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1. Mediterranean overview...... p.5 Building EuroMed partnerships (FDI section), Amina Ziane Cherif (maps), Jeanne Lapujade (proofreading), Lauriane Ammouche 2. Market trends and opportunities...... p.7 This guide is designed as a Doing business toolkit for (Layout), ANIMA. 3. Foreign direct investments...... p.13 clusters, SMEs, or entrepreneurs interested in The author would like to warmly thank The 4. Key players...... p.15 developing business partnerships in the agri-food Investment Development Authority of Lebanon (Diana 5. Recent national policies...... p.19 sector in Lebanon. It provides an overview of the Menhem & Abbas Ramadan) and the Chamber of main opportunities available in the private sector, as Commerce, Industry and Agriculture of Zahlé and the 6. Selected programmes and initiatives...... p.21 well as concrete and useful data to those interested Bekaa (Said Gedeon & Gloria Hanna), for their 7. Major business events...... p.23 to go further (contacts, agenda of events, etc.). support and contributions.

References Disclaimer This publication has been produced with the support The Mediterranean Business Guide, focus on Agri- List of acronyms food in Lebanon has been prepared by ANIMA of the European Commission. The contents of this publication are the sole responsibility of ANIMA Investment Network under the EuroMed@Change . ANIMA-MIPO: Mediterranean Foreign Direct Investment Network and can under no circumstances Investments and Partnerships announcements Project, a Preparatory Action initiated by the be regarded as reflecting the views of the European Observatory implemented and managed by European Parliament and implemented by the Union”. ANIMA European Commission (DG Enterprise and Industry). Copyright . CDR: Council for Development and EuroMed@Change proposes new dynamics for SME © EuroMed@Change May 2013. No part of this Reconstruction and cluster internationalisation between Europe and 4 publication may be reproduced without express . EU: European Union targeted partner countries: Morocco, Tunisia, Egypt authorisation. All rights reserved. and Lebanon. It is managed by four organisations . FAO: Food and Agriculture Organization from across Europe (ANIMA Investment network as . FDI: Foreign Direct Investment Project leader, the European Business Innovation Centre Network, INNO AG and the Fondation Sophia . Ha: Hectare

Antipolis as partners) and it coordinates with more . IDAL: Investment Development Authority of than 45 associated regional business, finance and Lebanon innovation networks. . MED 10 countries: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Palestine,

Authors Tunisia, Turkey This Business Guide has been prepared and drafted by Manal Tabet, with contributions from Zoé Luçon . MoA: Ministry of Agriculture . MoET: Ministry of Economy and Trade . n.a.: not available © EuroMed@Change 2013 3

Mediterranean overview

An increased pressure which requires rapid The sector is characterised by a predominance of developments investments from multinational companies, mainly European. Attracted by the size of the markets but Agri-food is one of the most strategic sectors in the attached to their independence, the latter have so far Mediterranean. The region is indeed facing a steady favoured traditional projects, either through the rise in food needs as a direct consequence of the FDI and partnership announcements in agri-food in establishment of local production facilities (dairy rapid population growth and recent changes in the MED 10 countries (nb of projects, ANIMA-MIPO) products or biscuits in Algeria, Egypt, Tunisia and consumption patterns. If Turkey achieved a relative Nb. of investments Nb of partnerships Turkey for France’s Danone, fruits and vegetables in self-sufficiency, the deficit continues to widen in the 38 39 Tunisia for Spain’s SanLucar, vegetal oil or sugar in other countries of the region (respectively 55% and 34 40 Algeria, Egypt, Morocco and Turkey for Saudi Arabia’s 29 85% of food consumption was imported in 2011 in 27 Savola, etc.) or through the take-over or the 30 Egypt and Lebanon for example), increasing their 27 acquisition of a controlling stake in local businesses 20 dependence on volatile international markets. The (Turkish confectionery brands Balaban and Dogan, “Arab Spring” - which initially took the form of a 19 7 and leading Israeli firms Osem, Materna and Tivall for 7 6 7 social unrest caused by a dramatic raise in food prices 4 5 5 Swiss Nestlé, Tunisia’s producer of vegetal oil and 3 3 2 - has highlighted the urgency of improving food margarine Gias Ingredient for German Dr. Oetker, security as well as the necessity to achieve a more 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 etc.). integrated development of territories. However, the sector attracts more SMEs year after FDI project announcements in the agri-food sector by Stable investments trends year (+ 30% between 2010 and 2011) interested in MED country (total 2003-2012, ANIMA-MIPO) In light of the strong growth potential of the opportunities presented by business partnerships 84 Mediterranean markets, foreign direct investment (commercial and technological). Last but not least, (FDI) in agriculture and agro-industry has remained the recent entry of investment funds into the market 65 relatively stable to date. 2011 was however a record (TGP Capital, Investcorp, APAX Partners, Riverside, year, with major investments in Turkey (partial Global Emerging Markets, Actis, Capital trust) 40 acquisition of local brewer EFES by Britain’s SABMiller, highlights the strong potential for growth of the 30 27 takeover of local alcoholic beverage producer Mey sector. 21 Içki by TGP Capital) and large projects in Egypt 16 10 6 (Nestlé) and Morocco (Lesieur). 3 1

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SOME USEFUL LINKS MORE USEFUL LINKS

