Sanitary paper products...the occupation prevents them from entering Gaza markets...and the West Bank is flooded with imported goods

Hebron - Ofoq News report - Palestinian sanitary paper factories are facing increasing pressure, with the inability of their products to reach the Gaza Strip market, and the escalation of competition in the local market with imported goods, in addition to the rise in transportation and distribution costs, at a time when the purchasing power of consumers is declining and it is becoming increasingly difficult for factories to reach the Palestinian markets.

The testimonies of Maher Al-Haymouni, General Manager of Lady Fine, and Victor Hazboun, President of the Union of Paper and Packaging Industries, reveal a crisis that goes beyond the decline in sales to concerns related to the ability of Palestinian factories to continue and maintain their market share, in light of the imbalance in trade channels between the West Bank and the Gaza Strip, and demands for more effective measures to protect local production from unfair competition.

Gaza.. a closed market for Palestinian products

Al-Haymouni told our correspondent that his company was delivering its sanitary paper products to the Gaza Strip through international and relief institutions, including the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) and the Emirates Red Crescent, but this route stopped as the war continued. He added that the company is no longer able to supply its products to the sector through its previous channels.

The impact of this interruption is not limited to one company, according to the head of the Union of Paper and Packaging Industries, Victor Hazboun, who told Ma’an’s correspondent that preventing Palestinian products from arriving in Gaza has caused damage to factories operating in the West Bank, especially those that were relying on the Gaza market to dispose of part of their production.

Hazboun considered that depriving Palestinian merchants and factories of direct commercial dealings limits the freedom of contracts between Palestinians in the West Bank and Gaza, and gives Israeli companies a monopoly on the market.

He said that the reasons for preventing the entry of Palestinian products are not clear to him, wondering about the justifications for allowing the entry of goods through Israeli companies, in exchange for preventing the Palestinian product from reaching the consumer directly in Gaza.

According to Hazboun, these restrictions do not affect sales alone, but also extend to the opportunities for the continuation of Palestinian factories, warning that the continuation of the current conditions may push some factories in the West Bank to close, which will affect employment and unemployment.

75 factories destroyed in Gaza

The dimensions of the crisis become clearer when looking at the reality of the paper sector inside Gaza, as Hazboun said that the union includes 99 members registered in the sector, and that 75 factories were destroyed, while 24 factories remain operational, but they need raw materials, spare parts, and production requirements that they cannot obtain, due to the occupation’s ban, according to his testimony.

These numbers mean that the crisis is not only related to the disruption of trade between Gaza and the West Bank, but also to damage to the production base itself within the Strip.

The factories that used to produce, provide job opportunities, and serve the Palestinian consumer are now, according to what Hazboun presented, facing a double obstacle: the destruction of a large part of their facilities, and the inability to provide the necessary supplies to restart the facilities that are still operational.

On the other hand, factories operating in the West Bank are losing a consumer market that represented an outlet for distributing their products, which increases pressure on a sector that already suffers from competition in the local market and high operating and transportation costs.

Lady Fine lost 35% of its market share

In the West Bank, the loss of the Gaza market is compounded by distribution difficulties and declining purchasing power.

Al-Haymouni said, during his conversation with Ma’an’s correspondent, that his company lost about 35% of its share in the local market, in an indication of the extent of the pressures the company is facing. This percentage does not necessarily represent the size of the decline in the entire sector, but it provides a picture of the losses that one manufacturer says it has suffered during the recent period.

He pointed out that the economic and living conditions, the high costs of life, irregular salaries, and the loss of many workers’ job opportunities inside Israel are factors that have affected the Palestinian consumer’s ability to purchase.

He added that restrictions on roads and iron gates between Palestinian cities made the movement of delegates and drivers more difficult, and prolonged the time for delivering products to markets.

He explained that the arrival of shipments to cities such as Ramallah, Jenin, and Nablus now requires more time and effort, in light of the delays and risks faced by workers on the roads, which is reflected in the cost of distribution and the regularity of sales operations.

Al-Haimoni said that these conditions, in addition to competition with imported goods, made the Palestinian industry face an extremely difficult situation, considering that the crisis is no longer limited to sanitary paper, but rather includes other industrial sectors.

Shipping restrictions raise the cost

Among the problems raised by Al-Haymouni are the procedures related to the rise of shipments and containers through the Tarqumiya crossing.

He said that some companies were transporting their shipments at a height of up to two meters or two meters and twenty centimetres, before they were asked by the crossing administration from the Israeli side to adhere to a height not exceeding one meter and sixty centimetres.

