USAID/COMPETE MONTHLY PROGRESS REPORT

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USAID/COMPETE MONTHLY PROGRESS REPORT August 1, 2016 – August 31, 2016

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. It was prepared by DAI. SEPTEMBER 2016

USAID/COMPETE MONTHLY REPORT

August 1, 2016 – August 31, 2016

DAI Contract Number: AID-294-C-12-00001 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. It was prepared by DAI.

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TABLE OF CONTENTS

ACRONYMS AND ABBREVIATIONS ........................................................................................................ II

CHAPTER ONE: INTRODUCTION ........................................................................................................... 3

CHAPTER TWO: KEY ACCOMPLISHMENTS ......................................................................................... 4

WEST BANK .......................................................................................................................................................... 4

Agribusiness ............................................................................................................................................................. 4

ICT ............................................................................................................................................................................. 4

Stone & Marble ....................................................................................................................................................... 4

Tourism .................................................................................................................................................................... 5

GAZA KEY HIGHLIGHT ..................................................................................................................................... 5

CROSS CUTTING AND VISITS ........................................................................................................................ 7

CHAPTER THREE: SUMMARY OF PROGRESS BY SECTOR .............................................................. 9

WEST BANK .......................................................................................................................................................... 9

AGRIBUSINESS .................................................................................................................................................. 9

ICT ...................................................................................................................................................................... 14

STONE AND MARBLE .................................................................................................................................. 17

TOURISM .......................................................................................................................................................... 19

CROSS CUTTING .......................................................................................................................................... 21

GAZA ..................................................................................................................................................................... 22

AGRIBUSINESS ................................................................................................................................................ 23

FISHING............................................................................................................................................................. 25

ICT ...................................................................................................................................................................... 26

FURNITURE ..................................................................................................................................................... 29

TEXTILE AND GARMENT ........................................................................................................................... 30

TOURISM .......................................................................................................................................................... 32

