How one man turned Israel's Gaza blockade into a business opportunity

Ahmed Ramlawy's plastics company survived Israel's Gaza blockade by buying garbage at $395 a ton and turning it into products all Gazans need, like trash bags.

At the end of an alley in Gaza City’s Tofah neighborhood, an industrial ghost town full of quiet factories and unused warehouses, sits the Ramlawy Plastics Company.

The factory once hummed with the activity of 45 workers turning raw Israeli plastics into bags, storage containers, bottles, and pipes. Manager Ahmed Ramlawy says that in those days they made fat profit margins of 20 percent.

Those were "the good days," he says, before Israel imposed an economic blockade on Gaza when Hamas took control of the territory in 2007 after a brief civil war with its secular rival, Fatah. Once the blockade was in place, Mr. Ramlawy's factory was unable to obtain raw materials from its Israeli suppliers.

So, he improvised.

“During the siege, recycling was the only way to survive,” says Ramlawy. With its supply chain severed, his firm began to collect plastic from the trash to melt down and turn into new products. “Otherwise we would have had to stop completely.”

Thanks in part to Gazans like Ramlawy, Israel's blockade has been a double-edged sword for Gaza's environment. While the sanctions have exacerbated environmental problems ranging from sewage overflow to contaminated water, the scarcity of a wide range of goods has led both entrepreneurs and everyday people to turn to creative and entrepreneurial solutions.

Once Ramlawy Plastics could no longer obtain Israeli raw materials, it replaced them with garbage, such as broken chairs and empty potato chip bags, bought from Gazans for $395 per ton. The company washed and mixed the materials with Egyptian plastic smuggled into Gaza through the Rafah tunnels along the Egypt-Gaza border, and made them into something new. The Egyptian plastic is poorer quality than what they formerly bought from Israel.

It kept the company alive, but profits have shrunk to 7 percent and Ramlawy now employs just five men full-time. Production costs have tripled and demand has plummeted.

Shifting focus from irrigation pipes to garbage bags

But in a place buffeted by so much hardship, Gazans have learned to make do any way they can.

In Gaza City, demolition-cum-recycling crews scavenge what concrete they can from the rubble of war. Crews of young men and boys huddle at the edge of wrecked buildings with pick axes and shovels, carting chunks of cement off in donkey carts to be crushed into gravel that can be used to make repairs.

Indeed, necessity is the mother of invention, a lesson that the blockade has taught men like Ramlawy and the cement pickers all too well.

Once Ramlawy’s specialties were irrigation pipes and sturdy plastic bags to haul goods coming into Gaza from Israel. After cross-border traffic ceased and demand from farmers collapsed, the plant began producing bottles and bags for tissues. As the siege wore on, that strategy too faltered, as local production of tissues and bottled substances both stopped.

Today the company focuses on “things people cannot live without,” says Ramlawy, like household garbage bags.

He says demand for its irrigation products returned after the January 2009 Gaza war, which left the territory’s irrigation network in ruins. That pushed an estimated 73 percent of those who live on farmland near the Israeli border into poverty, says the UN’s Office for the Coordination of Humanitarian Affairs.

Ramlawy began buying tons of mangled plastic pipes from farmers for $1.30 a kilogram. He now sells three tons of post-recycled pipes each day. It is far less than the 20 tons of pipes he sold daily before the blockade began and, in his words, "business crashed."

Easing of Gaza siege not all good news

In June, Israel – under intense international pressure following a fatal Israeli raid on a flotilla trying to break the blockade – eased restrictions on imports.

The move was welcomed by the international community, but for those like Ramlawy who have learned to get by – and turn a profit – under siege, the eased import rules could be another source of instability.

The possibility of the return of cheaper and higher quality Israeli goods and materials, such as the raw plastic his company once bought, makes Ramlawy nervous, and he has stopped buying plastic smuggled in from Egypt because he is worried he will be stuck with it if better and cheaper Israeli materials become available again.

“If we change our business it might fail because Israel will enact new restrictions or circumstances, and if we stay in the same business it might fall apart for the same reasons,” he says. “In Gaza everything can change and there is nothing long-term.”