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On Monday, eXtra, also known as United Electronics Co, announced its decision to cancel its expansion efforts in Egypt, citing findings from a feasibility study. The move is projected to result in a financial setback of approximately SR38 million ($10.13 million), as stated in a bourse statement released by the company.
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In 2021, the Saudi-based consumer electronics firm declared its intention to create its inaugural subsidiary outside the GCC in Egypt, investing an initial amount of 1 billion Egyptian pounds ($32.41 million) which was equivalent to $63.6 million during that time. However, with Russia's incursion into Ukraine, Egypt's already fragile economy has been further destabilized, resulting in a decline in tourism, a surge in commodity prices, and foreign investors withdrawing approximately $20 billion from its financial markets.
Why it matters
In an effort to aid Egypt's economy, Gulf states have injected tens of billions through various channels. However, a shift has occurred in recent months as financial investments are now being linked to substantial reform and currency stabilization efforts. Egyptian expansion opportunities are attracting interest from Gulf companies as they seek to penetrate a large market for their products and services.
