Xerox, one of the biggest American corporations to have been excluded from operating in the Arab countries by the Arab boycott of Israel, is open for business in Cairo.
It is a modest operation and still beset by troubles in its early stages. Nevertheless, it represents something of a symbolic breakthrough, showing that Egypt is now doing business with blacklisted companies willing to make investments beneficial to the Egyptian economy.
Egyptian officials say the country has decided to implement unilaterally a policy it was unsuccessful in persuading other Arab countries to adopt, that of accepting business relations with some blacklisted companies of their investments on the Arab side equal or outweigh their dealing with Israel.
Western experts in boycott matters cautioned, however, that this country is not ready to abandon its adherence to the boycott altogether. Proposals by blacklisted firms that have been approved so far, they said, can be viewed as being in technical compliacne with boycott regulations.
Last year Egypt reached an understanding with several major American corporations to work for their removal from the blacklist if they would proceed with much-needed investments here. Removal from the boycott list would open the door to lucrative markets from which they are now excluded, like Saudi Arabia, Kuwait and Iraq.
Egypt has not succeeded in getting them off the list because the Arab Boycott Commission, headquartered in Damascus, has not met since President Anwar Sadat's peace initiative last November split the Arab world. At least four of the companies are going ahead with operations here anyway.
One is Xerox. Another, Coca-Cola, is participating with Egyptian partners in the development of citrus groves near the Suez Canal and still hoping to market its soft drink here to compete with Pepsi and Canada Dry's Sport Cola.
[At the same time, according to a recent account in the Jerusalem Post, Coca-Cola plans to set up three plants in Belt Shean, Israel, in a project heavily financed by the Israeli government.]
Colgate-Palmolive is planning a toothpaste factory here, according to infomred sources, an Ford Motor Co. is planning a truck and engine plant near Alexandria.
Xerox opened its business drive with half-page advertisements in Cairo newspapers last week saying, "Now in Egypt!"
The advertisement invited customers to visit the Xerox office in a converted apartment near the Nile in central Cairo but gave no telephone number. That is because Xerox has been unable to obtain telephone of Telex service, a common plight here.
Delivery of the first machines began early this week, according to marketing manager Nickolas Nakfoor, but Xerox is not yet able to supply the duplicating paper because it is tied up in customes on the Alexandria docks.
That may be a drawback when it comes to soliciting customers, because leasing is an unfamiliar concept here and Egyptians evidently prefer to buy their Xerox machines outright. There are said to be more than 100 of them already in the country, purchased outside and imported illegally - including, by one authoritative account, a highly sophisticated model at Sadat's office that has been sitting idle for months because no technician here knows how to operate it.
The fact that the copiers are to be leased and not sold, however, may allow Egypt to continue claiming that it is technical compliance with the boycott, since Xerox is not importing finished products for sale. The machines are admitted to the country as part of Xerox's estimated capital investment of $10 million.
Nakfoor said customers who lease the machines can pay for them and the accompanying service contract in Egyptian pounds or in foreign currency. The foreign exchange earnings are a key to determining whether the venture will succeed since profits in Egyptians pounds are valueless outside Egypt.
Egyptian customs officials have not yet committed themselves to waiving the duty on the copiers. If the duty must be paid, the rental fees might have to bet set so high as to make the copiers unmarketable, informed sources said.
Xerox is importing two models for leasing and is also planning to open a chain of stalls or shops where its own staff will provide photocopy service to those who do not need macept photocopied material. Is still something of an innovation here, where most records ae kept by hand and officials often refuse to accept photocopied material.