India's IT caravan rolls to Egypt

A number of Indian IT companies are eyeing Egypt to set up their outsourcing centres there as it will be easier to tap the Middle East and the African market as well as the French speaking Europe. As a KPMG report suggests, Egypt is one of the new locations which will attract companies to set up centers there.

Companies like Wipro , Satyam , 3i Infotech, Mphasis and others have their operations in Egypt and some of them are planning to expand, focusing on manufacturing, government, banking and telecom sectors.

"Companies like Satyam and Wipro are catering to locations like Saudi and the Gulf regions and they are also interested to cater to locations in the Central Africa," commented Atef Helmy, board member, Information Technology Industry Development Agency. A number of reasons such as geographical proximity and the multi-lingual population are attracting the companies there.

"Egypt is definitely an emerging and interesting market. It is a location through which the Middle East and other regions could be tapped. What the Indian companies are doing is that they are outsourcing some of their work to Egypt and catering to their clients from there instead of India and other locations because of its geographical proximity and for other benefits," commented an industry expert.

Moreover, companies like HP (Hewlett Packard) and Infosys are providing training for the IT professionals there.

Though some of the regions in the Middle East are affected by the downturn, places like Saudi Arabia are attractive locations for the companies. "Saudi Arabia has plans of investing $3 billion for IT projects," said Helmy. "Hence, it is a very attractive and important market to be tapped. And Egypt is a location through which these markets could be tapped," he added.

To support and accelerate the relation between India and Egypt, Nasscom has signed a MoU with Egypt last month.

Egypt is also 25% cheaper in terms of labour cost as compared to locations like Phillipines, and 5% lesser as compared to India.

The $2.2 billion Egyptian IT sector currently has 30,000 tech professionals and is soon coming up with 2 more technological parks. These parks will house more than 20,000 professionals each.

As an emerging market, Egypt has seen a growth rate of 22% in the past and is expecting a growth of 15% in the current year. The Egyptian government has also made an investment of $50 million in domestic IT market so that in the tough times the IT sector should keep growing.