ANNEX A: GAZA ONGOING ACTIVITY REPORT .......................................................................... 34

ANNEX B: UPCOMING EVENTS SEPTEMBER 2016 .......................................................................... 49

USAID/COMPETE MONTHLY REPORT, AUGUST 1 – AUGUST 31, 2016

ACRONYMS AND ABBREVIATIONS AAUJ Arab American University of Jenin

B2B Business to Business

BOQ Bill of Quantities

COP Chief of Party

DQA Data Quality Assessment

EDF Environmental Documentation Form

Geo-MIS Geographical Management Information System

GLOBALGAP Global Good Agricultural Practice

ICT Information and Communications Technology

iOS Internet Operating System

M&E Monitoring and Evaluation

MOA Ministry of Agriculture

MOTA Ministry of Tourism and Antiquities

NIS New Israeli Shekels

MoU Memorandum of Understanding

PCRHTS Palestinian Commission for Restaurants, Hotels and Tourist Services

PCARD Palestinian Center for Agricultural Research & Development

PIP Palestinian Internship Program

PITA Palestine Information Technology Association

PMEP Performance Monitoring and Evaluation Plan

PPIS Plant Protection Inspection Service

PPSQ Plant Protection safety and Quality

PSI Palestine Standards Institute

FY5/Q1 First quarter of USAID/Compete Project Fiscal Year Five

RFP Request For Proposal

RFQ Request for Quotations

SME’s Small and Medium Enterprises

SOW Scope of Work

TAMIS Technical and Administrative Management Information System

USAID United States Agency for International Development

USDA United States Department for Agriculture

WIU Palestinian Wood Industries Union

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CHAPTER ONE: INTRODUCTION

The USAID/Compete Project is pleased to present its monthly report for the period of August 1 – August 31, 2016. The report includes July achievements and progress against interventions detailed in the Project’s Year Five Work Plan for both the West Bank and Gaza. While the program in the West Bank is a continuation of the previous years’ activities in selected value chains and is mainly focused on concluding those respective development objectives, in Gaza Compete is opening a new chapter of programming after many years of limited development amongst a totally isolated economy. USAID/Compete aims to support the Palestinian private sector in strengthening its competitiveness and expansion into new local, regional, and international markets in the key sectors essential to the future prosperity of the Gazan economy. USAID/Compete will support the agribusiness, fishing, ICT, furniture, textile and garment, and domestic tourism sectors. The West Bank program as planned is focused on building the production capacity of firms to grow locally and expand regionally and internationally. Our focus is on addressing key market failures that will open the horizon for new value chains. In reviewing this information, the following report is organized into three sections and includes two appendices. Chapter Two, following this introduction, presents the key accomplishments and details of each technical sector, disaggregated by region. Chapter Three includes discussing activities’ progress for each sector during the past month as compared to the Compete Work Plan and their respective indicators. Finally, the appendices outline the lists of trainings and workshops already completed, as well as upcoming events of note, respectively.


CHAPTER TWO: KEY ACCOMPLISHMENTS

WEST BANK

AGRIBUSINESS New Growing Patterns for Baby Cucumber

• USAID/Compete is supporting the introduction of new growing patterns for baby cucumbers, which have proven to increase yields and enhance quality. One-hundred and one (101) farmers from Jenin and Tubas applied to join the program. To date, the Projects’ team visited ninety-seven (97) farmers and signed sixty-nine (69) LOAs. The total area covered through these farmers is 108.5 dunums. All netting for the first batch of farmers was delivered; the roof insect netting that replaces the plastic cover will increase the productivity by one ton per dunum.

Progress of Grapes Program • Following the announcement of the grapes program, USAID/Compete received 691 applications

from interested farmers and companies which represent around 2500 dunums of planted vineyards. The project contracted two agronomists who completed the capacity building program and tasked them with follow up; they are mainly responsible for conducting field visits and validating information. During the month of July applications were submitted for vetting in preparation for the implementation phase. Additionally, the Project received technical offers from vendors for implementation; evaluation of the bids is underway. Site visits to 422 farmers in August assessed the validity of information in applications. The Project approved 52 cases to date and LOAs will be signed with approved farmers in early September.

ICT IBDAA Continues to Bring in New Ideas and Skills from Students • During the month of August, IBDAA continued to conduct meetings and events including a

“Maturing and Pitching Skills” workshop that took place at the Arab American University of Jenin (AAUJ) as well as a pitching workshop at the ANU University. USAID/Compete is bridging a gap between academia and the private ICT sector through the establishment of a new tech transfer company. USAID/Compete has partnered with four local universities to create the first technical transfer company (IBDAA) to promote research and development activities between the private sector and academia to help solve market failures and spur innovation among Palestinian youth.

Copyright and Intellectual Property Workshop • USAID/Compete’s ICT Sector led the organization for a workshop in Ramallah focused on

increasing expertise in issues related to different forms of intellectual property and copyright law. Representatives of the Palestinian private sector, start-ups and entrepreneurs participated.

STONE & MARBLE Private Sector-Academia Technology Innovation Program • USAID/Compete entered a partnership with National Instruments (NI) - a US-based firm

developing automated test equipment and virtual instrumentation software - to build the capacity of local universities around machine design and manufacturing to improve the competitiveness of value chains of key sectors on the Compete Project. USAID/Compete identified Palestine Polytechnic University (PPU) in Hebron as its academic partner for this project. While NI has agreed to provide technical training, mentoring and certifications, USAID/Compete will fund and facilitate the full operation through the lifetime of the extended Project. Key sectors that could benefit include agriculture, tourism, information and communications technology (ICT), stone and marble, food processing, and machine producers.

Technology Transfer Using Stone Waste to Produce New Products • USAID/Compete is supporting technology transfer to develop new products from stone waste,

and has supported Ejada Company in their training in Russia at SISTROM Company to ensure the transfer of this technology.

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TOURISM The Site Renovation Program • Procurement documents were prepared and RFPs issued for the rehabilitation of Burqin Historic

Center, and the restoration of two historic buildings in Beit Sahour that will be used as a handicraft village, and an Information Center. The bids for projects implementation were submitted, the evaluation was finalized.

