Summary

The Chamber participated in a symposium on the reality of industry in Lebanon, and presented problems and solutions at the Scientific Center for Manufacturing and Production

Description

Attendance: • Heads of departments in the Ministry of Industry in Beirut and regional areas. • Lebanese Industrialists Association. • Chambers of Commerce, Industry, and Agriculture in Beirut and the South. • Heads of industrial clusters in Bekaa, Metn, Keserwan, Choueifat, the Southern Suburbs, the South, Jabal Amel, and Naameh. • National Council for Scientific Research. • Director General and employees of the Scientific Center for Manufacturing and Production.

Seminar Objectives:

To develop specific scientific and technical studies that contribute to the establishment of new factories in Lebanon to improve the social and economic reality.
To contribute to solving technical and technological problems faced by factories through funding related research and potentially establishing companies for this purpose.
To prepare scientific studies that provide answers to some industrial problems.

General Status of Industry in Lebanon: The Lebanese industrial sector has recently faced a series of crises and challenges that have significantly impacted its stability and growth. These began with the COVID-19 pandemic, which led to disruptions in supply chains and production, followed by rising energy prices due to the Russian-Ukrainian war, and the banking and monetary crisis that erupted in the second half of 2019. Internal political complications and regional issues, along with the pressure since October 2019, have further complicated the situation. These combined factors have exacerbated existing chronic issues in the industrial sector, such as lack of funding, high production costs, insufficient industrial zones equipped with basic and advanced infrastructure, lack of actual protection for local production, and unfair competition from unlicensed institutions, among other major challenges.

Through the experience of the National Council for Scientific Research and its participation in the IRALEB program for years, it has become clear that industrial studies in Lebanon have not achieved the desired progress. The cooperation between the industrial and scientific sectors remains very limited and largely relies on solving simple scientific problems. This situation does not provide the expected benefits for scientists and researchers who are always striving to achieve advanced scientific accomplishments, nor does it contribute to enhancing productivity levels in terms of specifications, quality, and other aspects.

Industry Status in the Provinces:

The Bekaa region has been a vital artery for Lebanese industry, contributing to raising the level and quality of national products and competing with foreign products in local and international markets. Bekaa industrialists have managed to continue production and export their products despite the difficult conditions in Lebanon. Here, the Bekaa Industrialists Association plays a significant role in promoting research and development in local industries, exchanging knowledge and expertise among industrial companies, and working to improve quality and efficiency in production processes in Zahle and other industrial areas. The region is notably characterized by a high percentage of food industries.
Before 1975, industry in the South consisted of simple crafts to meet community needs, such as blacksmithing, shoemaking, furniture making, soap making, baking, confectionery, and some handmade crafts like shoes in Bint Jbeil, pottery in Rashaya Al-Fakhar, and soap in various villages. Due to consecutive wars, many industrial sectors were destroyed, labor was displaced, and areas were fragmented and isolated from each other. After liberation in 2000, residents returned to their villages and towns, and investment in industry began to increase gradually. The number of factories rose, and some items began to be exported abroad, such as food products, textiles, printed materials, shoes, furniture, electrical generators, and recently chemical products like cleaning, sterilization, and cosmetic materials.
The economy of Mount Lebanon mainly relies on industrial activities, and this province houses the highest percentage of industrial establishments in Lebanon, accounting for 58% of total institutions. With more than 12 industrial areas in Mount Lebanon and proximity to the Port of Beirut, the largest port in Lebanon, these factors collectively contribute to the development of industrial projects in the region.

Problems and Challenges: The challenges facing the industry in Lebanon are complex and multi-dimensional, requiring close cooperation among various sectors to find effective and sustainable solutions. These challenges are on two levels: • The first level is general, affecting the sector as a whole and related to the state's general policy. It is very difficult for the scientific center to assist at present due to various known complexities at political and other levels. • The second level is more specific and somewhat manageable, related to narrowly scoped projects, either at the level of small industrial clusters or small groups of industries where some projects can be implemented and managed.

Challenges at the First Level:

Funding for scientific research from the industrial sector is almost non-existent. When available, it is limited to small applied research that does not reach the level of advanced research that could place Lebanon at the forefront of scientific and industrial nations.
The fragile economic sector's focus on tourism, banking, and other services has marginalized productive sectors.
Renewal of licenses: Difficulties in the process of renewing licenses due to bureaucratic complications and required conditions, in addition to unlicensed factories, expose them to legal risks and restrict their growth and expansion opportunities.
Lack of sufficient industrial areas or specialized industrial cities with infrastructure.
Open borders and non-compliant goods: Rapid border penetration by non-compliant goods presents a major challenge, affecting the reputation of Lebanese products.
Negative impact of trade agreements: Some trade agreements may negatively affect the ability of factories to export their products, increasing competitive challenges.
The consecutive governments’ lack of sufficient attention to the role of industry in advancing the national economy, except recently when the financial crisis hit and the rentier economy collapsed, leading to calls for a structural transformation of the economy from rentier to productive.
Insufficient energy supply and the high cost of fuel. Recently, industrialists have turned to alternative energy, which has compensated part of the energy needs of factories during the day, but its cost is still high.

Challenges at the Second Level:

Reliance on importing ideas and technologies from abroad and adapting them to the Lebanese context instead of developing innovative solutions that meet our specific needs.
Labor shortage: Industries suffer from a shortage of labor to carry out tasks within factories, affecting production processes and efficiency, in addition to difficulty finding skilled and specialized Lebanese labor except in some industries due to emigration abroad, moving to the capital, or dissatisfaction with wages, which created a significant need for labor partly compensated by seasonal or on-demand foreign labor.
Laboratory problems: Lack of accuracy in results and discrepancies between different laboratories within Lebanon and European laboratories affect product quality and compliance with global standards.
Lack of feasibility studies for projects.
Lack of public awareness of the role of industry in developing and sustaining the economic cycle and the tendency towards easy service sector profits.
Environmental issues resulting from, for example, odors from animal slaughterhouses and cattle farms, leather tanning especially on the airport road, and the overflow of Nahr Al-Ghadir.

Proposed Practical Solutions: • Allocating a small portion of factory budgets to introduce some technologies that can contribute to improving their products and services in addition to their profits by raising quality and efficiency. • Providing specific training programs for workers in some industrial sectors to develop their skills and increase their knowledge of new technologies and innovations in various industries. • Encouraging entrepreneurship and innovation. • Negotiating with local and international shipping companies to reduce their prices or suggest incentivizing discounts. • Contributing to holding international exhibitions outside Lebanon. • Proposing the establishment of factories outside Lebanon to employ Lebanese labor. • Most of the energy production plants in Lebanon have become obsolete or at the end of their productive life, necessitating investment in new production plants and investment in renewable energy, as well as introducing the concept of energy audits within factories. • Assisting in attracting light and medium traditional industries and foreign industries (e.g., assembly industries), increasing job opportunities, especially for those with professional specializations. • Working on introducing Industry 4.0 in some large factories. • Applying the cluster system in some industries through remote production lines, increasing job opportunities and skill development. • Supporting the concept of low-tech projects. • The center, through this meeting, adopts a study related to solutions for unpleasant odors resulting from slaughterhouses and emitted from Nahr Al-Ghadir.