Procter & Gamble Egypt

Against the backdrop of a very public revolution in Egypt, Procter & Gamble is quietly continuing to pursue its ongoing commitment to investment and growth, as Alan Swaby discovers.

Even if ‘Business management during periods of revolution’actually existed as a module in MBA programmes, it’s unlikely that many would ever have to put it into practice. Yet this is the very real situation that managers at Procter & Gamble (P&G) have had to face during the Egyptian chapter of the ongoing Arab Spring.

In the end, fighting on the street had little or no direct impact on the running of the business but in times of volatility, who knows what could happen?

“We have two locations in Cairo,” explains external relations director Yassin Attas. “Our head office is in downtown Cairo but the factory itself is out of town, on a purpose-built industrial park. As soon as unrest occurred on the streets, we closed the office and asked staff to work from home. At the factory, there was some disruption to deliveries of raw material and some workers had trouble travelling but in the main we were able to function quite well.”

Politically, the future is far from clear; but commercially, P&G’s plans for the Egyptian business continue unabated. Next month, for example, a new regional Business Planning Centre will become functional, where a staff of 300 will manage the logistics for all P&G activity in Africa and the Middle East.

“At a corporate level,” says Attas, “Egypt is seen as the hub of activity thanks to its strategic location and favourable incentives to inwardly investing businesses. P&G employs about 1,500 talented Egyptian men and women, in addition to about 10,000 through indirect employment. The jobs P&G is providing and those in the process of being created by P&G suppliers who have also decided to invest in Egypt are sending a message to the wider business world that Egyptian workers can be relied upon.”

In the West, P&G has a stable of over 300 different brands across three different categories: beauty & grooming, health & wellbeing, and homecare. From Cairo, though, only a tiny fraction of these brands are sold, concentrating on such commodity items as washing detergent and soaps—in fact the Egyptian factory has become the main producer of Ariel washing detergent for all of the Middle East.

But P&G Egypt is far from just a logistics hub warehousing products made elsewhere: from a modest US$2 million venture in 1986 (the company celebrated its 25th anniversary in Egypt last year) and with just 50 employees handling two brands, P&G Egypt has become the country’s biggest exporter of packaged goods and one of Egypt’s top 10 exporting companies dealing with more than 37 countries in Africa, Asia and Europe. There are now two major manufacturing plants in Cairo—the original 120,000 square metre factory where Ariel is made and which boasts the largest synthetic detergent tower of its kind in the Middle East; then, thanks to a fine productivity record there, the business felt justified in investing in a second plant four kilometres away which will eventually be 2.5 times the size of the original.

The first stage of the new plant came on-stream last year—just a month or so behind schedule, despite all the prevailing disruption, and has so far created another 560 badly needed jobs. “These are quality jobs,” says Attas. “Here in Egypt, we follow the parent company’s principles, which aim to respect and nurture employees, very closely.” In 2011, for the second round in succession, P&G was recognised as one of the Middle East’s top 10 employers by the independent international HR consultants Hewitt Associates. Even though some businesses closed during the revolution, life at P&G continued unchanged with no lay-offs anywhere.

The first stage of the new plant is dedicated to making Pampers disposable diapers. Some could argue that in Egypt—where the level of affluence in low and limited cash in hand is best spent on necessities rather than luxuries—that disposable diapers are incongruous. But in fact, their usage is supported by many august medical bodies which see disposable diapers as a much healthier option than continually re-using cloth diapers, particularly where facilities to wash at high enough temperatures and dry the cloth thoroughly are lacking.

To ease the transition, P&G funds educational promotional material of a generic nature. It also ensures that it has a range of products from the very simplest, low-cost diaper to more sophisticated designs that are common in developed markets. On the other hand, it has to be remembered that Pampers made in Egypt are also destined for much more affluent markets in the Middle East, Asia and Europe.

In the meantime, P&G Egypt is on another quest, namely to meet the corporate sustainability targets which require all sections of the company to reduce environmental impact by 20 per cent by the end of this year. So far, Egypt is doing well and should have no problem meeting the deadline. To date, it has cut waste by 57 per cent and water usage by 22 per cent with work in progress ahead of target on other performance indicators.

“The Pampers plant,” says Attas, “is expected to be the first factory in Egypt with zero waste-to-landfill. What we can’t recycle ourselves is sold on to other manufacturers who can make use of the manufacturing waste.”

Levels of employment at P&G Egypt are established on purely commercial grounds and therefore will only ever be what is needed to do the job; but it doesn’t mean that benefits don’t trickle down to other parts of the population. P&G has a whole raft of initiatives, including the company’s global cause programme ‘Live, Learn & Thrive’, which aims to improve life for children and youth around the world. Its activities include the provision of life-saving vaccinations and safe water in Africa, safe homes across Europe, educational opportunities in Asia, essential nutrition in North America and early childhood development in Latin America.

It’s not exactly creating a pampered existence for all; but the manufacture of Pampers in Egypt is spreading some good over and above the babies that get the immediate benefits.