GAZA KEY HIGHLIGHT

Agribusiness Cross Cutting - As part of USAID/Compete’s plan to address water challenges affecting the agriculture sector, a specialized wells project has been designed, whereby solar system will be used to operate these wells replacing the inconsistent electricity supply and costly fuel. The project will include up to 40 wells supported by solar systems. Forty-four (44) potential beneficiaries have been shortlisted to receive support, to date forty-three (43) have been vetted. The vendor has been pre-selected and implementation is pending CLA approval for material and equipment entry to Gaza. Fresh Herbs - As part of the scalability high-value production patterns program, vendors have been identified to supply 100 dunums of farmed land with agricultural inputs to support the fresh herbs sub-sector. To date, nineteen (19) applications have been processed and approved, covering a land area of 80 dunums and another 60 dunums are in the pipeline. Ten LOAs were signed with individual farmers. In August the Project began installing green houses and implementation will follow through until completion expected in September. Vegetables - To date, USAID/Compete Project has signed LOAs with sixty five (65) farmers covering 234 dunums to join the vegetable subsector high-value production patterns program. Netting was installed across 234 dunums benefiting 65 farmers. Upon the high demand from farmers to expand the program, on 16 June 2016, USAID/Compete announced a second phase with an additional 200 dunums, and received 144 new applications. The second phase enabled farmers planting on leased land to also join the program, which brings the total of applicants to 193. Of these applications, 51 farmers were approved and four LOAs signed. The second phase of netting will commence in March 2016. Moreover, Husny Shihadeh Company is being supported by USAID in installing a cooling room. Two other companies have been identified for support with cooling rooms and have been approved by the FLAP Committee. The project is currently selecting the vendor, once this process is completed, it is expected that grants will be signed with both companies in early September 2016. During this reporting period the Ag team has been reviewing the applications to identify those who meet the criteria. Strawberry Value Chain - USAID/Compete intends to strengthen the strawberry sector in Gaza through introducing new strawberry production patterns for up to 100 dunums of single span high greenhouses. The program received interest from 196 farmers of which 93 completed full applications and submitted to FLAP. To date, 86 LOAs were signed with farmers, and eighty four (84) dunums of greenhouses have been installed for the strawberry farmers which include netting for shade. Moreover, Compete Project has completed a pilot project that aims to ensure the feasibility of hanging strawberry farms in relation to Gaza’s specific economy and climate. The hanging systems for the two participating farms were installed and the seedlings process commenced and will be planted during August or September 2016, Compete’s Agriculture Specialist also visited the two farms and trained the agronomists and the workers on handing system in these farms.

Fishing Activities for Kuhail Fish Farm have been completed with handover occurring during the month of August; the activity included the creation of a fingerlings lab and installation of a solar energy system. The results have been remarkable with 700,000 fingerlings produced to date, and 100,000 supplied to another onshore fish farm – Fish Fresh. Kuhail signed a contract with Fish Fresh to supply them


with 100,000 fingerlings per month. Each month this will bring savings of around 70,000 NIS to Fish Fresh and they are satisfied with the quality of fingerlings. At Fish Fresh the Project installed aerators and an electricity generator increasing the quality of production and ensuring an uninterrupted power supply. The second back-up generator was delivered in July. Operations in the new expansion farm commenced with the placement of imported fingerlings in one of the new pools with the fish expected to reach maturity in September. USAID/Compete is also supporting Al Bahar fish farm in expanding their facilities, during the month of August progress has been made in preparing land and infrastructure. Information and Communications Technology USAID Compete project signed a grant with Gaza Gateway to help build their internal organizational capacity to become a robust outsourcing company on the regional level. It is expected that Gaza Gateway will become a significant employment generator among youth in the Strip. It is worth mentioning that Gaza Gateway used to be a department within UNRWA working on implementing ICT projects for UNRWA only, the department was spun off as a private sector company in late 2015. Compete’s intervention includes capacity building for senior management and company assessment and business plan. By the end of this reporting period, USAID/Compete has received 85 ICT applications for firm level assistance from Gaza. Nine applications were approved, Dalata Code, Gaza Gateway, MTC and Unit one. The Project signed a grant with Gaza Gateway to conduct capacity building for the institution to enable them to become a platform for employment in Gaza especially in the areas of outsourcing and localization. In addition, two LOAs have been signed this month with MTC and Unit One. Tourism In the Gazan tourism sector, the Project received 32 applications with assessments underway. During the month of July, two LOAs were approved and signed with Roots Hotel and Salam Restaurant to conduct solar energy assessment and procure operational management software.