. Food Security in the Mediterranean: a major geostrategic . CIHEAM’s Analytical Notes issue (2010), IPEMED http://www.ciheam.org/index.php/en/observatory/stu http://www.ipemed.coop/en/publications-r17/les-notes- dy-and-monitoring/analytical-notes Major assets and promising value chains to ipemed-c48/food-security-in-the-mediterranean-a-major- . OECD-FAO Agricultural Outlook develop geostrategic-issue-a183.html http://www.oecd.org/site/oecd-faoagriculturaloutlook/ The Southern rim of the Mediterranean has important . Mediterra 2012: the Mediterranean diet for sustainable strengths to shine in the agri-food sector, to start regional development (2012), CIHEAM - Presses de . Mediterranean Investment Map: sectoral guidebook on public investment policies in the Mediterranean with its excellent culinary reputation, Lebanon, Sciences-Po http://www.ciheam.org/index.php/en/publications/medite (2010), ANIMA Investment Network Morocco and Syria in the lead. The MED countries are rra-2012 http://www.animaweb.org/uploads/bases/document/I gradually increasing the value added of their agri- . Mediterra 2010: Atlas of Mediterranean agriculture, food, nv_MedInvestmentMap_ENG_Light_V2.pdf food sectors by developing the processing industry fisheries and rural areas (2010), CIHEAM - Presses de . Med opportunities: 25 niches markets in need of and packaging for export development. The recent Sciences-Po investment (2009), ANIMA Investment Network creation of agro-clusters (Morocco, Tunisia), including http://www.ciheam.org/index.php/en/publications/atlas- http://www.animaweb.org/uploads/bases/document/I laboratories and R&D centres, can support the mediterra nv_25NicheOpportunities_ENWithCover_light_02- modernisation of production equipments and the . CIHEAM’s quarterly Watch Letters, devoted to major 2010.pdf issues in Mediterranean food and agriculture development of typical products (prickly pear, camel . Overview of the agro-food sector in the Euro- http://www.ciheam.org/index.php/en/publications/watch- milk, etc.). Finally, a number of niches with high Mediterranean region (2005), ANIMA Investment letters growth potential remain largely untapped. This is Network . CIHEAM’s Briefing Notes http://www.animaweb.org/uploads/bases/document/ notably the case of ingredients and processes http://www.ciheam.org/index.php/en/observatory/study- Agriculture_en.pdf constituting the Mediterranean diet (horticulture, and-monitoring/81-notes-dalerte vegetable oils, processed vegetables, dairy products, aromatic and medicinal plants, etc.), of pre-cooked meals or organic farming.

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Market trends and opportunities

LEBANON: KEY AGRICULTURE DATA

Cultivated land (source: Various)

Cultivable area 360,000 ha A tremendous diversity, a growing demand global recognition in terms of quality and refinement Cultivated area 270,000 ha Considering the size of the country, the quantity and linked to the international reputation of the Lebanese Bekaa Valley 42% variety of Lebanese agri-food products is impressive: cuisine, the country has several strong cards to play. Northern Lebanon 26% the climatic and geographic diversity of Lebanon have The country’s relatively high production costs Irrigated area 130,000 ha (salaries, energy, transport), counterbalanced by the granted the country different agro-ecosystems ranging Role in the economy (source: IDAL 2010, Eurostat 2009) quality of local resources and skills, suggest that the from semi-arid to humid. It therefore allows a large % of the GDP 4.7% country will find its most promising positioning as a number of resources to grow or flourish, from % of exports 4.2% temperate (grapes, fruits, cereals, etc.) to subtropical provider of high-end and upscale products for % of the workforce 6.2% Western (organic or out-of-season fruits, wine, nuts, crops (bananas, avocados, etc.). In a generally dry Production (source: IDAL 2010) processed food) as much as for Arab and GCC region, Lebanon also benefits from a relatively Total production value €1,3bn countries (chocolate, olive oil, juice, dairy products). favourable position in terms of water resources and Fruits 47% rainfall: 40 major streams cross the country and rain Agriculture and agro-industrial production in Lebanon Vegetables & other field crops 23% water reaches 661 mm on average per year. are based mainly on individual initiative under a liberal Livestock Products 11% The Lebanese market is expanding very fast: the and open economy. Little national regulation is Livestock 10% registered annual increase in agri-food products provided, although efforts have been made in the past Other 7% demand is ranging from 5% for agricultural products years to promote certification, boost exports and Exports (source: Lebanese customs 2012) enhance necessary infrastructures (irrigation, to 25-30% for bovine meat. Yet, the current local Main exported products (share) production is not able to meet the demand: in 2012, agricultural roads, etc.). Consequently, the sector is Fruits 60% Lebanon was importing almost 85% of its food composed of a high percentage of family-owned and Potatoes 19% consumption. The persistent dependence on imports small-scale establishments with a high concentration Main destinations (share) signals that the local market is far from being of market share among a limited number of players: GCC (mainly KSA) 49% saturated. the vast majority of local farming units possess less Arab countries (mainly Syria) 42% than 1 ha, while 84% of food companies employ less The increasing worldwide demand in agri-food Other 9% than 5 people. With an estimated 20-30% of the products also represents a major opportunity for Farms & Workforce (source: MoA ) population depending directly or indirectly on agri- exports of local products. Endowed with a strategic Number of farms (1999) 194,829 food, the development of the sector is of utmost location between Europe and the Gulf, a variety of Women worker share 40% importance for the country’s wealth and stability. food exports ranging from basic goods to finest food People living of agriculture (est.) 20-30% wine and spirits, a climate that opens potential markets for “out-of-season” fresh products, and a

*source ALOA, Presentation at the MOAN, 2010 « Organic agriculture represents on average 1% of worldwide cultivated lands, while in Lebanon it is only 1‰: this single figure illustrates the huge Reviving agriculture: a challenging opportunity horticultural crops for domestic consumption and export are also an attractive segment offering potential for growth this segment has in Lebanon » One third of Lebanon’s land is cultivable, the highest profitable margins. proportion of the Arab world. The geographic Mario Massoud, Biomass The organic market, though still a niche, has strong diversity, from the Bekaa Valley to the Uplands or the growth potential. Local demand exists as illustrated sea coast enables Lebanese farmers to grow a high are booming, and many foreign companies by the growing number of retailers and dedicated in- LEBANON: ORGANIC MARKET variety of products. The main agricultural productions attracted by the current reforms and planned shop organic corners in large supermarkets. Local of Lebanon are fruits (mainly citrus, apples, grapes projects,Farm distribution are today (332) entering theOrganic market certifications” initiatives are developing, such as the Community and bananas), followed by tubers and vegetables. Support Agriculture Project. led by the American Livestock has also been picking up in recent years, Liban- University in Beirut. By encouraging consumers to Cert; with a meat production which has doubled since In conversion Organic, 8% subscribe to a weekly basket of fresh products at a fix 756 ha, 32% 1991. The country is today self-sufficient in poultry. 1402 ha, price, the project guarantees a regular source of 59% Despite the country’s potential and the fact that revenue for farmers. However, the main driver of this Mixed, IMC Liban ; agriculture is the direct source of income for a large 223 ha, 92% growth would have to found in an increasing 9% range of the population (20-30% according to the international demand: the sector is witnessing a 10% Ministry of Agriculture), the sector still suffers from and 20% growth in Europe and the United States decades of war destructions, under-investment, and respectively, and the local production is not yet able low government support (the budget of the MoA to meet the demand. France, though the second represents less than 1% of the state expenditure). largest wine-producing country, still imports 30% of LEBANON: ORGANIC MARKET The government therefore adopted a strategic plan in its organic wine to meet its domestic demand. IMC Organic production (total 240 ha) 2010 for the revival of the sector, with several Liban, the leading local certification body, recorded a 700 financial incentives, supported by international 15% increase in organic certification in 2011, a donors, and new infrastructure projects managed by 600 promising sign indicating that the opportunity is being the CDR. 500 seized. Several projects and grants aimed at 400 Considering that the value per square meter is higher supporting organic production in Lebanon have been 300 in Lebanon than in many nearby countries, the implemented by local or international actors in the country can successfully position itself on up-scale 200 country since the mid 90s. Among others, three main fresh products. It is seeking to enlarge its “out-of- 100 season” production and to introduce new valuable private initiatives are of particular interest. Following a three-year project funded by USAID, the first 0 varieties of fruits such as kiwi, apple custard or Other Olives Vegetables Citrus Oilseeds Cereals Orne- Medicinal, truffles. High value fresh and processed Lebanese cooperative for organic products has been Fruits mental aromatics

