Syrian industrialists put off by costs in Lebanon

[03-08-2013 09:44 AM]

Ammon News - BEIRUT (The Daily Star) - Despite ongoing efforts by the Industry Ministry to convince them otherwise, Syrian industrialists fleeing war at home are finding the costs associated with industrial investments in Lebanon too high. Caretaker Industry Minister Vreij Sabounjian told The Daily Star that he Friday met with a delegation of eight Syrian businessmen with plans on the table to invest in sectors ranging from thermal insulation and rubber to electric components.

“Some of the concerns highlighted by the delegation included high land prices and labor costs in comparison to Syria and other Arab countries,” Sabounjian said.

“We are working hard to find solutions to these problems, and one of the ideas we are working on is to build these factories in the free zones of Beirut and possibly Tripoli,” the minister added.

The ministry’s focus has so far been the Beirut and Tripoli free-trade zones, which offer business and financial incentives, including the possibility of full foreign ownership and customs exemptions in addition to long-term leases and lower utility rates.

Another goal the minister is keen to realize is forging partnerships between Syrian and Lebanese industrial firms, which could be one of the ways to cut the amount of investment needed, particularly pertaining to land costs.

A second meeting between the two sides is due to take place next week and the minister will be positing various options to help close a deal. One of those is a draft law cutting taxes on industrial exports by 50 percent.

Yet given the political wrangling occurring between Lebanon’s rival coalitions, Parliament is not expected to meet anytime soon, contributing to a general state of paralysis in the country. This lack of functioning state institutions makes Mohammad Choukeir, head of Chamber of Commerce and Industry of Beirut, think it could be too late for Sabounjian’s efforts to bear fruit.

“Very early on we talked about the need to facilitate licenses and a three-minister committee to encourage Syrian investments. But regrettably whoever wanted to move a factory out of Syria already did – whether to Egypt, Turkey, Iraq or Algeria.”

“Those who wanted to move a commercial company moved it to Dubai.”

Even some of the Syrian investors who initially considered establishing factories in Lebanon have taken a step back to further look into the investment costs.

Some of the biggest Syrian pharmaceutical firms had mulled moving their factories to Lebanon, an industry source told The Daily Star, but soon canceled their plans due to the excessive pricing of land.

In March, Sabounjian told The Daily Star that a dozen Syrian investors had applied for industrial plant licenses in Lebanon with millions of dollars to be invested over three years.

The Syrian crisis has, however, helped increase demand for Lebanese goods. Lebanese exports rose by 6 percent in the first half of the year and industrial goods by 13 percent up to April, The Daily Star reported.

The real figures could also be much higher, experts argue, due to a thriving smuggling sector, especially in pharmaceutical products.

Sabounjian is still hopeful that some of these plans will see the light of day but admits that no major industrial investments have been made so far.

“Wish me luck,” he said.

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