Running a once famed industry

Lebanon’s furniture makers get boosted

Lebanon’s furniture making tradition dates back thousands of years—thanks, in large part, to the cedar tree, the country’s national symbol. Historical records and religious texts often reference the high quality of Lebanese cedar wood, and its renown across the region as an important building resource and a material for luxury furniture. More recently, furniture making has been an important sub-sector of the country’s economy and a driver of small business entrepreneurship, but stakeholders say this once storied industry has witnessed a decline in recent years.

Lebanon has been in an economic rut for more than seven years, with GDP annual growth rates consistently in the very low single digits, coinciding with turmoil across the Middle East and a refugee crisis stemming from the civil war in neighboring Syria. Meanwhile, this period has also seen rising unemployment and poverty rates for both Lebanese nationals and refugees, as Executive previously reported. In such a climate, the furniture business has not escaped unscathed.

“Our assessment of the furniture sector showed that it was a very important sector for the Lebanese economy before the [economic and refugee] crisis,” says Cristiano Pasini, representative of the United Nations Industrial Development Organization (UNIDO) in Beirut. “It accounted for 8 percent of the industrial output of Lebanon, but we also noted that because of the crisis there were a large number of business closures and rising unemployment in this sector.” Because of the refugee crisis and the slowdown of the Lebanese economy, UNIDO saw the need to support the furniture manufacturing industry, Pasini says. The agency designed a program and began to train and equip furniture makers last year, receiving funding from the Japanese Embassy in Lebanon, with additional support from Lebanon’s Ministry of Industry and the Ministry of Education and Higher Education.

The collaborative effort focuses on furniture makers in north Lebanon, aiming to create more jobs, and to improve productivity and market access. The project originally scheduled 150 individuals for training, and planned to provide equipment to 8-10 micro or small- to medium-sized enterprises (MSMEs). According to the project scorecard, these initial numbers were exceeded due to demand, with 285 individuals and 15 MSMEs receiving assistance. “We have been very happy to see that while our targets were based on the initial needs, we saw such demand that we could increase our targets,” Pasini tells Executive. He adds that most beneficiaries were Lebanese nationals, though refugees also benefited. “There is a certain participation of Syrians reflected in the numbers. There were several training [programs] for Syrians based on a request by the Japanese Embassy, and we included Syrians also in the training program for carpentry, but the program is mainly directed at host communities.”

Increasing producers access to markets  is a key focus of UNIDO’s support, with the domestic market the target for entrepreneurs setting up new business ventures. Even so, these young businesses will inevitably experience difficulties as they build their client list, Pasini says. “For the new furniture producers, we are trying to keep them afloat by providing new tools and keeping them competitive, but we notice that they are serving mainly the local market and, in a best-case scenario, neighboring countries,” he explains. Even though the project is funded by Japan, that market is not within the reach of Lebanon’s furniture makers, because they cannot compete with larger-scale producers already present in Japan, the country’s ambassador to Lebanon, Matahiro Yamaguchi, tells Executive (see interview page 58).

This was not the first MSME empowerment project undertaken by UNIDO. Agroindustry was originally a focus of the host community-support  initiative, but it has also targeted, in addition to furniture, jewelry design, crafts such as embroidery, and other artisanal skills. Through its assistance programs, UNIDO has provided capacity building support to Jezzine’s cutlers, Saida’s soapers, and embroiderers using the tulle-bi-telli technique (a traditional metal thread embroidery found in parts of Asia, the Middle East, and Europe).

For these niche industries, including that of furniture making, the hope is that UNIDO interventions can help entrepreneurs upgrade their productivity and their product quality to compete in today’s difficult market environment.

Jeremy Arbid

Jeremy is Executive's in house energy and public policy analyst.

*

Top