Dubai: Palestinian stone and marble manufacturers are diversifying revenue streams as the cost of producing under occupation becomes less competitive than cheaper alternatives from other markets.
“We cannot be [as competitive] in the market as Egypt or Turkey,” said Akram Bader, general manager Bethlehem-based Verona Group, the holding company of Holy Land Stone, a firm with $8 million (Dh29.38 million) in annual revenues.
Companies in the West Bank, Palestine, face high costs as products need to be transported across the country and into neighbouring Israel or Jordan, to be exported.
Speaking at The Big 5, Bader said it costs around $1,200 to export a container of stone and marble product from Bethlehem through Israeli ports. He said it costs Egyptian firms $200 and Turkish companies $350 to export through their domestic ports.
The high export costs are ultimately passed on to the customer, making cheaper alternatives more attractive to consumers.
“We need a direct port,” Bader said at The Big 5 in Dubai on Monday, suggesting the port in Gaza should be opened for Palestinian companies.
Suhail Thalgieh, managing director of Jerusalem Stone Group, said that people want to buy large, cheap volumes from Oman, Turkey and China, which he said, is difficult for the Palestinian firm to compete with.
He said it costs $2,700 to export through Jordan, which includes changing trucks at the border. Exporting through Israel is still costly at $1,700, he said. Most of what the company produces — 95 per cent — is exported.
But the company is also eyeing expansion plans and is in discussions to acquire a factory in Abu Dhabi, in a move Thalgieh said, is to be closer to the company’s largest single export market. It also plans to open an office in Dubai early next year.
The Palestinian company, which has annual revenues of $4 million, will use the factory for storage and cladding, Thalgieh said. The company is also in the process to start offering installation services as it looks to diversify revenue streams.
Nassar Stone, a company that established in Bethlehem 25 years ago, started producing Omani stone and opened a logistics factory in Jordan in 2004.
Ali Nassar, a sales manager at the company, also said that export costs were a primary challenge for company’s Palestinian operations.