Following the completion of the institutional assessment conducted for Palestinian Committee for Hotel, Restaurant and Touristic Services, and based on the results and recommendation, USAID/Compete will support PCHRTS to develop their website, install accounting and membership software, equip and furnish their office, develop the association internal control manual. Accordingly, an in-kind grant was signed in August 2016 with PCHRTS. Textile and Garment Compete received fifty six (56) applications to date, and signed sixteen 16 advisory LOAs. The Project has so far signed nine (9) technical LOAs supporting companies with new technology and workforce development. Furniture On the institutional level, an assessment of WIU has been completed. The purpose of this assessment was to obtain baseline information on the unions’ operating environment, identify the strategic and operational challenges facing the union and eventually enable the Project to determine the type of technical assistance and capacity building support needed for the unions. Compete will support the WIU in revising the union strategic plans, governance policies operational plan, monitoring system as well as the accounting system in addition to hiring one accountant to manage the system. The grant will be signed in September 2016.

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From L to R: Senator Cory Booker, Mr. Donald Blome - US Consul General of Jerusalem, Mustafa Deeb - Compete ICT Sector Lead, Jonathan Kamin - Acting Mission Director, USAID, Nedal Zahran - Co-founder Leaders Organization meeting with a startup incubated at Leaders Organization – a beneficiary of the compete Project.

CROSS CUTTING AND VISITS Senator Cory Booker Visits USAID/Compete Agro and ICT sector beneficiaries During this month Mr. Cory Booker Senator of New Jersey State met with members across the Palestinian ICT ecosystem at the first Beneficiaries of the Compete Project including West Bank Salt Company and Palestinian technology hub E-Zone, which was established by Leaders Organization with support from USAID.

The Senators visit began with meeting with agriculture beneficiaries at the West Bank Salt Company, including farmers from the strawberry, dried herbs, fresh herbs, potato and carrot sub-sectors to understand the opportunities and challenges of operating in the industry. West Bank Salt Company is a service provider that is producing flexible pouching packaging which enables producers to market their products to local and international markets.

At Leaders Organization, Senator Booker met with individuals who have created start-ups, members of Venture Capital firm Sadara, and other ICT players across the ecosystem. The Senator was briefed by Mr. Said Abuhijleh, COP of the USAID/Compete Project, on the current status of the Palestinian ICT sector as a whole and future projections and trends. The Senator was briefed on the work of Leaders to support Palestinian entrepreneurship and ICT start-ups by Nedal Zahran, Leaders Business Development Director.

The Senator met with start-ups and individuals across the ecosystem at various stages of development, and learnt about their successes, challenges and opportunities. The visit ended with a round table discussion including USAID staff, USAID/Compete, Ibtikar fund, Leaders Co-founder, and representatives of ICT companies. The Senator asked the representatives on what their “pain-points” were and they each explained some of their difficulties, particularly in financing. The Senator was keen on bringing awareness, including through social media, to some of their issues including the lack of PayPal services in Palestine.

During the base period, USAID/Compete supported the development of a new accelerator, eZone, by providing mentorship, consultancies, and short term employment for startups. USAID’s support of eZone has enabled an environment attracting foreign companies to open offices in West Bank. Recently, USAID/Compete has awarded a grant to LEADERS to support them in adding a program manager for a defined period of time who will build their business development capacity that in turn will support revenue generation, and assist with the operational costs of the technology park. The grant will also support Leaders in becoming operationally sustainable by 2017.


Peter Riley – USAID/WBG (standing) and Aisha Y. Salem, U.S. Patent & Trademark Office (USPTO) Intellectual Property Attaché for the Middle East and North Africa (MENA) (seated on right), provided an introduction to the workshop and an overview of Intellectual Property rights.

