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Industry needs help with energy costs

President of Syndicate of the Owners of Paper and Packaging Industries in Lebanon, Fady Gemayel. (Photo courtesy of SOPIL)

BEIRUT: The high energy cost is weighing heavily on industry, a prominent industrialist told The Daily Star Thursday, urging the government to provide around $30 million to $40 million a year to support energy-intensive industries.

“Lebanon is receiving a lot of foreign aid, so I suggest an allocation by the government of a yearly amount of money to support the industrial sector until we begin with oil and gas extraction and solve this issue once and for all,” said Fadi Gemayel, president of Lebanon’s Syndicate of the Owners of Paper and Packaging Industries.

Gemayel, who is also running for the presidency of the Association of Lebanese Industrialists, argued that the energy cost could reach around 30 to 35 percent of the market price of products, a dramatic amount.

“We know that Lebanon pays very high energy prices while neighboring countries resort to subsidizing their energy, which provides them with a competitive advantage,” he said, adding that the difference in cost structure is very problematic for local industries.

“We are receiving these countries’ imports, and at the same time, they are impeding our exports because they are more competitive,” he added.

Gemayel emphasized the need for an intervention from the state similar to that of other countries, citing the example of Willonia, a region in southern Belgium.

“In Willonia, they allocate millions of euros to foster their industries,” he said.

“Why isn’t this possible in Lebanon?” he asked, while painting an optimistic image for the future for Lebanese industry.

“The Lebanese industry is a winning horse, and we proved to be very resilient in the face of the challenges we have faced in the past, but we must work on removing all the impediments for us to be successful in the future.”

Gemayel believes that the industry sector is a locomotive for other sectors.

“When the industry sector succeeds other sectors such as banks, insurance and transportation companies benefit from an increase in their businesses.”

He cited other measures that needed to be taken in order to boost the sector.

“We should find new routes for exporting our products,” he said.

Gemayel argued that export via Syria had become complicated since the start of the civil war in the neighboring country.

“There have not been long interruptions in transporting via Syria, but things have been erratic and we have been incurring an additional cost for insurance to export our products via this route,” he said.

He called upon industrialists to join their efforts in exporting large volumes of their products to specific markets to reduce export costs, using other routes such as sea for instance.

“We have to have a vision to do that, and we cannot wait for the Syrian crisis to end for us to start acting positively,” he said.

Gemayel also proposed taking advantage of the Lebanese brand names that are very well-known abroad in order to foster the different industrial sectors.

“We have to tie up with international Lebanese success stories.”

He added that Lebanese fashion designers, for instance, who are very successful outside Lebanon, should extend their works to other sectors.

“Elie Saab for instance can launch Elie Saab furniture, similar to what other international designers have already done such as Armani and Versace,” he said. “This would help in endorsing the furniture sector for instance.”

Other measures included in Gemayel’s plan if he wins the presidency of the Association of Lebanese Industrialists include fostering technical training in the industrial sector by cooperating with European institutions.

“We should also work on channeling more foreign direct investments to the productive sectors of the economy such as industry.”

 
A version of this article appeared in the print edition of The Daily Star on February 28, 2014, on page 5.

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