Having shut down operations when the Israeli bombing campaign began on July 13, 2006, Abbas Safieddine had the disconcerting experience three days later of seeing the smoldering ruins of his plastics factory outside Sour broadcast on France 24. Despite sitting on an isolated plot of land, far from any military, or even another civilian, establishment, PlastiMed’s facility was destroyed entirely by several direct hits; for days the plastic-fueled fire raged, while the site continued to billow smoke for weeks.
“That Sunday [July 16] was when they started bombing [manufacturers]; that was the ‘industry day’ when they hit all the factories for some reason,” Safieddine said. Theories have abounded as to the rationale behind the targeting of independent, apolitical businesses, with some accusing Israel of attempting to wipe out regional competitors. But in the case of PlastiMed, which manufactures and supplies to “filling companies” intravenous pouches for medical use, no such competition exists, neither from Lebanon’s southern neighbor, nor from anywhere else in the Middle East and North Africa region.
Today, the company operates administratively out of an office in Beirut‘s southern suburbs, while its factory is being rebuilt on the original site (after an attempt to buy land in Mount Lebanon fell through). It plans to reopen, with “a soft start” in the first quarter of 2012. But the difficulties encountered to get to this point, exactly five years later, demonstrate the immense challenges that faced all businesses affected by the war and the cumbersome process of procuring assistance from the Lebanese government. Initially, indications were good that the company would receive support from the Ministry of Industry. In early August 2006, he was contacted by the ministry and by the Association of Lebanese Industrialists (ALI). “We had a few meetings with the minister at the time. They wanted acquisition of some data — anticipated losses, stuff like that,” he said. An appraisal of damage that excluded losses of stock came out to around $16 million, nearly four times the budget of the entire United Nations Industrial Development Organization relief program for affected industries and well beyond the means of Hezbollah’s cursory assistance for select businesses damaged in the war.
“At the time, the association, as well as industrialists in general, were really hopeful. But it didn’t take long for the optimism to fade as most assistance was coming up for residential apartments. There was no mention of commercial assistance. So after two or three months we started to realize that nothing was going to happen,” Safieddine said. “The government really pulled out of this. Their excuse at the time was that there wasn’t enough money to go around to residential areas, much less to commercial. Plus, their argument is that the government has never assisted in commercial or industrial losses due to civil unrest or war or whatever.” Eventually, Safieddine got word that a proposal was in the works to implement a loan program through Banque du Liban, Lebanon’s central bank, though he says the process of appraising his losses, negotiating the loan and signing off on it has taken until this year to finalize. As with all of the central bank loans addressing industrial damage from the 2006 war, the conditions stipulate that 20 percent of the money for rebuilding must be put up by the factory owner, meaning that PlastiMed had to provide $3.2 million.
“These are big losses,” said Safieddine. “If it’s $1,000 you make the decision immediately. But you’re talking millions of dollars. The bank is very strict in making you conform to the 20 [percent] deal.”
Even with the assistance (of which a total of $9.3 million will be forgiven), the company remains in a precarious position. Before the war, the operation was running 24 hours a day, with nearly 100 employees. When the factory finally reopens, the workforce will be at most 35 to 40 people, with as yet no intention of expanding. Repairing contracts with clients is one of the largest hurdles. When the factory was bombed, its entire supply was destroyed.
“We had two main customers here, and all of a sudden all their supplies were lost so they had to buy from Europe, because remember we have no competition regionally,” said Safieddine. “We had to assist our customers at least in a way to assure them that we have a warehouse somewhere in a neutral area of Beirut with a confirmed supply of their demand for six months or so. And we’re in the process of doing that.”
But regardless of these offerings to potential clients, building up a customer base is no small task.
“Our customers restart on an annual contract. So we sign off for the whole year,” he said. “If we miss, the customer has to wait another year. Then he may or may not sign with you. So in our case it takes time to acquire a customer. It’s difficult to lose a customer, but it’s hard to get one.”
But these are concerns for the future, when Safieddine and his staff can ditch their office in Ghobeiry and begin production once again.
“Our primary concern is to rebuild and launch,” he said. “After that, we’ll cross the other bridges when we get there.”