USAID partners with USPTO to strengthen Intellectual Property protections Representatives of the Palestinian private sector, start-ups and entrepreneurs participated in a workshop in Ramallah that focused on increasing expertise in issues related to different forms of intellectual property. The workshop was supported by the U.S Agency for International Development in cooperation with the United States Patent and Trademark Office. The workshop aimed at raising the awareness and knowledge of the Palestinian private sector in the benefits of adopting international intellectual property rights and enforcement policy strategies. The workshop (pictured right) included a number of presentations on issues related to intellectual property, trademarks, patents, and the protection of ideas with the aim of enhancing the ability of Palestinian businesses to comprehend, analyze, and evaluate intellectual property rights and enforcement issues and highlight major resources available to entrepreneurs.

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CHAPTER THREE: SUMMARY OF PROGRESS BY SECTOR

WEST BANK

AGRIBUSINESS

Enhancing Market Access Firm Level Technical Assistance – USAID/Compete has seen significant progress due to its new initiative to provide technical assistance to exporting and non-exporting firms in the agribusiness sector to increase financial, management, and marketing capacity. All firms undergo an assessment and, if selected, receive targeted support under three components: technical assistance, provision of equipment and inputs, and workforce development. Other sectors (ICT, Tourism, Stone and Marble) also follow this process.

Al Hathnawi Al Hathnawi General Trade Company, a seed and spice packing company upgraded their production facilities with USAID/Compete support to stimulate the local market by providing new products: herb and seed oils. As a result, over 100 local suppliers are benefiting from Al Hathnawi’s need for large quantities of local produce for raw materials. USAID is also supporting the company to adopt ISO22000 food safety standards. With USAID support, the GAP assessment has been completed and Al-Hithnawi Company is currently in the process of adapting the system with the support of the service provider.

Haifa Company for Agricultural Marketing Haifa company for Agricultural Marketing is a private shareholding firm founded 2014 in Aqaba, owned by Jafar and Ziad Abu Al-Zait, owners of Yaffa Limited in the UK - a company that has been marketing Palestinian agricultural products in more than 13 different countries. Yaffa was using a collection of local suppliers in the West Bank to source its products of olive oil, olives, dates, thyme (za’atar), sage, chili sauce, black seed oil and paste, green wheat (freekeh), and sumac. Haifa Company was established to become the main supplier for Yaffa Company to ensure the consistency in quality of supplied products and to adhere to delivery dates. Haifa Company is establishing a packing facility of 1500 square meters comprised of four floors to store and pack the different products, with the basement used as a cold room for storage of fresh herbs. In July, USAID/Compete signed an in kind grant to support Haifa Company in purchasing various pieces of equipment necessary for the packing house that are anticipated to increase their sales and exports by $3.5M annually, employ an additional 30 part time employees, introduce ten new or improved products and will facilitate their adoption of the British Retail Consortium standards (BRCS), a British system that is similar to ISO. In August a generator was delivered which will ensure that the machines procured will be operational at optimal levels around the clock.

The Project’s support includes stainless steel storage tanks for olive oil, filtration units for olive oil, semi-automatic filling machines, a PH testing station, shrink wrapping machines, vacuum sealing machine, laser printing/labeling machine, automatic packing machine for dry foods, stainless steel work-tops, fork-lift truck, pump trucks, air conditioning units. Arabbeh Oils Company USAID/Compete is providing Arabbeh Oils Company with an In-kind grant, signed this month, to purchase a harvesting machine, sieving machine, and gravity separator (also known as a thyme separation machine). In order to have a full production line, Arrabeh Company will purchase a drying machine as their contribution under this grant. Having a full production line will increase their intake of raw materials from local farmers, improve the quality of the products, and increase production and sales.


Atoof Company for Trade and Agriculture USAID/Compete signed a grant with Atoof Company to assist it in purchasing one cooling room system, through which it is expected that their farmers will be able to increase their products for export and thus sales by approximately $200,000, as well as ensure higher quality production in the post-harvest phase. Atoof finished the installation of the barracks and completed the installation of a cooling room. The cooling room, with a capacity of 250 tons, will be utilized during the upcoming season.

