egypt - AP - January 31, 2011
Looted stores in Cairo yesterday. Photo by AP
Text size

Israeli factories in Egypt were closed yesterday, along with most of the country's factories, as blocked roads prevented employees from getting to work.

Delta Galil Industries, which employs 2,700 people at its Egyptian factory, said it did not know when it would be able to reopen. The factory is responsible for 11% of the company's sales, and Delta's share price plunged 9.7% yesterday. Damage to the company's bottom line is likely minimal, however, as long as the factory is closed for no more than two weeks.

Israeli clothing companies Bagir and Tiv Textile also halted production in Egypt yesterday.

Egypt is a rather minor export market for Israel: In 2010, Israel exported less than $150 million to its southern neighbor. Companies with the most significant ties are in the textile and chemical industries.

At many of Egypt's textile factories, workers arrive via company buses, but the road closures meant they were stuck at home. The only people who showed up at some of the factories yesterday were the owners.

"Everyone is speculating about the country's future," said Oded Beit Halachmi, 75, who has had a textile company in Egypt for the last 15 years. The general public isn't concerned about political change, but by the lack of personal security due to lawlessness, he said.

"The banks and the stock exchange are closed, and there's no Internet service, so you can't communicate with the banks," Halachmi said.

Most of Cairo's big businesses have been shut down due to concerns that they will be ransacked, he added. The only businesses still open are the small ones, where long lines of people now wait to purchase food before the places close at 2 P.M., so they can get home before the 4 P.M. curfew goes into effect. Generally, these businesses would be open until as late as 2 A.M., Halachmi explained.

"Due to the looting, owners are sleeping at their businesses," he said.

No one knows when the banks will reopen; they're closed out of concern that they could be robbed, he said. The banks most likely to open first are those that serve businesses, he added.

EMG's main shareholder flees

One of Israel's most important imports from Egypt is gas. Several Israeli companies recently signed supply agreements with Egyptian gas company EMG, which also supplies the Israel Electric Corporation with nearly half of its gas. That gas is used to produce about 20% of Israel's electricity.

EMG is partially owned by Israeli businessman Yossi Maiman. The company's main shareholder is Hussein Salem, an Egyptian businessman and close confidante of President Hosni Mubarak. Salem holds 28% of EMG.

Yesterday, Salem fled for Dubai, along with other wealthy Egyptians, news agencies reported. His departure deepened concerns in Israel that the gas would be cut off, although as of yesterday it continued to flow as usual.

The share price of Maiman's company Ampal - which owns 12.5% of EMG - plunged 17.1% after falling 10% on Wall Street on Friday.