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BIOMASS: A FRIENDLY SERVICE THAT TURNS created under the name of Biocoop Lubnan and its thanks to an increasing global demand, the availability INTO A LEADING INDUSTRY Campagnia brand. The cooperative gave access to the of raw products as well as well-trained labour. Major local and international market to around 160 farmers companies have established decades ago production When the Massoud Family spread in 61 villages. Unfortunately Biocoop Lubnan partnerships in the country, such as Heineken, General decided in 2007 to start a small organic egg production, to supply family and friends, they stopped its activities in 2011. Second, Souk el Mills, Unilever, PepsiCo or Coca Cola. But some other had no intention of setting up a business out of it. Six years Tayyeb, the first local farmers’ market with an organic high-end segments still offer very promising later they are managing Biomass, the undisputed Lebanese corner created in 2004, has become so popular that it opportunities, at both local and international level. organic food industry leader. With 60 employees, half a dozen suppliers in Europe and a network of 40 local farmers, has launched a spin-off restaurant and food festival. Beverage, Wine, spirits & vinegar are definitely Biomass is the main grower, producer and distributor of the Last but not least, the local organic product company one of them. With, by far, the largest share in local organic market. Biomass successfully developed its activities since its Lebanese exports (32.6%), the industry is propelled “We have been growing at a 3 digits number trend a year”, creation and managed to complete a strong forward by a thriving wine production. The states Mario Massoud, Commercial Director at Biomass, “with a strategy focused on both upgrading the quality investment partnership with French UNIBEL: the Lebanese wine is an export success: recognised at and diversifying the local production”. Biomass today French holding acquired in 2012 a strategic minority global level with several international prizes awarded supplies the market with fruits & vegetables, eggs, olive oil, stake in the Lebanese company to support the rapid at major wine fairs (Quebec’s Sélections Mondiales des poultry meat, grains & pulses, and has set up in 2011 growth of its activities. Vins; Bordeaux’ Vinalies Internationales, etc.), local one of the only two Middle Eastern organic dairy factory. To achieve their objectives, the company had also Agri-food, the country’s main industry brands are being more and more distributed in to develop the whole organic value-chain, from production, traditional wine-drinking countries (UK, France and the processing and packaging, raising awareness among Agro-industry is the largest sub-segment of Lebanon’s US in the lead). Over 50% of the local production is outsourcers on the specific need of the segment. industrial sector: It generates 32.2% of the industrial being exported, a percentage which can reach 90% for “Our market is both local and international: we are output and employs 20% of its workforce. The sector small wineries. The sector expanded very fast, from 4 supplying the Gulf market with typical Lebanese products shows good prospects: driven by an increasing local and out-of-season vegetables, and have recently broken into wineries in 1991, to 36 in 2012. The reputation of the consumption of manufactured products (+21% for the European market”, details Mario. “big three” (Château Ksara, Kefraya and Musar) do not instance for processed food between 2009 and 2010), This success has not escaped the attention of French shadow the quality of some other smaller productions, the sector has registered a 8.9% growth since 2007. UNIBEL, Holding company of Fromageries Bel the such as El Ixir, partially bought in 2012 by the famous Exports are also on the rise, growing at an average third global dairy leader in branded cheeses who has businessman Carlos Ghosn, or the Domaine des acquired 35.8% of Biomass in 2012 through a capital annual rate of 7% since 2008, and this, despite the Tourelles, which was awarded 8 international medals increase operation. “It was a perfect strategic match, we turmoil in Syria, the country’s main client for agri-food were looking to further develop our dairy industry, and they over the past five years. Acknowledging the growing products. were looking to diversify onto the organic segment”. potential of the Lebanese wine business, the Local investments are expanding, according to the Biomass has the ambition to become the regional organic government has formed in 2012, an inter-ministerial product leader and to extend its markets and possibly its Investment Development Authority of Lebanon (IDAL), “Wine Council”, in charge of establishing the long production facilities to other neighbouring countries.

