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Egypt's Kabo says production, exports hit by strike

Eight-day strike by employees demanding better conditions has brought LE4 million in production losses for the clothing and textile manufacturer

Reuters, Thursday 25 Aug 2011
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Views: 1687

Egypt's El Nasr Clothing & Textile Co (Kabo) said on Thursday a labour strike since 17 August had lost the company production worth LE4 million (US$672,300) and disrupted exports worth LE3 million.

The firm said in a statement to the stock exchange that a minority of workers had threatened other employees with violence, preventing them from working, too.

Many Egyptian workers, emboldened by the uprising that toppled President Hosni Mubarak, have gone on strike demanding better wages and conditions. Most of the strikes have died down, but sporadic outbursts continue.

Kabo, one of the earliest public firms to be privatised, has been reorganising itself and listed on the stock exchange in 1997. It has trimmed its workforce and streamlined operations.

"Management was surprised by new demands raised by workers, particularly in that ... the administration had already responded to all the workers' demands," Chairman Amr el-Sharnoubi, appointed in September 2009, wrote in the statement.

Sharnoubi said the firm had already given workers a 15 per cent raise, more allowances, provided all temporary workers with permanent contracts and promoted about 1,500 employees. He said the changes cost the firm about LE9 million annually.

Kabo, which has retail outlets in Egypt under its flagship brand Jil, has also been unable to deliver products to the local market worth LE3.5 million because of the strikes, the statement added.

The firm's board has been in "constant convention" since 21 August, the statement added, saying the new demands would be shown to the firm's general assembly to take necessary decisions that "would protect the firm and its shareholders".

Kabo is 49 per cent owned by Amwal Al Arabia, the textiles arm of Arab Cotton Ginning Co and sister company Egypt Ginning. Kabo owns Wave, a local apparel retailer, and has a stake in Alexandria Spinning and Weaving .

Its shares were unchanged on Thursday. The stock has fallen 27 per cent this year, compared with a 35 per cent drop by Egypt's benchmark EGX30 index.

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