Lebanon aims to capitalize on Russia’s decision to ban imports of food items from Europe and the U.S. by exporting agricultural produce to the country of 150 million citizens, industrialists and experts said.
“The private sector is currently preparing to enter the Russian market as part of a long-term strategy to increase its exports and revenues in the face of the rising cost of production in Lebanon,” head of the Association of Lebanese Industrialists Fadi Gemayel said in a statement to Al-Markazia.
“We are willing to open new markets and we are capable of doing so,” he said, adding that Lebanon was planning to export its agriculture produce to Russia following the ban imposed by President Vladimir Putin on imported goods from EU countries.
On Aug. 7, Russia banned all meat, fish, dairy, fruit and vegetable imports from the EU, the U.S., Norway, Canada and Australia for one year to retaliate against Western sanctions on Moscow over the Ukraine crisis.
“The Russian market is currently in need of a wide range of products and we expect it to be a very promising market for Lebanese industries,” Gemayel said. “We are currently negotiating the types of products that will be exported to Russia.”
Lebanon’s balance of trade with Russia stood at $17.068 million up to July 2014.
Former Industry Minister Vreij Sabounjian said the new initiative aimed to seize the opportunity for Lebanese industrialists to export their products to a new market, adding that in Russia, consumers care more about quality than prices.
“However, we should sacrifice a bit at first and reduce our prices to be able to enter the Russian market while maintaining our operations and creating job opportunities for our people,” he said.
Figures released by the Industry Ministry show that industrial exports totaled $1 billion in the first four months of 2014, constituting a decrease of 14.5 percent from $1.2 billion in the same period of last year.
Industrial exports reached $277.1 million in April 2014, up by 7.1 percent from $258.7 million in March 2014 but down by 6.8 percent from $297.3 million in April 2013.
Overall, Lebanon exported its industrial products to 40 African countries, 40 European economies, 26 Asian countries, 21 countries in the Americas, 19 Arab countries and four countries in Oceania in April 2014.
Gemayel said Lebanon could not compete with other countries that are producing at lower costs unless it produces high quality products.
“The Russian market comprises around 150 million consumers,” he said, adding that if 3 to 4 percent of them demand high quality production, Lebanese industries will then succeed in gaining a very important export market.
Industrialists have repeatedly complained about the high cost of energy, labor and land and have urged the successive governments to take measures to protect Lebanese industries.
The high cost of electricity has long represented a major challenge for Lebanon’s industrial sector. Moreover, an increase in electricity blackouts has had a detrimental effect on local industries – causing extra expenditures due to over-reliance on generators while also impeding productivity.
“Lebanese factories are still affected by the excessive power cuts which are [driving] them to either stop production or resort to alternative energy [sources] such as generators by incurring extra costs,” he said. “This is causing factory owners to incur heavy losses.”
Sabounjian said that Lebanese industrialists must expand their relations with clients in other countries instead of only focusing on minimizing the cost of production.
“It is important to minimize the cost of production but opening new routes can also bring in more revenues to the sector,” he said.
The Daily Star