Corporations cease operations in Egypt

Companies, concerned for worker safety, halt Egyptian operations as street violence continues

A number of international companies have suspended operations in Egypt as three days of violent street battles make the streets of Cairo unsafe.

Reading Eagle,

16 August, 2013

General Motors Co., Electrolux AB, Royal Dutch Shell PLC, Heineken N.V., Toyota Motor Corp., Suzuki Motor Corp., BASF SE and others shut down facilities and told thousands of workers to stay at home during unrest that has left more 700 people dead as of late Friday.

"This was a precautionary safety measure to ensure employees would not be exposed to risks traveling to and from work," Daniel Frykholm, a spokesman for Swedish appliance maker Electrolux, said in an email. The company, which has about 6,700 workers in Egypt, asked employees to stay home Wednesday afternoon and Thursday. Friday and Saturday are the Egyptian weekend, and the company will decide Saturday evening if it's safe enough to resume normal operations, Frykholm said.

Royal Dutch Shell closed its offices Thursday. They will remain shuttered Friday and Saturday. The company also restricted employee travel as the violence continued and said it was monitoring the situation. It was unclear whether Shell's main production facility, a joint venture with Badr El-Din Petroleum Co., had been closed.

General Motors' Egyptian operations will remain shut indefinitely, including a plant in the Cairo suburb of 6th October City where it makes cars, light trucks and minibuses. The auto giant has about 1,400 workers in Egypt, where in 1983 it became the first private automaker to establish operations in the country.

At least 700 people have been killed in violence that continues to rage after riot police razed two Cairo encampments where supporters of President Mohammed Morsi were protesting his ouster.

Morsi was deposed by the military on July 3 after months of protests against his rule.

On Friday, at least 64 people, including eight police officers, died in fighting nationwide. Tens of thousands of Muslim Brotherhood supporters clashed with civilians, police and troops in the fiercest street battles to engulf the capital since the country's Arab Spring uprising.

In Cairo, German retail giant Metro closed its headquarters, and its only two grocery stores in the capital were shuttered on Friday, a spokesman for the Duesseldorf company confirmed.

Amsterdam-based beer-maker Heineken N.V. scaled back its six Egyptian breweries to minimum staff on Wednesday afternoon and raised security. It also sent office workers home near Cairo. The company, which has about 2,200 workers in Egypt, reported no incidents at any of its operations.

"Based on today's security assessment our operations in Egypt will remain mostly closed (Saturday), with the exception of the distribution centers in the tourist areas at the Red Sea," spokesman John-Paul Schuirink said in an email.

The chemical company BASF temporarily closed its manufacturing facilities and offices. BASF has been operating in Egypt for about 60 years and produces chemicals used in construction at a plant in the Cairo suburb of Sadat City.

IHS Automotive analyst Paul Newton in London said that Toyota and Suzuki also halted Egyptian production. Because of the unstable political situation, the forecasting company predicted that light-vehicle production in Egypt would fall almost 8 percent this year, with sales dropping nearly 4 percent.

Egypt is one of the largest vehicle manufacturing centers in Africa, Newton said.