CAIRO: Employees of a cotton ginning factory in Minya ended a strike they began at the end of July after company management agreed to their demands. The roughly 1,000 workers of the Nile Cotton Ginning Company began the strike on July 28, when they went to collect their salaries and discovered that management had failed to pay what they regard as their financial entitlements. "We were promised a 15 percent raise instead of the 30 percent raise given to all workers in May, as well as the 7 percent increase we are entitled to, a worker in the Minya factory who requested anonymity told Daily News Egypt last week. "An executive board decision 16 of 2008 maintained the 7 percent increase but reduced the 15 percent raise - which has already been reduced from 30 percent - to 10 percent. "We started our strike on July 28, when we went to collect our pay and discovered that they had cut what we are entitled to. A 2003 law states that financial incentives must be distributed yearly and that financial incentives are calculated on the basis of salaries after annual increases, but [deputy director of Nile Cotton] El-Sayyed El-Seify doesn't want to do this, the worker continued. During the strike workers refused to collect their pay and closed the factory. Privatized in 1997, Nile Cotton has factories both in the governorate of Minya and in several locations in the Delta. In addition to cotton ginning the company produces soap, oils, fats and agricultural fodder. Workers in the Mahalla factory called off their strike on July 31 after they received a promise that a meeting of People's Assembly representatives from the Gharbeyya governorate and government representatives will be convened to discuss workers' demands on Aug. 10. Last week, El-Seify met with representatives of the Minya factory's trade union committee and a state security investigations representative. "[El-Seify] said 'I don't care about Hosni Mubarak, Ahmed Nazif or [minister of investment] Mahmoud Mohieddin. This is a private company and I'll do what I want,' the factory employee told Daily News Egypt. Minya workers ended the strike on Aug. 3 after a meeting was held between El-Seify, a representative of the Union of Spinning and Weaving Workers and two Ministry of Manpower representatives. Company management agreed to pay percentage incentive payments based on the basic pay received by workers on June 30. The company will undergo administrative and financial restructuring to provide cash flow to finance the promised October salary increases. The 2003 and 2008 annual increases (10 percent and 7 percent respectively) will be added to workers' basic salary from October, when exceptional percentage incentive payments will be calculated on the basis of workers' basic salaries after the addition of the annual increases. The meeting also decided that a committee from the Union of Spinning and Weaving Workers would visit the Minya factory in order to "make workers aware of the provisions of the Labor Law. Nile Cotton workers have repeatedly alleged that the company's poor economic performance and huge debts reflect the intention of its management to close down its ginning production and sell the extremely valuable land on which the factories stand. An article which appeared in independent daily Al-Araby in 2002 describes the deterioration in the company's performance after its privatization. The company was put on the market in 1997 for a price of LE 248 million. Al-Araby claims that the factory was severely undervalued, pointing to the fact that a single cotton gin costs LE 15 million and the company had 13 cotton gins, and thus claiming that its true value was LE 769 million. The article states that the Minya cotton gin and its factories were sold for LE 12 million - this despite the fact that the factory stands on 85 feddans of land and a meter of land in this location cost LE 5,000 at that time. The newspaper also alleges that Yassin Aglaan, a former member of Nile Cotton's executive board, raised loans on the company from Bank Misr in order to fund exports of sugar which never existed. Mohamed Seddiq, a senior analyst at Prime Securities Group, told Daily News Egypt that by January 2008 Nile Cotton had a LE 200 million debt with Bank Misr. It was agreed on Jan. 15 that the company would pay LE 85 million to the bank in return for Bank Misr waiving the interest accumulated on the loan.Seddiq says that financial reports indicate that Nile Cotton has a total of LE 344 million worth of debts, of which LE 189 million is in short term loans. "Nile Cotton is not doing well in terms of operational activities and its bottom line relies mainly on the capital gains realized from selling land, Seddiq told Daily News Egypt. "The company financials show that it is unable to meet its short term obligations. Thus, most of the operations are paused and hence, the company is selling some of its land in order to get the sufficient liquidity for paying their short term debts. "In our view, the company is in need of a total financial and operation restructure for its ginning operations, Seddiq continued.
