The Middle East office of Epson, the office automation vendor, has submitted a proposal to the company's top management to set up a printer assembly plant in Egypt.
Such a project would be in alliance with Epson's partner in that country, according to a top official.
Iran is the other regional market where Epson has a CKD (completely knocked down) facility for dotmatrix printers.
"The management has come back to us saying it is an interesting proposal, and could send a team at a later date to Egypt to scout for the possibilities there," said Khalil El Dalu, regional general manager.
"The intention is if we have such a facility, Epson will be able to better meet the printer requirements of both the Egypt and other markets within its vicinity."
Egypt represents a potentially huge market for office automation equipment and, recently, Canon, another Japanese company, was part of a venture that set up a copier facility in partnership with local companies.
Setting up a local facility throws up manifest possibilities escaping the still high import duties tops the list. An office automation product carries import duties of anywhere from 5 per cent to 35 per cent and even more. But, according to El Dalu, the situation on the ground is not overwhelmingly favourable.
"The currency volatility is the main concern. We have had distributors quoting a price on a tender and within months the currency situation has changed out of sight, either in their favour or against them.
"There is just no guarantee to know before hand that our partners will end up making money from such a deal."
On the whole, the Middle East market for office automation is expected to continue with the strong double digit growth of the recent past.
Epson sees strong possibilities from the UAE and Kuwait, while the recent unrest in Saudi Arabia might lead to "flat" market conditions for the sector.
As for Iraq, Epson is working with three partners to cover that market, though no formal agreements have been signed so far. The last quarter saw volumes for that market recording a sharp decline, brought on by the increase in violence.
"But we had decent volumes in the first quarter and we have identified six key products that will meet the needs of the Iraq market," said El Dalu. "Every IT vendor is watching the Iraq situation with interest."
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