|Lebanese printers threatened by loss of market dominance|
|Technological change, protectionism pose growing challenges...
Printing in Lebanon is more than just an industrial sector. It represents a tradition of freedom of expression. Beirut has been the printing capital of the Arab world for a long time.
In a region where strict censorship regulations are the norm, Arab publishing found a relatively safe haven in Lebanon, taking advantage of a constitution that guaranteed free speech.
Free enterprise capitalized on this and in the 1960s the printing industry became one of Lebanon's top industries. Printing presses flourished and were known for their quality and professionalism. Lebanon became the outsourcing country for printing jobs - books, periodicals, and even school books - in the Arab world. The industry grew until the end of the 1980s, unaffected by the civil war.
Lebanon today, with almost 750 printing presses, is still a major printing house in the region. The total production value of the industry is estimated to be in the range of $100 million annually, yet the industry does not seem to have recovered from the contraction of the mid-1990s. For the last three years the volume of the printing industry's exports have stagnated at around $30 million a year. Industry experts agree that costs of production soared in the mid-1990s, when the return of government control over the country brought with it taxes and custom duties.
Moreover, the price of electrical power and fuel rose dramatically, and Lebanon started losing contracts to countries such as Egypt, where energy and labor are cheaper.
During a chat in their offices in Beirut, Bassam Shbaro, the CEO of Mediterranean Press, said that the 1990s were also a time when technology transformed the printing industry and made it less dependent on human labor.
Lebanon lost one of its comparative advantages: know-how. Shbaro gave the example of computer-to-plate technology, in which the printing plates are directly and automatically produced from digital files. This removed the step of film production while improving productivity and quality, he added.
While statistics indicate that many printing houses invested heavily in modern equipment - in 1998 the industry imported new machinery worth the record amount of $17.3 million - Shbaro said that "most printing houses did not upgrade their equipment until it was too late."
"Countries in the region like Saudi Arabia had already invested in modern printing presses that took over the printing of Korans and religious material previously printed in Lebanon," he said.
He attributed the slow down of the nineties to regional conditions: "Libya, for political reasons, stopped printing schoolbooks in Lebanon. We lost the Yemeni schoolbook printing contracts, and Iraq has been out of the picture for a long time."
He said that the local market was not big enough to keep the country's printing presses busy all the time.
"Many printing houses, including ours, had to adapt to survive," he said. "The most obvious option for us was to expand our publishing operations and today 90 percent of our printing capacity is dedicated to our integrated publishing house."
The numbers indicate that books still constitute the bulk of the industry's exports. However the share of commercial items like brochures, annual reports, cards, invoices, stickers and labels has increased during the last five years. There are also some impressive success stories of small-size commercial printing houses that have adapted their operations to meet Arab export specifications.
The Arabesque Printing Press specializes in printing stickers and labels. Sixty percent of their production is shipped to various Arab countries while 25 percent of their products are indirectly exported as stickers and labels on industrial and specialist products.
General manager Ibrahim Haidar said that "the market for labels and stickers is directly related to manufacturing and the development of retailers and big supermarkets. These businesses grew steadily over the last few years and this had a positive effect on our industry."
"During my visits to the various markets that we service, I noticed that many Gulf countries invested in state-of-the-art printing machines," he said. "The problem is that these machines cannot be competitive unless they function at full capacity, while their local markets are too small."
Another problem that aggravates the region's overcapacity is that many countries protect their domestic producers by strictly regulating imports. Saudi Arabia now requires that three local printing houses testify they cannot do the job before imported stickers can be imported.
"We lost 20 percent of our direct exports to that market," Haidar said.
Beirut,05 10 2004
The Daily Star