BEIRUT, June 29 (Xinhua) -- Lebanon's construction material industries are struggling to cope with up to the 40 percent lower demand for their products, as reported by exhibitors at Project Lebanon 2018 that closed on Friday.
"Demand for our products declined by 20 percent compared to three or four years ago because there are no new construction projects in the country," said Elie Farhat, sales executive at Rousse Trading, a building materials company, on the sidelines of the event.
Project Lebanon is a yearly event that brings together hundreds of exhibitors from 16 countries to display the construction industry's novelties.
Hadi Mahrouk, sales representative at CC Technique, a construction and building materials company, said the demand for his company's materials slumped 40 percent due to the drop in construction projects.
Contractors also do not pay for our products on time and lots of construction projects stopped because of the shortage in cash flow, he told Xinhua.
The lower demand for construction materials is caused by a decrease in the number of commercial and residential projects in Lebanon as a result of weak demand for houses and offices by Lebanese citizens.
"Demand for housing in Lebanon declined sharply in the first quarter of 2018 due to the suspension of interest rate subsidies on housing loans at the beginning of the year," said Nassib Ghobril, chief economist and head of the economic research and analysis department at the Byblos Bank Group.
The central bank of Lebanon provided banks with a fund worth 500 million U.S. dollars in February, allocated for housing loans that would be used by Lebanese citizens to buy apartments.
The fund, however, was drained within a month.
These banks are now offering housing loans with an interest rate of around six to seven percent on loans in U.S. dollar compared to three percent for subsidized loans.
"Most Lebanese found themselves priced out of the market without any subsidy support, which significantly impacted their decisions to buy or build a house," said Ghobril.
To compensate for their losses, Lebanon's construction and building material industries are looking forward to taking part in Syria's reconstruction.
"When reconstruction in Syria begins, Lebanese companies will expand their businesses by opening factories there in addition to exporting their locally made products to this market," Mahrouk said.
"We will start exploring our opportunities in Syria soon," he said.
Mahrouk is not the only one optimistic about an active role in Syria.
Mohammad Rizk, marketing manager at Ricci Ceramica, a ceramic wholesaler, said the first step for entering the Syrian market for his company is through its participation in Project Lebanon.
"We are meeting lots of Syrian people here at the exhibition asking about our products," he said.
Exhibitors are also optimistic about CEDRE Conference, an international conference in support of Lebanese development and reforms held in Paris in April, which secured over 11 billion dollars in soft loans and grants from international donors to revamp Lebanon's ailing infrastructure and bolster its economy.
Fady Najm, owner of Primo Group, a paints and accessories manufacturer, said he expects the CEDRE conference to create demand for his products.
However, Najm said these loans may be subject to certain conditions, such as imposing on contractors the purchase of building materials and paints from foreign companies and not local ones.
During the opening of Project Lebanon on Tuesday, Lebanese Prime Minister designate Saad Hariri said Lebanese companies will be able to take part in new big projects following the conference.
Meanwhile, Albert Aoun, chairman of the International Fairs and Promotions Group, said Lebanon will witness the launching of several construction projects after the conference.
