TL_wk1_Kobayter

LEBANESE INDUSTRY AGRO-FOOD SECTOR CHALLENGES & NEEDS LOGISMED FORUM 23 – 24 NOVEMBER 2010 CASA LLOTJA DE MAR, BARCELONA HUSSAM KOBAYTER C.C.I.A. TRIPOLI - LEBANON

INDEX I- Introduction II- Over view 1- Lebanese Industrial Sector 2- Main Export Destinations 3- Industrial Activities Distribution 4- Agreements III- Agro-Food Industry 1- Agricultural Sector 2- Activities Distribution 3-Challenges 4- Recommendations IV- Logistic Training Needs

I- INTRODUCTION The Lebanese economy is a free market economy that has traditionally been dominated by the services sectors.

Services remain the backbone of economy with agriculture and industry lagging behind.

As for the manufacturing sector, if a single word could sum up the history of industrial activity in Lebanon, resilience, would be that word.

Since the year 2000, Lebanon’s business environment started undergoing considerable change. This is among others: Customs, copyrights, patents, promotion of investments, food safety, consumer protection, bilateral tax conventions, and privatization, bilateral and multilateral trade agreements, and long-term facilities by BDL.

Furthermore, the Port of Beirut and Customs Administration have undergone similar modernization processes. The Port has made big investments to computerize its operations and upgrade its equipment, thereby simplifying procedures, speeding up operations and decreasing costs.

II- OVER VIEW

1- Lebanese Industrial Sector: • 17.3 % of GDP (second largest employer after the P.S.).

• Employs 200,000 people (25 % of the labor force).

• Industrial exports represent 95 % of total exports (about $ 2 billion).

2- MAIN EXPORT DESTINATIONS:

Destination

Export Values (million $)

Percent of Total

European Union

200

9.38

Arab Countries

893

41.83

Industrial Countries (USA, Japan, Canada, etc‌)

652

30.55

African Countries

120

5.65

Asian Countries

78

3.60

3- DISTRIBUTION OF SECTOR BY INDUSTRIAL ACTIVITY: Sector

Percentage

Agro-Food

22%

Minerals

7%

Chemicals

19 %

Leather

12 %

Paper

8%

Textile

11%

Metals

8%

Electric

6%

Transport

2%

Furniture

4%

Other

1%

Number of Members

100 %

4- TRADE AGREEMENTS: • EU-Lebanon Association Agreement was established in 2003: Free Trade Area, Technical and financial assistance through the MEDA program and (ELCIM) program for modernization of SME. • Greater Arab Free Trade Area (GAFTA): Established in 1997 between all Arabic Countries.

• UNIDO Agreement for implementation of new projects relating to product traceability, and laboratories accreditation.

• World Trade Organization (WTO): Negotiations leading to WTO membership are underway.

• Bilateral Free Trade Agreements with: Egypt, Iraq, Syria, Kuwait, & U.A.E.

III- AGRO-FOOD INDUSTRY 1- Agricultural Sector: • Lebanon is located in the Eastern corner of the Mediterranean sea in the Middle East with a population of 4 millions inhabitants.

• Mountainous areas represent 1.000.000 ha • Cultivated areas represent 250.000 ha • Forest areas represent 120.000 ha • 12 % of GDP • Employs 10 % of the population • Abundant water availability

The Major Agricultural Products are: Cereals, roots & tubers, pulses, nuts, oils, vegetables, fruits, and industrial crops.

2- DISTRIBUTION OF ACTIVITIES: Major Agro-Food Industries: Activities

N. Of Establishment

Workforce

N. Of employers

Meat processing

38

1118

1055

Fish progressing

33

171

123

Fruits & vegetables processing

160

1226

854

Vegetable & animal oil & fats

307

1044

446

Dairy products

154

981

593

Ice cream

58

387

237

Grain mill products

182

1329

856

Bakery products

2181

9236

5818

Sugar

34

149

79

Confectionery products

1007

5561

3776

Alcoholic drinks

64

396

256

Soft drinks & mineral water

115

2677

2504

Others

200

1903

1598

3- CHALLENGES: • Technical barriers to exports (even customs barriers) • Products quality • Old and outdated structure of the Lebanese industrial sector • High costs of production in comparison to other Arab Countries • Difficulties in access to distribution networks

4- RECOMMENDATIONS: 1- Administrative: • Reinforcing the role of IDAL (Investment Development Authority of Lebanon) and accelerating the application of one-stop-shop system • Providing incentives for investments for industries with value-added technologies • Reducing the costs and delays of customs clearing procedures through more advanced IT & logistical systems

2- Industrial Infrastructure: • Development of new Industrial zones • Development of new free Zones at ports and airports 3- Labor law and social security: • Providing temporary exemptions for newly established industries • Modernizing the labor laws

4- Promotion of exports: • Setting a dynamic calendar of visits to foreign international exhibitions while also organizing similar ones in Lebanon • Promoting the “made in Lebanon” image • Creating a Lebanese council for export development 5- Finance: • Improved access to capital • Simplifying credit procedures an reducing their cost • Reinforcing the role of public financing as well as the E.U. MEDA programs

6- Quality Infrastructure: • Supporting the international accreditation, testing, & certifications (ISO, HACEP, etc..)

• Improving awareness of private sectors towards quality issues • Establishment of standards of Quality, Health and safety environments

IV- LOGISTIC TRAINING NEEDS • Putting in place analytical and microbiological laboratories • Ensuring quality control management through International inspection tools • More automated and computerized systems • Higher education pre-requisites: - High management (degree or master level) - Middle management (TS graduates) - Skilled workers (with a Baccalaureate Technique “BT "diploma) • Improved workers and technicians skills: - Adaptation to new IT machinery - Know how transfer - Training courses for employees

• Adequate infrastructures of: - Buildings - Utilities - Transports - Storage space - Delivery (time and goods conditions) • Adequate packaging material • Adapted environmental programs