08 September 2006
BEIRUT: The hopes of Lebanon's industrial sector were dashed Thursday when Israel refused to lift the two month old naval blockade that has driven up the costs of production and consumer goods.
The president of the Syndicate of Importers of Food Stuffs said the blockade has caused shipping costs to skyrocket, leading the price of some perishable food-stuffs to increase, while merchants are reporting shortages of fast-moving consumer items - including canned tuna, meats, grains, detergents, rice and soaps.
"Lebanon has been in this situation nine or 10 times since the 1970s, so people know they need to stock up on necessity items in times of war," said Joseph Aour.
The 42 members of his syndicate cumulatively import $1 billion worth of goods per year from brands such as Procter and Gamble and Nestle. All of their shipments have been held in containers in various ports scattered across the Mediterranean since July 13.
"After the cease-fire went into effect we all thought the blockade would be lifted, so no one sold anything. If the blockade ends today, it will take 10, 15, maybe 20 days for goods to arrive in Beirut and prices to stabilize," Aour said.
Everyone in the syndicate contacted shipping companies to proceed with deliveries to Beirut on Thursday, he said.
The head of the Lebanese Industrialists Association was optimistic that manufacturers will be able to resume regular production schedules within three to four weeks once shipments of raw materials are allowed into ports.
"The shipping companies are prepared, and I just spoke with Finance Minister Jihad Azour on the phone who said he was willing to increase shifts for Lebanese customs officials to 24 hours per day if need be," said Faddi Abboud. "It will be normal in a few weeks if and only if the central bank and commercial banks intervene to help industrialists whose factories have been destroyed."
Problems faced by importers will not entirely disappear with the blockade, however. Many manufacturers may not have the funds to make scheduled VAT payments or customs duties on imported goods.
In addition, some business owners doubt the ability of Lebanese customs to clear an influx of imported goods in a timely fashion.
Ralph Sayed, owner of the textile company American Garment Industry (AGI), thinks his orders which are being held in containers in Cyprus, Larnaca and Egypt will be delayed at customs for at least two months.
Since it take a minimum of 60 days to process, package and ship clothing to America, he estimates it will be a total of five to six months after the blockade is lifted for AGI to begin exporting regularly.
"First we will have a bottle-neck with the shipping companies being able to proceed with deliveries to Lebanon, and then goods will get held up clearing through customs," Sayed told The Daily Star.
"Also we are going to see a lot of problems with people not being able to pay customs fees on freight, because regardless of how big a company you are everyone is experiencing cash flow problems right now."
The president of the Beirut Port, Hassan Qorteim, said the port operates 24 hours a day transferring cargo and items are cleared as soon as they are collected. He declined to estimate the length of delay shipments might face once they arrive.
"We don't know the number of containers or how many are waiting outside, all we know is that a number of ships have already started to come," Qorteim said.