awaited Institute of Vine & Wine to regulate wineries’ the Middle East was expected to grow by respectively operations, grape cultivation and to orchestrate 20% and 30% between 2010 and 2015. Thanks to a promotion campaigns. specific local roasting technique, Lebanese nuts LEBANON: KEY AGRO-INDUSTRY DATA have gained recognition on the international market Although not as well established as wine, the beer Share in the economy (source: IDAL 2010) for their freshness and high quality, although most of industry is developing. The local per capita % of the GDP 3% the raw material itself is grown abroad. Hamasni, consumption is estimated at 4-5 litres, and the % of exports 8.7% founded in 1880, is Lebanon’s oldest nut company, production reached 8.7 billion bottles in 2011. The % of the workforce 3% and has been a training ground for most of the major sector is dominated by long-standing Almaza brewery % of industrial output 32.2% local businesses. Al Rifai’s success story is also a (Almaza, Laziza & Amstel brands), in which Heineken % of industrial workforce 24.9% (20,607 p.) good indication of the sector potential: the company, took a majority stake (79%) in 2002. A small brewery % of industrial companies 18.2% (736 units) which achieved of 50% turnover increase in 2011, entered the market in 2006 to break up the Production structure (source: SILF2009; IDAL 2012) company’s’ quasi-monopoly, with a “961”- branded exports 50% of its production, has branches in most Nb of units 4700 beer, which revealed itself a success, with foreseen GCC countries, Jordan and UK, and was partially Nb of units (more than 4 employees) 716 acquired by Qatar First Investment Bank in exports to the United States. Production (source: IDAL 2010) September 2012 to support the extension of its Olive oil exports are also expanding, despite a tough Total production value €2.25bn production and its access to new markets. Lebanese regional competition from countries almost Dairy Products 67.9% chocolate has also managed to earn regional exclusively turned towards the international market. Bakery Products 30.2% recognition to the extent that countries such as Saudi Olivetrade, an organic olive products brand has, for Geographical concentration Arabia, Jordan or Egypt heavily consume Lebanese Mount Lebanon 34% instance, managed to tap international markets such products - despite their relatively high prices and Bekaa 30% as France, United Kingdom, Kuwait, Canada or upscale positioning. Patchi’s worldwide success (145 North Lebanon 14% Japan. Several projects aiming to sustain the industry outlets in 29 countries) indeed gave the industry a South Lebanon 10% and raise the quality of its products are currently push by increasing its popularity: the company which Other (Beirut & Nabatiyeh) 8% & 4% being implemented through bilateral cooperation: invested in factories in Lebanon but also in Saudi Exports (source: Lebanese customs 2012) Spain is supporting producers in the South, while Arabia or Egypt is currently studying the opportunity Main exported products (share) Italy is helping establishing a national certification of going public, either on London or Dubai stock Beverages, Spirits & Vinegar 32.2% laboratory specifically dedicated to olive oil. exchange. Other brands, such as Souchet, Ethel or Fruits, Vegetables & Nuts 17.7% Nuts and Confectionery production is another Dandy also successfully serve the regional and Main destinations (share) Arab countries 42% promising market. According to Euro-monitor international market. International, confectionery and nuts consumption in GCC 24.2 % Western Europe 6.6%

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INNOVATIVE HYDROPONIC SUNLESS FARMS

Food poisoning can have unexpectedly powerful effects Investment opportunities in irrigation when a serial entrepreneur is directly affected. Determined According to the CDR, agriculture consumes 64% of to grow cleaner products for his own consumption after the available water resources. The growing water having faced one of these quite common misadventures, Roy Debbas has ended up developing a new technology demand in the coming years will require a number of for the production of organic fruits, vegetables and infrastructure investments, such as the construction herbs under a fully controlled climate environment. of water storage facilities, dams and lakes, or the Eco Industries is indeed a pioneer in hydroponic farming, rehabilitation and modernisation of surface and Up-coming infrastructure projects in Agriculture & with the introduction of full environment control through ground water facilities. Rationalising and regulating irrigation (Source: CDR Progress report, Oct 2012) artificial lighting. “Hydroponic farming has tremendous advantages, especially in countries facing extreme water consumption is also high on the agenda. A weather or water and agricultural land scarcity: it government led pilot project has indeed highlighted allows a continuous all-year supply of fresh products, with that the implementation of water-efficient agricultural limited water and land use. However current systems used technologies would enable to save up to 50% of the in warehouses do not totally address the problems linked to climate changes and, in our region, to strong sunshine” current consumption. The local market is still explains Roy Debbas, its founder. By creating a totally untapped and a number of projects are planned by isolated environment (production can even be done the CDR, such as the construction of small- and underground), Eco Industries can guarantee a 100% organic and pesticide-free products as well as a crop medium-size lakes in hilly areas (extension of an growth increased by 30% comparing to other IFAD-EU project), the rehabilitation of agricultural hydroponic cultivation. Space saving is also a major asset as roads (tender under preparation) or the continuation “the production of 2,000 lettuce a day only requires 100 sqm comparing to 6,000 sqm in traditional agriculture”. of canal 800 project (tenders yet to come). Two years of researches in laboratory have been necessary to build the pilot “Hub”, designed to look like an eco-friendly chalet and grow the first batch of vegetables, which were

well received by Lebanese consumers. Eco Industries is now starting to market its technology and already signed partnerships with two major companies from the Gulf. “Our expansion strategy relies on JV agreements, under which we bring the technology, manage the production and grant the product with our brand name” details Roy.

As a next phase Eco Industries is planning to supply its hubs with renewable energy installations, a necessary step to expand in markets with higher energy production costs.

Foreign Direct Investments

A boom in niche agri-food markets in 2012 A domestic market offering opportunities for 2012 has been a record year for foreign investment in foreign producers and retailers the agri-food sector in Lebanon: while only 1 FDI Lebanon imports a great diversity of food products, project was detected by the ANIMA-MIPO which represent more than three quarters of its food Observatory between 2003 and 2011, no less than 5 consumption. According to the Lebanese Customs foreign investors declared investment plans in 2012. and Lebanese Ministry of Economy and Trade, the top Lebanon: FDI and partnership projects announce- All 5 projects were announced in sectors of 10 products imported in 2009 were live bovine ments in the agri-food sector (ANIMA-MIPO) highvalue-added: confectionery, organic dairy animals, cheese, meat, wheat, sugar, maize, food Invested amounts (€m) Number of FDI projects products and wine. preparations, milk powder, sheep and coffee. Number of partnerships 10 6 3 projects were led by Qatar First Investment Bank: Several commercial partnerships and distribution 5 the group acquired a 35% stake in Al Rifai, a famous agreements have hence been detected by the ANIMA 8 nuts and speciality sweet company, enabling it to 4 MIPO Observatory, especially in the field of high-end 6 invest in a coffee factory in Mkalles and 2 new stores and quality food items. Among the most recent deals, 3 in Baabda and Naccache. Another FDI project was 4 Produit en Bretagne, a French business network 2 announced by French company Bel, a global leader in promoting made in Brittany products, inked a deal 2 1 processed cheese, and the number one cheese with local supermarket chain Bou Khalil to sell its spread producer in France and the rest of Europe. products in Lebanon. The world leader in coffee 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 The manufacturer bought 35.8% of Biomass, a local machines and coffee maker technology Nespresso company established in 2009 which launched an also opened two stores in the country over the past Lebanon: Main investors in the agri-food sector (in organic dairy factory in Qab Elias in 2011. Finally, the years through its exclusive distributor in Lebanon number of FDI projects, ANIMA-MIPO) 4 French Lebanese Brazilian Chairman and CEO of since 2000, the local company Dima. Renault-Nissan, Carlos Ghosn, invested in Ixsir, a winery established at the end of 2008 and which 3 released its first wine in 2011 in Basbina, a mountainous area above Batroun, North Lebanon. 2 The company aims at producing quality wine from six 3 different hilly vineyards in Jezzine, Niha, Kib Elias, 1 Deir El Ahmar, Ainata and Batroun. 1 1 1 0 Qatar Syria Brazil France

