Industry
| The Lebanese industry will face
some major challenges in the coming years. This sector is one of the most important
in the country as it represents a main source of employment. The challenge will
be to keep its level of employment and improve the competitiveness in a non-favourable
environment. |
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The Lebanese industrial sector is not very diversified, with less than ten sub-sectors,
among which :
- The plastic industry : Leading companies are producing containers, tubes,
domestic items, and advertising materials. Some of these are very competitive
and have established production units outside Lebanon.
- Textile : Spinning mills, and readymade, knitting and weaving factories
are the main components of the Lebanese textile industry. It is very export oriented
with more than 50% of production sold abroad.
- Furniture industry : thanks to a sustained internal demand, the leading
companies in this industry have implemented modern production processes and are
now competing on foreign markets
- Paper industry : This sector also invested heavily in modernising production
tools.
- Marble industry : Using up-to-date equipment, this industry grew with
the domestic demand generated by the reconstruction. It is now exporting to the
Gulf and to Europe.
- Cement industry : Right after the war, this was among the main industrial
products and is now dropping as major infrastructure projects have been completed.
- Wood industry : This is a very fragmented industry, ranging from door
manufacturing, to mousharabieh and traditional furniture…
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The Lebanese industry is usually fragmented and
often family owned. The major manufacturers hiring more than 50 employees represent
less than 1% of the total number of industries in the country. |
But one major step for the Lebanese industry would be to improve the quality of
production, since regional competition is getting tougher and Lebanese goods are
suffering from cheap imported products.
Simultaneously, the cost of production of Lebanese goods does not allow export
towards the regional markets. This high production cost is due to an educated
work force, social security contribution costs and the cost of energy sources
(electricity and fuel). Hence, replacing industrial production with a comprehensive
marketing plan is widely needed.
Lebanese companies able to produce quality and value added products are already
doing well on foreign markets, however they are the exception. The whole sector
would have to capitalise on the image of quality that Lebanon boasts, to concentrate
on smaller scale, higher value added production. Furthermore, Lebanon is in the
process of entering the WTO and is about to sign into the Euro-Med program. In
this framework, substantial reduction on custom duty taxes have already been implemented.
Signing these agreements (especially Euromed) will create a free trade zone between
all the countries bordering the Mediterranean Sea.
If this is an opportunity for companies prepared for such changes, it is also
a danger to the unprepared. Government programs have been established in order
to enable the small and medium sized industries to benefit from the opening of
these markets. Two of these are the Industrial Modernisation Program that will
create a hands-on business advisory service and providing technical assistance
to companies in the sector and in other areas of manufacturing industries, the
other is elcim (see : www.elcim.info)
Yann
Rotil
February 2004 |
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