Lebanon’s food manufacturing sector took a heavy blow during the 34-day conflict between Israel and the Lebanese militia Hizbullah, recording tens of millions of US dollars in direct damages and more than US$500m in indirect losses.
Several factories and warehouses were bombed during the war, including the country’s leading dairy producer, Libanlait, which has lost an estimated US$21m, and the US$50m Maliban factory, a glassware and jar manufacturer that supplied the food and drinks industry.
During the war most manufacturers had to close due to a lack of staff, distribution difficulties, and the threat of bombing; equally, Israel’s sea and air blockade of Lebanon, which ended last month, affected exports and the importation of foods and raw materials.
As a result manufacturers have lost sizeable export orders to neighbouring countries, such as Syria, said George Nasraoui, president of the Syndicate of Lebanese Food Industries and director of Al Rabih foods.
“Around 75% of our products are exported, some factories 100%, so the sector has paid a high price. I lost the export market, especially for Ramadan [the Muslim month of fasting], which usually accounted for 15% of overall yearly sales.”
Other companies are in a similar position, with Ramadan accounting for up to 25% of annual sales for certain manufacturers.
Also hampering recovery is the damage levelled to the agricultural sector, with crops damaged by the violence or inaccessible due to unexploded ordinance, particularly in the fertile south and the Bekaa valley. The Association of Southern Farmers estimates damage to the sector at US$400m. Food sales during July and August were down 15% to 20% said Nasraoui.