Egypt hopes its burgeoning foreign outsourcing industry will generate $2 billion in revenue by 2013 and $10 billion in 10 years, aided by targeted incentives for incoming firms, the communications minister said on Tuesday.
It expects the industry to earn the country $1.1 billion this year, Tarek Kamel said, after meeting employees at a new 1,000-seat call centre on Tuesday.
“We are working, in ITIDA (Information Technology Industry Development Agency) and the ministry, on an incentive package. We are expanding in technology parks for the offshoring industry,” Kamel said at the centre’s official opening.
Eight hundred of those seats are filled, providing technical and sales support to six clients of Stream Global Services (SGS.A), including satellite radio station Syrius-XM.
Stream’s chairman and chief executive, Scott Murray, told Reuters the firm intends to expand further in Egypt and Brazil and to enter China, where it will employ 2,000 people.
“We are starting to look at new sites tomorrow,” Murray said. “This centre here is pretty much sold out, so we will need another centre sometime this summer and probably another one by late in the year or early in 2011.”
Boston-based Stream has 30,000 employees in 22 countries. It started in Egypt last year with 50 employees in temporary faciities and expects up to 5,000 employees in Cairo and other Egyptian cities in the next two to three years.
INCENTIVES
Egypt’s outsourcing industry pales in comparison with that of India and the Philippines, but is one of the country’s fastest growing sectors, aided by a pool of university graduates fluent in French, German, Spanish and Italian as well as Arabic and English.
The incentives offered increase significantly once a company commits to employing more than 3,000 Egyptian employees. They now target firms providing back office financial and accounting services, ITIDA board member Amin Khaireldin told Reuters.
“We do the incentives to share risk with those who are coming,” he said. “As we speak now we are encouraging people to come for financial and accounting because we graduate every year 60,000 accountants from our universities.”
Khaireldin said ITIDA subsidies cover up to 90 percent of vocational training costs. ITIDA also matches the difference between Egypt’s telecommunications costs and the lowest such costs elsewhere in the world and even helps pay rent and transportation costs.
Stream’s largest client in Egypt is satellite radio station Syrius-XM, which chose Egypt to diversify away from its significant presence in the Philippines and elsewhere.
“From a performance standpoint it is very comparable,” said Joe McGuinnis, senior director of call centre operations at Syrius-XM, adding that costs were comparable.
“We chose Cairo … as an alternative to the Philippines, the same offshore value but in a different location,” he said.
Source:http://www.reuters.com/article/idUSLDE62L2AU20100323
