The Daily Star:

Selling direct to foreign markets raises profits

RAMALLAH: Palestine's resilient business community has made its stone and marble industry a thriving one. It is emerging as the envy of even the best ­ the world famous Carrara quarry in Italy, out of which Michelangelo carved out masterpieces. Today the Palestine and Italian quarries are vying neck and neck, as they compete for sophisticated world markets like the United States.

It may sound strange, but the US accounts for 60 percent of Palestine's stone and marble exports. Stranger still: those selling highly marked up Palestinian marble to the Americans are Israeli businessmen. Palestine exports 65 percent of its total production to Israel. Only 6 percent goes directly to international markets.

When asked about this, Mohammed Shareah, executive director of Palestine's Union of Stone and Marble, says most of the marble goes through Israeli ports, and it isn't always easy to reach even these. Much longer routes must be taken, adding to transportation costs, which Palestinian businesses can ill afford.

Moreover, Palestinian manufacturers do not have the packaging and marketing network to sell to the international markets. Thus, as Shareah explains, "the easiest way is to sell it to the Israelis, who then repack, relabel it and use their fantastic international network to sell it."

Making it easier to sell to Israelis is that both share the same fiscal system and the same currency. This means immediate payment to the producers. Shareah says exporting to international markets means delayed payments ­ at least six-month credit lines.