EU support to innovative manufacturing in Lebanon

Aiming for a dynamic Lebanese economy fueled by modernized and growing industrial enterprises, the Euro-Lebanese Centre for Industrial Modernization provides manufacturing SMEs with technical and financial assistance. Funded by the EU since 2001, ELCIM is getting this year additional financial support to boost innovative projects.

Danielle Daher - Beirut, Al-Hayat

Since its initiation in 2001 and till this year, the Euro-Lebanese Centre for Industrial Modernization (ELCIM) has gone a long way, and became a business support administration within the Industrial Research Institute (IRI), working on improving the performance of Lebanese manufacturing enterprises. Thanks to the support of the European Union since its first phase (from 2001 to 2004), and with the encouraging results registered during this phase, ELCIM started again in 2005 a second phase, with the main task of supporting businesses and with additional financial European support.

The Euro-Lebanese Centre for Industrial Modernization benefitted from 20 million Euros allocated by the European Union throughout the previous years. An additional 2.5 million Euros are expected this year to support the IRI and ELCIM in their performance and growth plans.

The Centre already proved to be of help for 400 industrial enterprises which needed support and technical advice to improve their performance and revenues. In addition, a number of workers were able to attend seminars and training sessions organized by international experts.

Dr. Bassam Frenn, Director General of the IRI, detailed in an interview with Al-Hayat, the role of the Institute as well as the stages that ELCIM went through until its final integration within the institute, when it became along with other centers a cluster that works on boosting Lebanese industry. He noted that one of the 28 sectors outlined by the national plan for the reconstruction of Lebanon “focused on industrial modernization in cooperation with the European Union. Work on this plan kicked off in the year 1993-1994. The general guidelines were set for the establishment of industrial zones and other free zones for exports as well as the relocation of some industries. Primary stress was on the quality of products and production and the minimization of polluting factors inside factories and enterprises.” In 1996, the final approval on the plan was given. “We worked then on two main issues; the rehabilitation of the Industrial Research Institute, and the reviving of the previously paralyzed Lebanese Standards Institution (LIBNOR). A new organization was created, the Lebanese Council for Accreditation (which law was promulgated in 2004). We worked with the European Union on a primary goal, the development of quality production in Lebanon,” says Frenn.

Frenn noted that among the projects established was ELCIM-1, which was initiated in the year 2001. This Centre was based within the Lebanese Chamber of Commerce and Industry. It moved during the second phase of implementation to the IRI. He also underlined that “other European projects are executed within the institute, such as the Subcontracting and Partnership Exchange (SPX) and the Lebanese Cleaner Production Centre (LCPC). We were the first institution in the region to have established with the European Union the industrial support database.”

Frenn unveiled two other projects that will be executed this year in cooperation with the European Union, namely the “Technological Innovation Centre” which supports the creativity of Lebanese youth. 1.2 million Euros were allocated by the European Union for this project; another 1 million Euros were arranged for ELCIM, to boost technical support for innovation.

Frenn announced as well that 6 projects will be executed in cooperation with the EU this year. He stressed that the institute has the capacity to execute more projects, knowing that the global budget allocated by international sources for such projects is considerable. However, according to Frenn, “the inconvenient situation that prevailed in the country the last few years was not in favor of any progress with our European partners.”

The Industrial Research Institute
The Industrial Research Institute is an institution that benefits from financial and administrative autonomy. It is linked to the Ministry of Industry, and the Minister of Industry chairs its administrative board. Frenn insists that “the activities and services offered by the institute are not selective and cover all administrations.” He pinpoints that “the institute takes its strength from its financial and administrative autonomy, as it has more room for maneuvers than other governmental administrations and is more flexible to seek support and financial help.”

Some of the most important resources that enable the Industrial Research Institute to realize its aims are 12 laboratories, among which 5 are accredited on the international level. The institute performs a series of scientific and technical studies based on 300 benchmark methods. It also grants certificates recognized in 127 countries around the globe. “Industrialists do not have to wait anymore for the results of tests done abroad to be able to export their products to other countries,” explains Frenn.