FDI announcements in the agri-food sector in Lebanon (2003-2012, ANIMA-MIPO) Investor Origin Date Type Project JV, partial Tabourian Syria 2005 acquisition The firm buys Sannine Mineral Water for 11.5 million USD

JV, partial The businessman, current CEO of Renault-Nissan, to invest in Lebanese Carlos Ghosn Brazil 2012 acquisition winery El Ixir as a sleeping partner Qatar First Investment Al Rifai, the nuts manufacturer partially-owned by the bank (35%), to Lebanon: FDI and partnership announcements in the Bank Qatar 2012 Greenfield open a coffee factory in Mkalles and two retail outlets agri-food sector (2003-2013, Source ANIMA-MIPO) Qatar First Investment JV, partial The investment bank to increase from 15 to 35% its stake in the Bank Qatar 2012 acquisition Lebanese nut producer Al Rifaï in order to support its high growth The cheese maker to acquire 35.8% of Biomass, a company JV, partial established in 2009 and producing organic fruits, vegetables, dairy Bel France 2012 acquisition products and grains Qatar First Investment JV, partial The investment bank to acquire 15% of the Lebanese nut producer Al Bank Qatar 2012 acquisition Rifaï International

Selected partnership announcements in agri-food r in Lebanon (2003-2012, ANIMA-MIPO) Investor Origin Date Type Project Commercial Creation of a joint-venture with the Zeidan group to commercialise cigars Habanos Cuba 2005 partnership in Europe, Asia and Middle East Commercial Creation of a joint-venture to commercialise its products which local Arla Foods Denmark 2005 partnership production will be multiplied by 2 over the next 5 years Switzerlan Franchise, Nespresso, the group's famous coffee brand, to open a first boutique in Nestlé d 2008 shop, the Dbayé ABC mall in Beirut thanks to its local exclusive distributor Dima Compagnie Joel Robuchon's group to open its first Lebanese wine cellar in the new Française de Franchise, Souks of Beirut through a franchise agreement with the local Fawaz Restauration France 2010 shop, etc. Holding Switzerlan Franchise, The coffee brand of the group, Nespresso, to open a second boutique in Nestlé d 2011 shop, etc. Beirut with the support of its exclusive distributor Dima Produit en Produit en The Breton product brand to ink an agreement with local supermarket Bretagne France 2012 Bretagne chain Bou Khali to sell its products in Lebanon

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Key players

Regulation sub-segments of the agri-food sector (organic Innovation players products, olive, poultry, spirits, frozen meat, etc.). Regulation related to agri-food in Lebanon is shared A number of centres are leading researches related to However, most of these associations do not have between four ministries. The Ministry of organic production, biotechnologies and other regular activities or extended visibility. Nevertheless, Agriculture (MoA) is responsible for implementing agriculture related projects. The Lebanese some active organisations are making attempts to national strategies related to agriculture policies. It is Agricultural Research Institute is also conducting gain an international outreach: it is the case of the represented at local level by regional centres and researches in several fields, through 8 experimental Syndicate of Lebanese Food Industries (SLFI), which offices. The Ministry of Water and Energy (MEW), stations spread across the territory. In terms of closely coordinates with IDAL’s AgriMAP programme is involved in defining Lebanon water strategy, and innovation support, a project to establish an Agripole to attend international fair or of the Union Viticole du consequently irrigation systems and projects. Agro- in the Bekaa and support the incubation and growth Liban (UVL) who launched in website to promote industry is placed under the responsibility of the of agri-food SMEs has been announced, and then put Lebanese wine at international level. Ministry of Industry, while export and import on hold. It is not excluded that it might be brought regulation (including issues related to certification of Certification back onto the agenda in the coming years. agri-food products) is managed by the Ministry of LIBNOR is the agency in charge of national standards. Training Economy and Trade (MoET). As quality standards in Lebanon are still applied on Lebanon can count on 8 agricultural schools, which voluntary basis, most importers or organic food Federation and professional associations provide the sector with qualified workforce. The producers have to request certification from public or Lebanon’s Chambers of Commerce and Industry are country’s first agri-food vocational school, located in private certification bodies. Among them, LibanCert, a also covering agriculture. They in fact gather the the Bekaa (Qab Elias), has in addition opened its certification body supported by Swiss cooperation and large majority of agro-industrial companies as doors to 1,000 students in 2013: supported by a €5m IMC, an Italian body with a local subsidiary hold the registration is compulsory to be granted a distribution grant from the EU, it will be supplied with advanced lion’s share in the field of organic production. licence. With dedicated departments, experts, and laboratories and up-to-date food processing LibanCert has been the first Lebanese organic laboratories, the Chambers are active in providing equipments. inspection and certification body to be recognised in support to professionals (training, accreditation, R&D 2011 by the European Union (List of Organic facilities) and interacting with government-related inspection and certification bodies operating in third institutions on governance issues (laws, regulations, countries), while IMC’s certification, thanks to new etc.). The federation of CCIAs has also set up an global agreement between IMC Bari and a number of agricultural committee to ensure national other national certification bodies is recognised in an coordination. increasing number of countries. A number of specialised associations have also been created to gather professionals from very specific