He added that this change reduces the amount of goods that can be transported in one shipment, and leads to an increase in transportation costs, which raises the final cost to the factory.

He pointed out that his company contacted authorities in civil affairs and chambers of commerce in an effort to address the problem. However, at the time of preparing the report, no significant development had occurred.

These restrictions are particularly important for paper industries, which depend on transporting large quantities of products, as reducing the size of the load in a single shipment means the need for more trips to transport the same quantities, thus increasing operational expenses.

In the local market, Hazboun places the import issue at the heart of the crisis facing the paper industries, considering that the entry of imported goods at low prices increases the pressure on Palestinian factories.

He said that the Union discussed this issue with the National Anti-Dumping Team, and that the meeting was positive, but he pointed out that the main challenge lies in transforming decisions and recommendations into actionable measures on the ground.

He added that the union called for a re-evaluation of import mechanisms, pointing to what he described as the existence of import invoices that do not reflect the true value of the goods, which, according to him, leads to calculating prices lower than the actual cost of the imported products.

Hazboun stated that, according to his estimate, some paper products enter at prices that may reach half the actual cost of the goods, which creates unfair competition with Palestinian factories.

These statements by Hazboun highlight a basic demand of the Union, which is to tighten customs control and verify the declared values, in addition to taking evidence-based measures when dumping practices are proven.

Hazboun stressed that addressing the crisis does not fall on the Ministry of Finance alone, but rather requires coordination between the relevant authorities in industry, trade and customs, while providing executive tools to ensure the implementation of decisions.

Announcing a policy to protect the industry is not enough, according to the Union’s position, unless it is translated into effective import control and practical measures that achieve equal opportunities between the local product and imported goods.

The Israeli market...an outlet that does not replace the Palestinian market

In light of the shrinkage of the local market and the inability to reach Gaza, Al-Haymouni said that the continued sale of the company’s products to some merchants in the Israeli market represented an outlet that helped it continue working.

He pointed out that the company seeks to develop this path, at a time when he described the local market as almost halting its activity.

However, relying on alternative marketing channels does not eliminate, according to what the interview reveals, the basic problem represented by the difficulty of Palestinian products reaching their natural markets, the high cost of delivering goods, and the competition that factories face within the local market.

This reality raises questions about the ability of Palestinian factories to maintain their commercial identity and market share, if the current pressures continue without solutions related to export, distribution, and import regulation.

Do Gaza products have Palestinian trade names?

In the face of the destruction of factories in Gaza and the inability to restart some of them, Hazboun proposed the idea of ​​reproducing brands that were linked to Gaza factories in factories in the West Bank.

He said that factories in the West Bank are ready to reproduce products bearing trade names that were present in Gaza, allowing those trademarks to be preserved and their continued circulation in the Palestinian market, until the affected factories are able to restore their production capacity.

The idea is to revive brand names whose original factories have lost the ability to operate, by producing a temporary alternative within the West Bank, which helps to continue commercial activity and maintain the connection between the brand and the consumer.

Hazboun believes that this path can bring economic benefit to both the West Bank and Gaza, by keeping Palestinian products and brands present in the market, instead of them disappearing or being replaced by other brands.

However, the success of this proposal requires clear arrangements related to the ownership of trademarks and the approval of their owners, the nature of the contract between factories, quality assurance, and how to return production to the original factories in Gaza when they are able to operate again.

Industry under double pressure

The two testimonies reveal a multi-faceted crisis facing the Palestinian paper industries sector: destroyed factories in Gaza, inability to reach products between the two Palestinian markets, import pressures that the union describes as unfair, high transportation costs, and declining purchasing power.

While Al-Haimoni talks about his company losing 35% of its market share, Hazboun warns that the continuation of the current conditions may force some factories in the West Bank to close, with repercussions on job opportunities and local production capacity.

These data put the official authorities in front of interconnected issues: facilitating the access of Palestinian products to the markets, addressing the restrictions that raise transportation costs, and providing a path to restart workable factories in Gaza.

The issue is not only related to a factory's ability to sell its products, but rather to the future of a Palestinian production sector that needs a market it can access, fair competition rules, and capabilities to restore damaged factories, and preserve brands, employment, and industrial expertise.

In light of these challenges, the most important question remains: Will the official measures succeed in protecting the Palestinian paper industry’s ability to continue, or will the factories’ losses expand to transform from a decline in sales to a gradual loss of market share and production capacity?