Politics aside, I feel you should have talked more on how this can positively/adversely affect Hanwha's positioning in the regional market, especially against traditional incumbents such as Axis but also against low-cost Chinese competitors such as Hikvision and Dahua.
It might be difficult to assess the market impact at the moment, but it should be noted that another Korean manufacturer, Samsung, has had great success covering the regional electronics market with its factory in Beni Suef, Egypt.
By definition, Hanwha is well positioned inside the Egyptian market with this. The regional question is unclear. For example, why would Hanwha have better positioned to sell in Saudi Arabia or Turkey, or Italy? I am genuinely curious to hear a theory about this. Thoughts?
Egypt generally has lower cost labour than the 3 countries you have mentioned. In addition its geographic position (as well as the presence of the Suez Canal) would likely give it an advantage as a distribution center. I believe similar motivations were behind Samsung setting up a factory in Egypt.
Egypt generally has lower cost labour than the 3 countries you have mentioned
But does it have lower labor costs than Vietnam, where Hanwha has their main factory?
likely give it an advantage as a distribution center
Perhaps, but the question I am curious to hear answered is why is it cheaper to manufacture small quantities in Egypt than their main factory in Vietnam?
To be clear, I get the Egyptian government is trading buying from Hanwha in exchange for local production but I am not sure why it would make more sense to manufacture in Egypt for export out of Egypt. I could be wrong so I encourage feedback.
Logistics. Local market is huge. Perhaps put higher taxes / levy's on dahua, hikvision (which are flooded in the market) as well as all other brands. And yes. Labour is cheap. Military factories have no labour costs as quite a number of personal working are serving their duty. So think all the shipping , storage, general ops will be free :)
Remember they have only talked about distribution in the region, not worldwide. If labour costs alone were a factor, I am not entirely sure that Egypt would necessarily be very different in terms of costs to Vietnam. However, when transportation costs are added to the picture, it would be probably be significantly cheaper to ship from Egypt to the Middle East and North Africa (MENA) region (and probably Europe and Africa as well) than it is from Vietnam.
Again, remember that this factory will be targeted towards a particular region, not everywhere.
To be fair: Given the huge role of Egypt's military in the country's economy (and everything else), it's fair to say that almost any sizable project in Egypt means dealing with the military (albeit in some cases this might be thinly veiled).
I actually think it is a smart move, alot of military contractors have a partnership build in their home country. This Mitsubishi and Lockhead on the new fighter in Japan to just mention one that came to mind.
Every 2nd submarine is build this way as well for alot of countries.
This happens all the time and remember Hanwha is a military firm and always was. No different to Samsung Techwin also being a weapons maker. So Um yeah makes sense i guess. If a Government wants inside support than that is the call. The ethical debate on which Gov is good or bad (arent they all quite subjective from their own points of view)
I tried to set up a factory in Alexandria in 1982 making a simple alarm system, what a disaster, sent all the parts and got not one produced product. There is zero common sense in this area. Your couldn't even go into the market and buy tools or nuts and bolts.
I did security installations as well and I figured out what took a American tech one hour to accomplish took the locals 20 hours. Used to ask my Egyptian foremen when he would finish a job and the answer was always "Inshallah" ( by the will of God)
I had a sales guy to sell a self contained alarm system, which we were going to produce, so after 6 months he had not sold one unit, I sat with Salleh and played like a customer and told him to sell me the product. So he asked "you want to buy an alarm system" I said no and he got up and left.
Most frustrating one year in my career. Yeah its been a long time since them but the mentality comes form thousands of years sitting in that Deseret.
"Like China, Hanwha partnering with the Egyptian government raises human rights and ethical concerns."
Well if this keeps going, we up import taxation and we are forced to purchase US made cameras, could be a win/win. Let's start getting as many of the other camera MFG's as possible on human rights violations; we have none of those issues in the US and we are ethical and moral; build here.