Government & Governmental bodies Ministry of Agriculture (MoA) The MoA is in charge of setting up and enforcing agricultural policies and strategies. It is represented by www.agriculture.gov.lb regional centres and offices in each region. Ministry of Industry (MoI) The MoI is in charge of setting up and enforcing the country’s industrial policies and strategies, including www.industry.gov.lb those targeting the agro-industrial sector. Ministry of Economy & Trade The MoET is in charge of enforcing the various laws and plays a critical role in import/export regulation. www.economy.gov.lb (MoET) Council for Development and The CDR is in charge of planning the country’s economic infrastructure. It is involved in agriculture and www.cdr.gov.lb Reconstruction (CDR) water infrastructure. Several tenders were launched in the past years, and others are to come (irrigation, agricultural roads, dam construction, etc.). Investment Development IDAL is Lebanon’s investment promotion agency, acting as a one-stop-shop for investors and providing www.idal.com.lb Authority of Lebanon (IDAL) incentives for the development of key sectors, including agriculture and agri-food. It also manages the Agri PLus and AgroMAP programmes to support agri-food exports. Lebanese Observatory for LOAD, a structure linked to the Ministry of Agriculture, compiles Information related to the agricultural and www.loadleb.org Agricultural Development rural sector. It supports the formulation, follow-up, monitoring and evaluation of agricultural development (L.O.A.D) programs and projects. Standards Institution (LIBNOR) LIBNOR is the authority issuing, publishing and amending national standards. www.libnor.org Main Business Federations & Associations Chambers of Commerce, Industry Four regional Chambers cover the Lebanese territory: the CCIAs of Beirut & Mount Lebanon, Zahlé & Bekaa, www.ccib.org.lb and Agriculture (CCIAs) Tripoli & Northern Lebanon, Saida & South Lebanon. Each Chamber has its own agricultural department, www.cciaz.org.lb constituted of full time specialized experts or engineers. It provides services to agricultural stakeholders, www.cciat.org.lb mainly technical advice on production and marketing issues, preparation of bankable files, market access www.ccias.org.lb requirements and quality norms, contact details of importers and exporters of agricultural products. Agriculture Committee of CCI’s' Composed of the presidents, experts and members of the regional CCIAs, the federation’s committee ensure www.cci-fed.org.lb Federation the coordination between regional CCIAs on national agricultural issues. It conducts promotional campaigns, trainings on key issues and takes part in the implementation of national projects. Association of Lebanese ALI is the main national association of manufacturing companies. www.ali.org.lb Industrialists Syndicate of Lebanese Food SLFI brings together 156 Lebanese agri-food industrialists. Its main missions are to strengthen the industry, www.slfi.org.lb Industries (SLFI) raise production standards, establish cooperatives and execute projects in cooperation with local and international institutions. Syndicate of Agri-food Traders in The Syndicate gathers the major commodity traders in Lebanon. It has as a mission to liaise between agri- www.agrifood.org.lb Lebanon food traders and to improve information and regulations. Union Viticole du Liban (UVL) The UVL was founded after Lebanon joined the Office International de la Vigne et du vin (OIV). The www.winesfromlebanon.co.uk objective of the UVL is to consolidate and build on Lebanon’s image as a wine producing country.

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A number of professional associations targeting specific sub-segments have been created such as: the Bekaa Farmers' Syndicate, the Syndicate of Food Importers, the Syndicate of Poultry and Meat Traders, the Other Lebanese sectoral syndicates Syndicate of Poultry Producers , Tthe Syndicate of inter-professional Lebanese olive oil producers (SILO), Tthe Syndicate of Exporters & Importers of Frozen Meat, Fish & Vegetables in Lebanon, the Syndicate of Spirits and Wine producers, the Syndicate of Importers of Foodstuff, consumers products and drinks, or the Association for Lebanese Organic Agriculture. Innovation players (incubators, research centres, etc.) LARI (government organisation under the Minister of Agriculture) conducts applied and basic scientific www.lari.gov.lb Agricultural Research Institute research for the development of agricultural in Lebanon with eight experimental stations. LARI’s current (LARI) cooperative research projects include 1) Olive propagation 2) Cereal and grain legume development 3) Pasture and fodder 4) Barley development programme 5) Male sterile insect technology for biological control. IRI is the national institution in charge of industrial research and scientific testing. It investigates and http://www.iri.org.lb Industrial Research Institute (IRI) disseminates information about available raw materials, provides testing and analysis services, grant certificates. It also operates 11 laboratories, including a laboratory for grain, flour and bread research. American University of Beirut – The AUB is managing 2 research centres in the field of agriculture: the Agricultural Research and Education www.aub.edu.lb/fafs Faculty of Agricultural and Food Center (AREC) and the Environmental and Sustainable Development Unit (ESDU), with on-going research Sciences (AUB–FAFS) projects on crop selection, conservation and improvement, integrated pest management, food safety, etc. Berytech is the first technological pole in Lebanon. It promotes the creation and development of new start- Berytech ups and the growth of existing high potential businesses through incubation, business support, counselling www.berytech.org and company hosting in a dynamic and vibrant environment. South Business Innovation Centre SouthBIC is a business development centre established in South Lebanon. It offers incubation services to www.southbic.org (SouthBIC) start-ups and SMEs as well as exhibition facilities. Business Incubator Center – Tripoli BIAT is business development centre, established in North Lebanon, which offers incubation, training and www.biatcenter.org (BIAT) support services for SMEs. Other SME support organisations Euro-Lebanese Centre for Industrial ELCIM offers services and activities to support SME development, including issues related to quality www.elcim-lb.org Modernisation (ELCIM) management and certification. Kafalat is a financial company with a public concern that assists SMEs to access commercial bank funding, by www.kafalat.com.lb Kafalat providing loan guarantees. It manages the CARD scheme, specifically dedicated to agricultural SMEs. Useful directories ( private companies) Certification bodies in Lebanon: www.standards.org/certification_bodies/country/category/lebanon Lebanese olive oil companies www.lebaneseoliveoil.com/IndustryContacts.htm SLFI members’ directory www.slfi.org.lb/members.asp Agro services Companies www.lebweb.com/dir/lebanon-agriculture IDAL’s list of Lebanese agricultural www.idal.com.lb/en/sectors_in_focus/agriculture exporters

