Lebanese factories are once again confronting an existential struggle as the country is drawn into regional conflicts. From the Gaza support war in 2024 to the ongoing Iran support war in 2026, the industrial sector has been forced to contend with a recurring pattern: closures in high-risk areas, partial production, relocation of some factories abroad or to safer zones, and financial losses averaging 50 percent. 

Like other sectors implicated in backing Hezbollah’s support for Iran, Lebanon’s industry faces challenges deeper than the 2024 war, the COVID-19 pandemic, or the 2019 financial crisis, which decimated savings, collapsed the national currency, and triggered soaring poverty and negative economic growth.

According to the Lebanese Industrialists Association, Lebanon has roughly 4,500 factories holding industrial investment licenses from the Ministry of Industry, with approximately 900 registered members in the association.

When the latest conflict erupted earlier this month, pulling Lebanon into war for the second time in two years via Hezbollah, factories located in high-risk and targeted zones closed their doors. Ziad Bakdash, Vice President of the Industrialists Association, told Nidaa Al-Watan that closures across the country currently range from 15 to 20 percent, particularly in southern Beirut suburbs, southern Lebanon from Sidon to the border, and the Bekaa Valley, except for the relatively secure area around Zahle.

Most factories are concentrated in Mount Lebanon, followed by the Bekaa and Keserwan. They produce a wide range of goods, from food and clothing to wood, tiles, and home furnishings.

Bakdash said roughly 70 percent of factories in southern Lebanon, the Bekaa, and southern Beirut remain closed due to the conflict. Workers are the most vulnerable in these crises. Employers have responded differently depending on circumstances: some continue to pay half salaries for those whose facilities remain intact, while factories destroyed in the fighting are unable to compensate staff at all.

“Workers are consistently the first victims in any war in Lebanon,” Bakdash said. “It is rare for a year to pass without factories halting operations for one to three months. Employers cannot sustain payrolls without production, leaving employees in financial limbo.”

The conflict has also caused internal displacement. Around 15 percent of factory workers living in targeted areas have relocated, making daily attendance at operational factories nearly impossible. Employers have had to respond by reducing salaries, deducting pay from annual leave, or temporarily halting wages, depending on their financial capacity.

During previous conflicts, including the 2024 war, some factory owners relocated operations abroad, mainly to the UAE, Saudi Arabia, and Oman, while maintaining Lebanese production lines. Bakdash noted that fewer than 20 factories took this step due to high manufacturing costs abroad. Others attempted to move operations to safer zones within Lebanon, but logistical and time constraints often made relocation impractical.

Currently, only one factory has shifted operations abroad—specifically to Syria, attracted by a larger market and lower production costs. Other factory owners are waiting until the war ends before considering relocating plants from dangerous zones within Lebanon, hoping to prevent repeated disruptions in the future.

Unlike luxury goods factories, consumer goods and food producers continue to operate, supplying both exports and the domestic market. Bakdash stressed that the claim that 80 percent of Lebanon’s consumption is imported is misleading. Lebanese industry accounts for approximately 48 percent of local consumption.

In 2025, imports totaled around $21 billion, of which $11 billion were for goods Lebanon cannot produce, such as cars, gold, silver, and fuel derivatives. Local production, valued at roughly $10 billion, meets competitive domestic demand, securing nearly half of the country’s consumption. During previous wars and the pandemic, Lebanese factories supplied over 80 percent of market needs. Consequently, domestic food security is largely maintained despite the conflict, although prices have risen due to higher taxes, fuel costs, and global inflation.

Factories maintain adequate inventories of raw materials and finished goods. Daily imports continue through the Port of Beirut, with alternatives via Tripoli and Latakia available if security issues arise at the main port.

Export operations continue for factories that remain open, but those that have closed cannot meet overseas demand. Prolonged closures risk losing foreign markets. Repeated conflict exacerbates this threat, potentially forcing importers to source products from more secure and stable suppliers. Lebanese factories also face restrictions in Saudi Arabia, which has blocked Lebanese products for the past six years, further complicating export opportunities.