“Thanks to ELCIM and to the European Union support, notes Frenn, 600 evaluation studies or global diagnosis were performed for Lebanese enterprises. We endeavored to reduce the cost of production and to ensure a cleaner industrial production to safeguard the environment. 7 million Euros were allocated by the European Union to fund technical partnerships.”

ELCIM’s initiation
ELCIM director, Raja Haber, went back to 2001 to talk about the initiation of the Centre with the support of the EU. He explains that the EU opted for the creation of this centre to offer consulting services to Lebanese industrialists. He noted that between the year 2001 and 2004, the European Union offered 11 million Euros to ELCIM-1 and the main aim of the project was the improvement of quality and management. “ELCIM used to constitute an independent unit not affiliated to any organization. It was established in the premises of the Lebanese Chamber of Commerce and Industry, and then it was hosted by the Industrial Research Institute. In 2004, the EU decided to reformulate the overall plan of ELCIM. A feasibility study was prepared the same year and phase II of the programme was launched, according to the results of this study. The Industrial Research Institute was elected to be the hosting institution for the programme, knowing that both entities are complementary.”

The Centre re-launched its activities in august 2005, with the same objectives and services. “The new terms required a Lebanese management to the programme. This is when I took over the position of director. The first thing we adopted from the EU was the set of terms and conditions, which was interpreted into a three-year action plan. The execution of the project was paralleled by an annual evaluation prepared by the leading committee, which gathered representatives from public and private institutions. The action plan was approved by the concerned minister and the green light was given for its launching,” explains Haber.

The re-launching
Haber added:”Work began officially in the year 2006, i.e. one year after the re-launching. This year was required to collect tenders and select the adequate experts and institutions to work with.” He noted that the funding of ELCIM-2 reached 6 million Euros, knowing that the Industrial Research Institute, which hosts ELCIM-2, is responsible for the wages of the Lebanese administrative staff. Haber explained that “an extensive list of tenders was submitted to the Centre. After consultation, tenders were won by consulting companies. These sent their experts and work began with 300 industrialists. These industrialists had to be members of the Association of Lebanese Industrialists (ALI) or the Chamber of Commerce. Their companies should include at least 5 employees.”

Support services
The industrial sectors that were able to invest the most with the centre were the food and drink industry, packaging, printing and information technology. Haber noted that “the majority of industrialists asked for feasibility studies to get loans from banks. These services were offered to 70 industrialists.”

Technical assistance was offered to 40 industrialists to apply for ISO certification. Other SMEs were supported to participate in international fairs, which helped them better understand the markets and choose the adequate destination to sell their products, said Haber, noting that all sectors could benefit from the support, “yet, priority was given to primary sectors, allowing them to participate in fairs and to get diagnosis and feasibility studies elaborated by experts.”

Thanks to ELCIM financial unit, SMEs were able to access loans to develop and expand their productions. “The tangible results of this support were not accessible to us, since such matters were considered as private to each enterprise,” explained Haber. He goes on to say that efforts were carried out with credit-guarantee institution KAFALAT to facilitate access to loans.

Haber indicated that thanks to ELCIM, industrialists were able to participate in several international fairs, such as the world’s most important trade fair for food and beverages, Anuga in Cologne, Germany, as well as a packaging fair in Great Britain, and many others.

Training sessions
Haber stressed as well on training efforts carried out by ELCIM, noting that around 1200 persons from 450 industrial enterprises in Lebanon were trained and had access to European know-how in this field. On another level, industrial companies (around 250) have to take in charge 20% of the cost of consulting services, while the EU funded the rest. As for the training, it was entirely funded by the enterprises.

Since August 2008, the centre is self-financed. Its revenues come from the services that it still offers to industrial enterprises. Haber indicates that the number of companies seeking help from the Centre has diminished due to the fact that they had to pay now for any study performed by the Centre. “The EU allocated an additional 2.5 million Euros for the Industrial Research Institute and ELCIM to support the services offered to Lebanese industrialists. The main goal is to encourage innovation and innovative clusters in Lebanon in cooperation with Lebanese research centers and universities,” concludes Haber.

N.B: Text translated from Arabic by Eurojar team

Refer to the project fact sheet: Integrated Support to Small and Medium-Sized enterprises (Lebanon)