Recent national policies

AGRI-FOOD FINANCIAL INCENTIVES Cereal & vegetable fund, fodder fund, Production natural disaster fund (planned) The 2010-2014 Plan and funding schemes credit guarantee fund for SMEs, to increase the Access to Negotiated interest rates, Kafalat CARD Agriculture in Lebanon has greatly suffered from war percentage of guarantee it offers to farmers. finance scheme (for agriculture and tree farming) destructions and years of low investments. The Supported by an €3.5m EU donation, the CARD IDAL’s IPZ (Investment Project per Zone) Investment budget of the Ministry of Agriculture has for a long Scheme can now offer either small short-term loan and PDC (Package Deal Contract) schemes guarantees up to € 27,000 (Kafalat small agriculture) Agri Plus programme, AgroMAP programme, time accounted for less than 1% of the State Export Expenditure, leading to vulnerable social conditions or longer-term loan guarantees with extended grace custom duty incentives and increased trade deficit. To address the issue, the period for tree farming (Kafalat trees agriculture) at Ministry of Agriculture has launched in 2010, with the an interest rate of 2% subsidised by the Central Bank. financial support of international donors, a strategic The scheme is expected to benefit to 800 farmers in “Agri Plus has helped our company expand plan for the revival of the sector. The ministry’s the coming two years, and to 15 000 in the next 10 its export to farther countries that we were budget was doubled, 200 staffs were hired and 28 years. not able to reach alone. Also, it led us to agricultural centres established across the country. Last but not least, the MoA has launched in 2011, in upgrade our post harvest processes and The plan also includes various funding scheme to partnership with IDAL, the Agri PLus programme, an invest in ISO 22000 and Global Gap. It support production, access to finance and export annual €15m export subsidy fund. Agri PLus therefore generated significant opportunities. replaces and extends the former Export Plus improvements in traceability and A production support funding scheme was programme, with the objective of opening new structuring of our fresh product business.” launched with a €10m budget by the MoA in 2010 to markets for Lebanese products: its targets, mainly Sleiman Menassa, increase cereal and vegetable production. In 2012, vegetable and fruit products, today include other General Manager, Debbane Freres another more important fund (€94m over 5 years) selected products such as olive oil, honey and has been set up to encourage fodder farming, with seedling. Besides subsidies, Agri PLus encourages objective of lowering livestock production costs and exporters to attend international exhibitions and to « The solar loan made a real differencedifference for up-scaling the quality of dairy products. A disaster improve quality, packaging and cooling standards. FURTHER READING Kypros anandd the SWH market in general. We fund was also on the way in 2012 to provide The programme has contributed to increasing . Agriculture Fact Book, 2012, IDAL managed to multiply our turnover by three compensation to farmers suffering from losses caused agricultural exports by 8% in 2012, despite the Syrian . Agriculture Investment Incentives, 2013, IDAL crisis. the year it was launched » by natural disasters. . Agrofood Fact Book, 2012, IDAL Samar Akar Maalouf, Kypros The Ministry negotiated advantageous loan conditions Investments incentives for agri-food . Agrofood Investment Incentives, 2013, IDAL (5% interest) with several banks to facilitate Agriculture and agro-industry are among the priority . AgriPlus Programme : annual report 2012, 2012, IDAL farmers’ access to finance. The newly launched sectors of IDAL, the national investment promotion . Agricultural Infrastructure Progress report, 2012, CDR (2013) CARD Scheme also allows Kafalat, the local agency, together with tourism, ICT and industry.

IDAL offers incentives to investors in the agri-food . Machinery equipment, spare parts and building sector, which vary according to the region. It includes material are subject to only 2% fees for setting up income tax and project dividend tax reduction for up new facilities. to 10 years, 100% exemption from land registration Unlike some other countries in the region, labelling on fees and 50% reduction on work and construction agri-food products do not have to be in Arabic and permits. Several other incentives are in addition there are no restrictions on imports of alcoholic provided by other entities, such as custom duty beverage or other non-halal products reductions on selected products. More generally, Lebanese farms are exempted from income tax, wages Certification, a work in progress CCIA FOOD QUALITY CENTRES on agricultural labour from payroll taxes and all Quality standards in Lebanon are still applied on Lebanon’s Chambers of Commerce, Industry and Agriculture agricultural products from VAT. voluntary basis, although food safety is high on the have established, with the support of USAID, Food Quality government’s agenda: the MoA has indeed recently Centres to provide farmers and agro-industrialists with Trade regulations and incentives embarked, together with the FAO and the EU (Qualeb support in R&D and quality monitoring. Lebanese, although still in the process of accession to III programme), on updating the legal and regulatory The CCIA of Zahlé and the Bekaa, covering the highest WTO, has signed several bilateral free trade framework to comply with international requirements proportion of Lebanon’s cultivated land, is one of them: its food laboratory and pilot plant provide testing support for agreements (EU Association Agreement, EFTA, GAFTA, for food production, distribution, import, export and various food and agriculture industries, including microbiology etc.). In general, prices on imported goods are subject seed use. It is also striving to control pesticide use, as researches and ISO certifications. to custom fees and a 10% VAT rate. However specific it announced in late 2012 that it was offering, as a incentives are applied to encourage agri-food trade: «We have been supporting in the past years some 50 pilot programme, free test on chemical residues and companies in their R&D process » says Gloria Hanna, . Tariffs on agri-food items not available in Lebanon health certificates for exporters. Besides, the Syndicate responsible for the Centre’s pilot plant. The latest one, a (raw material, semi-finished products, etc.) have of Food Industries has signed in early 2013 a mushroom grower looking for other prospects than his usual fresh vegetable clients, developed with the centre’s been either abolished or vary from 5 to 20%; cooperation protocol with MoET to support, train, and experts and equipment a new packing and . Equipment and raw material imported for the qualify 20 foodstuff manufacturers to earn the quality conservation technique (in jars), and is now setting-up his management system certificate ISO 22000. own production facility. “We supported him in developing the agricultural sector are subject to a 2% custom idea as well as the process and we provided him with duty only; samples he could test on the market. The product was very . Agro-industrial companies benefit from a 50% tax well received in Lebanon and the Gulf, so he decided to go on investing” specifies Gloria. The centre is now working on on tariff duties at export; testing an organic apple chips product. The centre, which employs 5 full time experts, also collaborates with university students on R&D subjects.

