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Palestinian Industries

Palestinian Industries

Industrial Base

Economic growth potential in Palestine lies with the Palestinian private sector. Small-scale, single owners and family enterprises dominate businesses. Large enterprises are still very limited in number. The private sector industrialists have been accustomed to profiting under difficult circumstances during the occupation, using their size as a source of flexibility in favorable market conditions. Major Palestinian Industries include:


Stone Industries

The stone and marble industry in Palestine is a growing and successful industry. It contributes 4% to the GNP and 5% to the GDP. The Palestinian stone and marble is significant not only by local standards but also globally. It constitutes around 4% of world production (one third of Turkey’s production and half of that of Germany). Its product varieties, colors and features most types meet international standards and specifications characterize Palestinian stone. The competitiveness of Palestinian stone derives from two sources:

  • Its origin from the “Holy Land” creates spiritual and symbolic imagery in the minds of much of the world’s population - particularly Christians and Moslems
  • The variety of colors and textures of the products.

Construction Material Industries

The contribution of the construction sector to the GDP is currently rising in real terms and as a percentage of the total labor force. This sector is also important for growth as it carries significant forward and backward linkages, ranging from simple manufacturing plants to major construction materials production and processing industries. In addition, the industry has also acted as an impetus for the promotion and mobilization of local investments and has contributed to the consolidation of the Palestinian economic base.

Textiles and Garments

The Palestinian garments and textiles sector employs an estimated 65,000 workers in the West Bank and Gaza and contributes approximately 15 percent of Palestinian manufacturing output. Most manufacturers employ fewer than 20 workers but a few companies have more than 100. Palestinian producers sell approximately 70 percent of their production locally (accounting for a 20% local market share) with an additional 20 percent being sold to Israel (and through Israel agents to overseas markets).
A small amount is exported directly to overseas buyers. Total investment in the sector is estimated at $46 million, much of which is in the form of the latest equipment used by mostly family owned enterprises. The garment and textile sector makes an extremely important contribution to the Palestinian economy. It is an industry in the midst of redefining itself however, as international competitive pressures make it more difficult for Palestinian products to compete on international markets when marketed through existing channels, primarily Israeli agents. Palestinian producers are currently manufacturing a wide range of products including underwear, children’s wear, knitwear, tailored shirts and trousers etc. The quality is high as is attested to by the presence of some of the world’s best-known brand names on products currently exported under license to Israeli agents.


The Palestinian National Authority is committed to encouraging local and foreign investment in the agricultural sector and to developing an export market for Palestinian produce. The agricultural sector generates approximately 25% of all Palestinian exports; major agricultural exports are fruits (72% of the cultivated area), olives and olive oil, strawberries, vegetables and, more recently, cut flowers.

Food Processing

The Food Processing sector is one of the most rapidly developing sectors in the Palestinian economy. The vitality of the sector’s basic products as well as the recent developments in quality to meet international standards and requirements are both enhancing the sector in the local market and increasing the export capacities of local producers. Local market share increased from 25% in 1996 to 30% in 1997 – an increase of 20% in market share for local producers. This increase is an indicator of the development and growth of the industry.
Market studies reveal that the average family spends 42% of its income on food, indicating the importance of this sector and the need for a competitive local industry to provide high quality food products. The total market for Palestinian food products is approximately $35 million per year.


Palestinian handicraft has its origins in the production of indigenous basic utensils and domestic furnishing made of clay, glass, straw, wood and cane. The increasing importance of Palestine as a destination for tourists and religious pilgrims has stimulated development of handicraft industries producing for local and international markets. In addition to the traditional embroidery, Palestinian artisans incorporate local and imported designs in the production of olive, wood and mother-of-pearl souvenirs, including crosses, Christmas tree ornaments, nativity scene sets, Islamic motifs and jewelry items bearing the insignia of the Holy Land.
Furthermore, Palestinian artisans produce (hand made) glass in a wide variety of shapes and colors, continuing a Mediterranean traditional craft dating back to Phoenician times. The tradition of rug weaving continues, using yarns hand-spun and hand-dyed, from wool obtained from the Awassi sheep. Leather, textile and bamboo products are also available. In addition, Armenian artisans have specialized in the production of fine painted ceramic tiles and pottery, thus adding to the range of traditional Palestinian handicrafts. Although these handicrafts workshops and retail outlets can mostly be found in and around Jerusalem, Bethlehem, Hebron and Gaza City, these handicraft industries are continuing to flourish and they seem to be growing extensively each year.

Metal Products and Engineering

The metal products and engineering sector in Palestine produces a wide range of products including wire, nails, welding rods, office furniture, warehouse shelving, household utensils, industrial scales, agricultural equipment, industrial machinery and tools, abrasives and others. The industry has captured an estimated 60-80% of the local market for its products and has been increasingly successful in export markets. The annual growth rate of this sector is estimated at 4%. Total investment in the sector is estimated at $50 million.

Chemical Industries

The chemical industry in Palestine includes three main product lines: paints, soaps and detergents. It also includes related chemical industries such as cosmetics, agricultural and industrial chemicals and fertilizers. The industry, which includes 119 factories, is widely spread in various Palestinian provinces: Nablus, Jenin, Bethlehem, Ramallah and Hebron.


There are 10 major factories in Palestine that produces paints. Their production covers 25-30% of the local market consumption.
The paint industry includes water-based and oil-based paints, industrial and car paints. The paint industry is one of the better-developed local industries and is characterized by the diversity of its production lines.


The local soap industry is unique in the region and in the world. The traditional ‘Nabulsi’ soap is only produced in Palestine and is one of the most popular traditional soaps in the world since it is based on olive oil. The industry is centralized in the city of Nablus and covers 100% of the local market and is exported throughout the region.


The detergent industry is also diverse: powdered as well as liquid detergents are produced; high foam for hand wash and semi-automatic as well as low foam for automatic and compact washers. The production capacity of detergents in the West Bank and Gaza is about 50 tons a day. The sales volume of washing powder reached 6,500 tons in 1996. The local market share of detergents is estimated at 50%.


The pharmaceutical industry in Palestine is unique in terms of its innovation and development. The industry only started after the 1967. Prior to that, all pharmaceutical products were imported from foreign companies via importers in Amman, Jordan. This difficult situation led nine pharmacists in the West Bank to establish small laboratories to manufacture simple syrups and anti-diarrhea products in 1969. In 1970 nine small laboratories merged to become three larger companies: Jordan Chemicals in Beit Jala; Palestine Medical Company in Ramallah; and, Jerusalem Pharmaceuticals in El-Bireh.
After 1970 the pharmaceutical industry started to grow and new companies entered the local market: Balsam Co. in El-Bireh in 1972 and Bir-zeit Co. in Bir-zeit in 1973; Eastern Medical Co. and Gama in 1978, both in Ramallah; and Pharmacare in 1985 in Beitunia, and MASCO in Gaza in 1984.


The plastics industry is one of the more developed local industries. According to recent statistics, the total investment in the plastic sector in the Gaza strip reached 11 million US Dollars. 60% of the local production is marketed in Gaza, 30% in the West Bank and 10% in Israel. 65% of plastic factories in Gaza market 80-100% of their production in Gaza. 75% of the factories in the West Bank market around 50% of their production in Israel.


Medium and High Tech

Due to the huge shift in the economy of Palestine and its enlargement, medium and high tech firms have been created. Furthermore, the Industrial Free Zones and the promising laws of investment encouraged investors to establish new enterprises in this field. Connections with the World Wide Web / Internet services, and computer technology, as well as all the other advanced technologies, have been achieved, and Palestine is now considered a competitive country compared to other countries of the region.


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