Is the Suez Canal open? The short answer is yes. This matters for any electronics manufacturer -- or anyone, really -- trying to ship anything westward from Asia by sea.
The Egyptian port city of Suez has been a focus of demonstrations during the past week’s revolt against the Cairo government. But several sources, notably Bloomberg and Thomson Reuters , are reporting that the Suez Canal is still open. A Maersk Line official told the Wall Street Journal that communications cuts by the tottering Mubarak government have caused delays, and curfews have affected some scheduled crew changes. But for the most part, the shipping business appears only lightly affected by the past week’s dramatic events.
Egypt’s geography means its politics tends to affect life beyond the national borders. A report in Wired Magazine last year, citing data from Lloyd’s of London and others, argued the Suez canal was among the world supply system’s most critical sea links. The analysis looked at the number of ships that used the world’s sea cargo facilities, the value of the goods they carried, and the size of the vessels that docked. By that measure, at least, the Suez is the Earth’s second most-important port, after the Panama canal, and ahead of more modern facilities in places like Singapore, Shanghai and Barcelona.
It’s also undergoing an expansion, according to a report from Port Technology International, which says Suez plans to double its capacity. As planned, Suez will be the largest container port in the Mediterranean.
For electronics manufacturers, Egypt represents a market for both labor and customers, and several deals have been in the works. Japan’s Toshiba Corp. (Tokyo: 6502), reports Juro Osawa with Dow Jones, has announced it intends to continue with plans to open an LCD television production facility in Egypt next month, in a deal with local electronics manufacturer the El Araby Group.
A report by Robotics Wire, which tracks electronics manufacturing, said the plant could ship both components and finished products, looking toward 600,000 televisions this year and two million in two years. If true, the deal announced just two days before the anti-Mabarak protests began, would require that supply chains for parts to these factories and goods out of them continue to function. At least one large electronics manufacturer is expressing confidence in that.
Toshiba sold 15 million televisions last year. The new factory and the supply lines it depends on are part of the Japanese giant’s move to grab 15 percent of the Middle Eastern and African LCD market by the end of 2011, according to the Robotics Wire report.