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Selected on-going programmes & initiatives

Lebanon Industry Value Chain Development (LIVCD) Credit for Agricultural and Rural Development (CARD Scheme) Period: 2013-2018 Period: 2013-on-going Budget: €27.2m Budget: €3.5m Funding: USAID Funding: European Union

Target/Opportunities: Technical assistance and training inance

f Target/Opportunities: Access to finance for SMEs Lead executing agency: Development Alternatives Lead executing agency: Kafalat Objectives: Provide technical assistance and related resources, such as Objectives: Offer small short-term loan guarantees up to 35,000 USD (Kafalat technical equipment, grants and loans for value chain financing, in order small agriculture) and longer-term loan guarantees with extended grace period for

ccess to ccess to increase the competitiveness of selected value chains, to expand the tree farming (Kafalat trees agriculture) at an interest rate of 2% subsidised by the A number of SMEs that can compete in selected markets and to increase the Central Bank. gross value of products and services in local and export markets. Information: www.kafalat.com.lb Information: www.dai.com

Hilly Areas Sustainable Agricultural Development (HASAD) Agriculture and Rural Development Programme (ARDP) Period: 2009-2015 Period: 2011-2015 Budget: €28m Budget €14m Funding: IFAD, OFID, Spanish Trust Fund, Lebanese Government Funding: European Union Lead executing agency: Ministry of Agriculture Target/Opportunities: Technical assistance & market opportunities Target/Opportunities: Market opportunities and contracts Lead executing agency: Ministry of agriculture (MoA) Objectives: Improve agricultural productivity in hilly areas by Objectives: Enhance the performance of Lebanese agriculture by improving four constructing small and medium size harvesting infrastructure (hilly lakes, main components : guidance , infrastructure (Contribution to the IFAD project for reservoirs, terracing, stone retaining walls, irrigation networks) and the construction of medium-sized lakes, support irrigation networks, of forest Market opportunities Market provide technical support to farmers (production, quality control, nurseries), access to finance (CARD Scheme), and additional equipment to the marketing). ministry Information: www.ifad.org Information: www.agriculture.gov.lb

Developing Horticulture to Access Impactful Markets & F2F project Wataneh Period: 2010-2015 Period: on-going Budget: €22,5m Budget: n.a. Funding: USAID Funding: various Target/Opportunities: Technical assistance and training Target/Opportunities: Technical assistance and training Lead executing agency: ACDI/VOCA Lead executing agency: Arcenciel Objectives: Support horticultural production, by strengthening the Objectives: Offer solutions for farmers and food processors through technical capacity of Lebanon’s agricultural value chain actors, increasing upgrading of farming systems, extension services, machinery services, access to markets and market information, and introducing cost-efficient training sessions, quality control, laboratory tests, tasting panels. A technology. A component of the F2F project is dedicated to enhancing the distribution network has also been set-up.

competitiveness of the small ruminant livestock industry. Information: www.wataneh.org Technical assistance & training Technical& assistance Information: www.acdivoca.org .

LACTIMED – Promoting Mediterranean Dairy Products L’OLIO DEL LIBANO Period: 2012-2015 Period: 2009-2013 Budget: €4.8m Budget: € 3,3 m Funding: European Union / other Funding: Italian Ministry of Foreign Affairs Target/Opportunities: Technical assistance, training, networking, BtoB Target/Opportunities: Technical assistance and training Lead executing agency: ANIMA and 11 partners (including CCIAZ) Lead executing agency: CIHEAM-IAMB, MoA Objectives: Foster the production and distribution of typical and innovative Objectives: Support olive growers in increasing the quantity and improving dairy products in the Mediterranean by organising local value chains, the quality of olives and olive oil, provide solutions toenvironmental supporting producers in their development projects and creating new problems caused by olive oil mills by-products, support agricultural markets for their products. cooperatives and assist in marketing and promotion of the olive oil industry.

Information: www.lactimed.eu Information: www.oliolibano.net Technical assistance & training Technical& assistance

Major business events

HORECA THE GARDEN SHOW

Sector: Hospitaliy, Food and Beverage Industry Sector: Gardening & farming

Number of editions: 20 editions (since 1994) Number of editions: 10 editions Organiser: Hospitality Services Organiser: Hospitality Services

vents Type: Conferences, competitions and Exhibition Type: Conference and Exhibition Services: HORECA is the largest exhibition for the hospitality industry in Services: Event featuring garden display, landscaping, plants and flowers, gardening Lebanon and the Middle East. Established in 1994, it is the annual tools and accessories, outdoor furniture and equipment, garden decoration, traditional business-meeting place for the hospitality & food service industries. food product market, handicrafts, ecotourism. 2012 participation*: 12,000 participants from 11 countries and over Expected 2013 participation*: 250 exhibitors and gathering visitors from Lebanon, Lebanese e Lebanese 380 national and international exhibitors. Syria, Jordan, and other countries. Next event: 9-12 April 2013, Beirut (BIEL) Next event: 28 May-1st June 2013, Beirut (Beirut Hippodrome)

Information: www.horecashow.com Information: the-gardenshow.com/

ANUGA (Cologne, Germany) SIAL (Paris, France) GULFOOD(Dubai, UAE)

Sector: Food & retail Sector: Food Sector: Food Frequency: Every two years Frequency: Every two years Frequency: Annual Organiser: Koelnmesse GmbH Organiser: COMEXPOSIUM, SOPEXA Organiser: Dubai World Trade Centre Focus: Anuga is among the largest world food fair Focus: SIAL is among the world’s largest food Focus: Gulfood is a major regional trade show including for retail trade and food service and exhibition, with several dedicated sections, competitions for the exporter seeking new markets in the catering. and parallel events. Middle East, Africa and South Asia. 2011 participation*: 155,000 trade visitors from 2012 participation*: 150,258 visitors from 200 2012 participation*: 4,200 exhibitors (65 180 countries countries (21 exhibitors from Lebanon) exhibitors from Lebanon)

Foreign events with with events Foreign Next event: 5-9 October 2013 Next event: 9-23 October 2014 Next event: 23- 27 February 2014

Lebanese representations Lebanese Information: www.anuga.com Information: www.sialparis.com Information: www.gulfood.com

*organisers’ data

This guide is a Doing business toolkit dedicated to clusters, SMEs, or entrepreneurs interested in developing business partnerships in the Agri-food sector in Lebanon. It provides an overview of the main opportunities available for the private sector, as well as concrete and useful data to those interested to go further.

It has been prepared by ANIMA Investment Network under the EuroMed@Change Project, a Preparatory Action initiated by the European Parliament and implemented by the European Commission (DG Enterprise and Industry).

EuroMed@Change proposes new dynamics for SME and cluster internationalisation between Europe and 4 targeted partner countries: Morocco, Tunisia, Egypt and Lebanon. It is managed by four organisations from across Europe (ANIMA Investment network as Project leader, the European Business Innovation Centre Network, INNO AG and the Fondation Sophia Antipolis as partners) and it coordinates with more than 45 associated regional business, finance and innovation networks.