Egypt ups its outsourcing offering

5 March 2010

5 March 2010 | Carly Chynoweth

The Egyptian government is offering incentives to entice multinational companies to establish outsourcing facilities in the North African country.

Inducements designed to encourage external investment include the creation of a number of industrial zones offering everything from tax exemptions to free land, as well as changes to university education to ensure call centres are staffed with trained people.

The programme, run by the IT Industry Development Agency (Itida), has proved so successful that consultancy AT Kearney now ranks Egypt as the top outsourcing destination in EMEA and sixth in the world.

Companies such as Vodafone, software testing firm SQS and outsourcer Stream Global Services already run call centres in some of Egypt’s new business parks.

However, the country does not see itself competing with outsourcing world leader India, said Amin Khaireldin, a former IBM executive who now heads up strategy at Itida.

 “Obviously that is ridiculous – look at our size and their size,” he told SM. “Our value proposition is very clear: global companies need several offerings, not just one. Multinationals have complex requirements. We can’t do all of it and India can’t do all of it, so we complement each other.”

Egypt is about 15 per cent more expensive than India on IT outsourcing, but is roughly on a par when comparing large business process outsourcing call centres.

Khaireldin also cited Egypt’s large, multilingual talent pool – its universities produce about 330,000 graduates per year – and geographical convenience as advantages.

Ricardo Langwieder-Görner, the director of business development, EMEA, at Stream Global Services, already has 400 employees in Cairo and expects to have “several thousand” within the next two or three years.

He praised the work done by Itida to date, but added that he hoped it retained its quality while keeping costs down in the longer term. “That’s a big mistake you see elsewhere,” he said. “It’s being cost-competitive while maintaining that high standard of talent quality that counts.”

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