After warning that its Cairo factory could be shut for as long as two weeks, Israeli apparel manufacturer Delta Galil Industries Ltd. reopened Sunday, bringing all its employees back to work and vowing to stay there.
“The demonstrations are limited to Tahrir Square,” said a Delta spokesman. “The rest of Cairo is back to work.”
The private label apparel company, which makes high-end undergarments for such brands as Victoria’s Secret, Target, Banana Republic and Tommy Hilfiger, closed its Cairo factory on Jan. 30, as the demonstration protesting against the Egyptian government began gaining momentum.
Delta’s Egyptian factory primarily produces apparel for the high-end market and is responsible for 11 percent of the company’s annual sales of about $500 million. Some 9 percent of that total comes from the factory itself and the rest from local Egyptian subcontractors. With 7,500 employees located worldwide at production plants in Israel, Jordan, Bulgaria and India, there are 2,835 Delta personnel in Egypt. The Tel Aviv-based Delta opened its operations in Jordan and Egypt in the mid-Nineties in order to strengthen its manufacturing capabilities and take advantage of its neighbors’ lower labor costs.
Upon closing last week, Delta said that it could not estimate the extent of the disruption, but felt that a two-week shutdown would not have any significant effect on its business. The company had added that it would seek alternative production sites away from Egypt if necessary.
Last week’s closure was necessary, the spokesman said, pointing out that the Egyptian government imposed a curfew from 8 a.m. until 3 p.m.
“We couldn’t get the employees to work,” he said.
Located in a north Cairo Qualifying Industrial Zone that allows Egyptian companies to export goods to the U.S. duty free if they have an Israeli component, Delta Galil transports its personnel back and forth to the factory on a daily basis. But the curfew impinged on transportation and “people were afraid to go out,” the spokesman said.
By Thursday, however, the factory began operating with a skeleton staff and was closed as usual on Friday for the Egyptian weekend. Saturday brought some 70 percent of the personnel back to work and by Sunday, “it was business as usual,” he added.
“The factory of Delta Galil will remain in Egypt,” the spokesman said. “For Egypt, it’s a big business because it provides employment and technology and exports. Those are three important elements that everyone wants to continue.”