• TEXTILE AND GARMENTS SECTOR
• RUBBER AND PLASTIC SECTOR
• FOOD PROCESSING
• WOODWORKING INDUSTRY

Historical Background

The industrial sector consist mainly of small scale workshops . Before 1967, the Israeli occupation of the West Bank and Gaza strip, the industry in Gaza strip used to depend on the Egyptian markets and visa versa . And since 1967, the Gazan industry and economy became more dependent on the Israeli industries to meet its needs on subcontractual basis . The industrial share of the Gross Domestic Product ( GDP ) is still very low where it was between 1970’s - early 1990’s less than 10% in general. About 90% of the exports of Gaza was headed to Israel , of which was finished or semi finished products. Since the signing of the OSLO peace agreements , a rapid increase has occurred in the manufacturing sector of the Palestinian economy. Out of the 20 manufacturing activities of Gaza, there are 10 accounts for about 95% of establishments, employment, and value added in the manufacturing branch .

The main manufacturing activities among the 10 in Gaza strip are: food & beverage, textile, wearing apparel ( garment), wood products (especially furniture), and plastic products .

What Makes Investment in Palestine Viable ?

• Productive and relatively cheep labour .
• Available free trade zones within an industrial estates .
• Available industrial infrastructure .
  * Free trade agreements signed between PNA, and the EU, USA, EFTA, Jordan, Egypt, & soon with Canada and the Gulf countries .

  Free access to regional markets ; namely Israel, Egypt, Jordan, and the Gulf countries.

I. The Textile and Garment Sector

Textile and garments combined make up the largest sector of industrial activity in the Gaza strip . Over 700 firms employing 30% of the local work force ( around 35000 workers ), in various activities , ranging from fabric production factories to embroidery workshops. The largest activity by far is subcontracting to Israeli firms. Approximately 90% of the garment factories function in this capacity, either as simple sewing workshops as cutting and sewing establishments, or as cutting, sewing, and trimming factories. These products are then sold in Israel for the Israeli market or to be re-exported to foreign markets .

The remaining 10% of the garment firms produce for the local market. The quality of their products are generally low. Cutting, sewing, and trimming are the functions produced in the local firms ; however no pattern making or original designs are produced .

Regarding the textile production, circular knitting is the largest manufacturing activity, with 13 factories producing a limited range of fabrics. The production is marketed in the Gaza and the West Bank markets, with only 10% sold to the Israeli market. Flat knitting, which is one of the oldest industries in Gaza ( dating back to 1950’s ), is the next largest textile production activity with five factories .

* New investment Opportunities

• Yarn production
• Denim production and finishing
• Socks and pantyhose production
• Business Opportunities
• Export / Import of fabric and accessories.
• Subcontracting with local manufacturers.
• Joint Venture JV, projects in new investments in men, women, teenagers, and children fashion.

II. The Rubber and Plastic Sector

Beginning in 1978, the plastic industry in Gaza is relatively new industrial sub-sector that employs around 400 workers. The sector began production in the area of blown film, producing plastic containers and plastic fittings for agricultural and construction purposes. As the industry improved, it entered a new subcategory centered on injection molding. Later, plastic production expanded once again to produce electrical wires covering, and then to produce water pipes of various diameters. Most recently, the blow molding subcategory has begun. Plastic mats production is now available in the Gaza Strip, as are plastic tanks and children’s toys manufacturing by rotational molding .

Approximately 57 factories are in operation in Gaza, operating more than 200 machines. Total plastic production runs at 600 tons per month, and the manufacturing base is broad based, currently producing such varied items as containers, fittings, water hoses, and blown films. Manufacturing processes needed to produce this base including extrusion, injection molding, blow molding, and thermoforming .

The rubber sub-sector is much less developed. Rubber manufacturing in Gaza is limited to three firms which engaged in compression manufacturing . As is commonly the case in Gaza manufacturing, most firms in plastic manufacturing are small workshops employing less than 10 workers. Specifically, over 79% of the plastic firms in Gaza employ fewer than 6 workers. The 21% employ between 5-10 workers ;7% are factories with a workforce numbering between 10 and 20 workers . Only 2% of the factories in Gaza employ over 20 workers . 65% of plastic production in Gaza strip goes to domestic consumption, the rest 35% is marketed in West Bank and Israel.

Currently, raw materials are imported into Gaza through a variety of sources. Israeli producers and agents accounts for most of the imports. Direct external sources, particularly from Europe, account for a minority of inputs. Most of the high-density polyethylene originates in Europe; low density polyethylene comes from Israel, as does polypropylene. Polyvinyl chloride is imported both directly from Israel and from Europe .

In terms of actual production, the local economy in Gaza makes up the biggest market share. The local consumption represent 60% of the total market, west bank consumption represents 10% of sales with the reminder being sold in Israel.

Production Patterns

The following list is an index of the type of plastic products in Gaza

• Injection Molding Manufacturers
• Blow Molding manufacturers.
• Hose manufacturers.
• Manufacturers of water pipes and healthy spending production lines .
• Manufacturers of normal and agricultural nylon .

• Plastic processors Central Laboratory Facilities.
• Plastic Compounding.
• Better Mold Design for the Plastic Industry.
• Manufacturing of Chairs, tables, and similar gardens furniture.
• Medical disposable.
• Plastic recycling and palletizing.

Import of raw materials & Joint Ventures.

III - Food Processing

Food processing is one of the most historic and important subsectors in the Gaza strip. Building from an agrarian economic base, food processing has been a natural growth area for the industry at least since the citrus industry was established in the Gaza Strip as an income generating activity. Currently, food processing employs around 1000 workers in approximately 80 firms .

The current state of the food processing industry lays some clear indicators for future investment. The agro-industrial sector could easily expand to include tomato paste production, as well as jam, potato chip, and vegetable freezing lines. Dairy production could expand to milk, cheese and yogurt production, while confectionery could include new lines in chewing gum and chocolate. The pasta industry is ready for all types of expansion in Gaza. This sub sector has been totally reliant on local market demand during the past months of border closures and has used cost cutting in order to maintain competitiveness in the local market against the expanding influx of imported products from Egypt, Jordan, Turkey, and Israel .

Further inventions with this sub sector should focus on the issues of product quality enhancement, process upgrading and packaging improvement. Work should also be done to expand the range of local products and particularly in the processing of surplus fruits and vegetables.

New Investment Opportunities

• Dairy plants.
• Jam plant.
• Frozen Vegetables.
• Potato Chips.
• Confectioneries.
• Pickles Plant.

IV-The Woodworking Sector

The wood working industry is considered to be one of the oldest industries in the Gaza strip. Despite the manufacture of other materials in Gaza, like plastic or metal, wood is still widely used for its natural appearance and organic feel .

In 1948 there were 13 carpentry workshops. By 1998, this number increased to 412. Currently, the total number employed in this field is 1002 workers. Most have gained their experience through working in Israeli factories or from working in the local carpentry workshops . The main production involves home furniture of different types, manufactured mainly from wood and bamboo, as well as construction. The total investment in this industrial sector is estimated at 12 million dollars.

This report is limited only to one product group, household or domestic furniture, and excludes the contract sector, as that is a smaller part of the total production in Gaza.

The final products of the Gazan industry is marketed as follows:

• 71% of the total production to the West Bank and Israel.
• 29% of the total production is marketed in Gaza.

• Manufacturing of bed room furniture.
• Manufacturing of kitchen furniture.
• Manufacturing of wooden pallets.
• Manufacturing of office furniture.

• Import of raw materials and accessories.