Too early to count cost of Egypt chaos: Fonterra

As an uprising sweeps Egypt, Fonterra is making little comment on what impact the political unrest may have on its business in the North African nation.

A spokesman said the co-op didn't give out revenue figures for individual markets, but according to Statistics New Zealand $224 million worth of animal products, including dairy produce, were exported to Egypt last year. Total exports were $239.6 million.

Fonterra global sales director Tim Deane said it was still too early to say whether the firm's butter trade in that country would be disrupted by the unrest.

"Our first priority was to establish that the four Egyptian nationals employed in our Cairo office were safe, and we're now checking in several times a day with them," Deane said.

He said Fonterra would be monitoring the situation over the coming weeks.

Egypt has been in a state of chaos since anti-Government protesters took to the streets last week to demonstrate against Egyptian President Hosni Mubarak's 30-year rule.

In 2009 Fonterra announced it had signed an agreement with Arab Dairy Products - one of Egypt's leading dairy firms - to manage the franchising, processing and distribution of Anchor products in that country.

The Egyptian company is also responsible for the co-packing of Fonterra's processed cheese portions sold in the Gulf Co-operation Council countries - which include Bahrain, Saudi Arabia and the United Arab Emirates - and Iraq.

As the demonstrations continue, a Fonterra spokesman said the company had not heard anything from its Egyptian partner about the status of its manufacturing facilities.

Middle East New Zealand Business Council chairman Michael Vukcevic said he knew of about 20 Kiwi companies doing business in Egypt.

"This sort of political upheaval and turmoil is going to slow up any potential business," said Vukcevic. "Those [firms] that have been negotiating business, free trade access or rights will be delayed."

He said New Zealand companies would also face delays in being paid for their goods and services as a result of the demonstrations.

Robyn Galloway, managing director of Christchurch wholesale travel firm Innovative Travel, which has specialised in Middle Eastern tours for 20 years through its Ancient Kingdoms Holidays brand, said the firm had only six clients in Egypt when the unrest broke out.

Those clients had now left the country, and Innovative Travel was offering customers booked to travel to Egypt the option of cancelling their trips, deferring their travel dates or choosing an alternative destination.

It was the low season for tours leaving New Zealand for Egypt, Galloway said, with the high season set to begin in May.

"We've viewed a number of different situations in the Middle East over the years and [the situations] can flare up quite quickly and just as quickly they can quieten down again," said Galloway.

"It's our hope that within a short time there will be some sort of outcome to the current situation."

NZ EXPORTS TO EGYPT

* Animal products: $224m
* Wool products: $10.2m
* Modified starches, glues and enzymes: $901,623
* Paper products: $412,723
* Sugars and confectionery: $398,145
* Pharmaceutical products: $309,974
* Other: $315,162
* Total: $239.6m

Source - Statistics New Zealand