecom providers saw business disruptions as service was shut down. At France Telecom SA, where Egypt is its biggest market in Africa in terms of revenue, a spokesman said the company would typically shorten work days to help employees observe curfews and encourage them not to travel.

But contacting its 1,600 staffers, who mainly work in call centers and research labs, was proving complicated due to network problems.

Vodafone Egypt, majority owned by Vodafone Group PLC, is Egypt’s biggest mobile operator, counting about 29 million customers for the company it jointly owns with the government’s Telecom Egypt. The unit contributed 691 million pounds in revenue for the six months ended Sept. 30, about 3% of the mobile giant’s total in the period.

Vodafone Egypt employs about 6,000 people, including part-time workers. One of Vodafone’s major call centers is also located in the country. “The safety of staff and the situation generally are at the forefront of people’s minds and getting services, when we can, up and running for customers,” a spokesman said Friday evening.

Alcatel-Lucent advised its 600 employees in Egypt to stay at home beginning Thursday and is discouraging travel, a company spokeswoman said.

Procter & Gamble Co. has also told its employees in Cairo to work from home until further notice. The consumer products giant has 1,500 employees in Egypt, including contractors.

Production at the company’s two plants which produce diaper, detergent, bar soap and feminine hygiene products outside of Cairo has not been interrupted, a spokeswoman said.

Oil companies operating in Egypt said they weren’t affected by the protests, largely because their oil and gas fields are far away from population centers like Cairo, in remote reaches of the Western Desert or off the coast of the Nile Delta.

BP said the unrest in Egypt had no impact on its operations and had no plans to evacuate expatriate staff, though it was advising local employees to take steps to ensure their personal safety.

The U.K. oil giant has been in Egypt for more than 40 years, and for much of that time was the single largest foreign investor in the country. To date, it has invested more than $17 billion in the country and pumped 150,000 barrels a day of oil equivalent in Egypt last year – about 4% of its total global production.

Egypt accounts for 20% of Apache’s production. The U.S. independent oil and gas company was monitoring the situation and hadn’t evacuated any staff, a spokesman said.