(Adds quotes from statement and background)
CAIRO, Oct 26 (Reuters) - Egypt's top cigarette maker Eastern Company's
EAST.CA
raw material reserves have halved due to the dollar shortage and if the issues persists it will be forced to suspend production and sales, the company said on Wednesday.
Egypt has grappled with an acute shortage of dollars since a 2011 uprising drove away tourists and foreign investors.
That has hurt the ability of companies to import, hampering manufacturing and raising costs.
"Key requirements for production that have no local alternatives are drawn down to six months, which means that if the situation persists for a longer time the company will have to halt producing and selling important commodities to consumers," the company said in a statement.
The firm said it requires $30 million per month to purchase raw materials and spare parts and that Phillip Morris, which has an agreement with Eastern Company to produce its local brands, has halted paying dues in dollars in return for its production.
The company added that its strategic reserves as of the end of September had been drawn down to 12 months worth of supplies from 24 months normally.
(Reporting by Asma Alsharif and Eric Knecht; Writing by Ola Noureldin; editing by Susan Thomas) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))
CAIRO, Oct 26 (Reuters) - Egypt's top cigarette maker Eastern Company's
Egypt has grappled with an acute shortage of dollars since a 2011 uprising drove away tourists and foreign investors.
That has hurt the ability of companies to import, hampering manufacturing and raising costs.
"Key requirements for production that have no local alternatives are drawn down to six months, which means that if the situation persists for a longer time the company will have to halt producing and selling important commodities to consumers," the company said in a statement.
The firm said it requires $30 million per month to purchase raw materials and spare parts and that Phillip Morris, which has an agreement with Eastern Company to produce its local brands, has halted paying dues in dollars in return for its production.
The company added that its strategic reserves as of the end of September had been drawn down to 12 months worth of supplies from 24 months normally.
(Reporting by Asma Alsharif and Eric Knecht; Writing by Ola Noureldin; editing by Susan Thomas) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))
