Korean businesses and investors in Egypt are facing inevitable damage to their operations due to increasingly violent protests there, with many of them forced to stay indoors or have their family members leave the country in a hurry, a local trade body said Monday.
Many companies, including Samsung, LG and Hyundai Motor, have decided to immediately bring home the families of their workers in the Arab nation mostly located in North Africa where anti-government protests have been sweeping the country since early last week.
The workers themselves may soon be pulled out if the situation gets any worse, according to the Korea Trade-Investment Promotion Agency, better known as KOTRA.
“Most Korean companies in Egypt have given up normal business operations due to the spread of protests, and many of them are withdrawing their workers back to Korea or to a third country,” it said in a press release.
Korean stocks ended 1.81 percent lower on Monday as foreigners dumped shares amid growing concerns over political protests in Cairo, analysts said. The local currency lost ground against the U.S. dollar.
The Korean Embassy in Egypt is telling Koreans to leave the country because of the ongoing protests.
An embassy official said by phone that embassy officials began calling Koreans in Egypt on Sunday to advise them to return home or move to another country.
The official said about 1,000 Koreans live in Egypt but didn’t know how many have already left. The official spoke on condition of anonymity, citing the sensitivity of the issue.
The Foreign Ministry in Seoul also has asked Koreans to not travel to Egypt.
At least two of three Korean businesses with more than 300 employees in Egypt, including LG Electronics, have been forced to shut down their factories as too many of their workers could not make it to work on time due to the protests that began Wednesday.
The protests are also threatening to jeopardize nine investments made by Korean investors, worth $156 million, according to KOTRA.
“Most of all, it may cause damage to our exports to Egypt this year. Egypt is the fourth-largest market for our products among Arab nations, but customs inspections have been halted as all government offices have been shut down, with communication with buyers also crippled due to a shutdown of most of communication channels,” it said.
Egypt cut off access to Twitter on Jan. 25, Facebook on Jan. 26 and the entire Internet on Jan. 28.
In 2010, Korea shipped some $2.24 billion worth of goods to Egypt while importing $938 million worth of products from the North African nation.
But the protests will likely have a limited impact on Korean financial companies in light of their minimal exposure to the North African country, the financial regulator said.
As of the end of September, domestic financial companies owned no securities of or loans to Egypt and their borrowing from the country reached only $6 million, the Financial Supervisory Service said in a statement.
“Due to minimal exposure to and borrowing from Egypt, the country’s political unrest will have only limited impact over the health of local financial companies,” the FSS noted.
“In order to shield against any possible spread of the political unrest into other Islamic oil-producing countries, we will step up monitoring of local markets to prevent volatility,” the regulator said.
(From news reports)