Daraghmeh Company Daraghmeh Company is currently involved in the production of fresh herbs within 120 dunums of green houses, in addition to 300 dunums of open fields planted with vegetables. The company is planning to expand their fresh herb production in 2016, enabling them to cultivate baby fresh herbs. A grant was signed with Daraghmeh as part of the Project’s baby herb program (Micro-herbs) to develop a baby herb farm. The cooling room and packing house was installed during August and production units including sowing lines will be installed between September and October for the baby herbs production unit. Jerashi Company USAID/Compete supported Jerashi Company with a grant to start the first flexible packaging factory in the West Bank using pouching technology. The Jerashi Company installed the new equipment that is now operational and is enabling them to print on plastic, opening up new business opportunities. This is the first time such service is now available for local clients. During the month of July, Jersahi Company reached out to USAID/Compete’s beneficiaries to network and to offer their services. Jerashi and during August they have been in the process of adapting to ISO22000. Next month an internal audit will be conducted to prepare the company for the external body audit which is expected to take place in October. Mu’ta Mills Trading Company Mu’ta Mills Trading Company, established in 2012 in Kufr Jamal, Qalqily, primarily produces dried thyme. The products were prepared and packaged using outdated and simple means. Previously in the West Bank, thyme was produced, dried, and removed from the stems locally, and then exported to Jordan where it was mixed with additional spices producing the final product – za’atar. This final value-added product was then sold in Jordan and exported to the Gulf. USAID/Compete delivered and installed a new packaging machine to Mu’ta Mills to improve the product quality and their packaging capabilities through the introduction of this new technology. The packing line is currently operational. The grant which includes a thyme packaging line will enable the company, as well as other thyme producers, to produce high quality finished products, in appealing and modern packaging, to access new export markets and to export full za’atar to Jordan and the Gulf, especially that there is a za’atar market shortage due to lost supply from Syria, following the onset of the 2012 civil war. Demand remains primarily from Jordan and the Gulf. Mushroom House Mushroom House is a newly established company owned by three women and a man. They plan first to produce mushroom mycelium and then mushrooms. Currently mushroom farmers in the West Bank face difficulties due to their dependency on the seed mycelium that must be imported from Holland where delays in shipment negatively affect production. USAID/Compete is filling the gap in the value chain by specifically targeting the missing joints in the chain, a lab, sterilization unit for compost and mycelium production. The lab will not only provide mycelium for Mushroom House, but will also supply other local mushroom growers. The equipment was delivered and installed; the remaining components have been cleared, also delivered and installed, with expected production to start in September. Mushroom House also began operations to produce compost in house, a three stage process, in which they are currently in the first phase.

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Qitaf Company- Jiftlek Qitaf activities include the cultivation of dates. Current Qitaf clients are Palestinians, Israeli, French, and Turkish. Qitaf plans to expand their farming projects to produce more varieties, and reach the British, South African, and Far East markets. Future plans of procuring, packing, and marketing seedless grapes will require Qitaf to acquire GLOBALGAP and FSSC 22000 Food Safety System Certification. FSSC 22000 is based on ISO 22000 standards and ensures the visibility of food safety management up and down the supply chain. USAID/Compete is supporting Qitaf to acquire both systems. Based on GLOBALGAP assessment results, Qitaf continues its work on adapting their systems in order to be aligned with international standards. Qitaf completed an internal audit in August in preparation for the external audit to take place in September. West Bank Salt Company (WBS) The USAID/Compete Project provided a grant to procure a salt packaging machine which will target two sectors: salt and fresh herbs. Following the delivery of the packaging equipment, the vendor sent a specialized team who are currently training West Bank Salt employees on the packing line, which has been fully operational from the first week of August. The equipment will enable WBS to produce consumer friendly sizes of packaged salt. In addition, WBS will reach out to herb producers and provide a facility to package excess herbs. Al Zaraoun Al Arab Al Zaraoun Al Arab produces, packages, and markets dates. The Project signed an LOA to support Al Zaraoun in adopting GLOBALGAP and FSSC 22000 systems and achieve certification. The Project signed a purchase order for a GLOBALGAP and FSSC service provider which conducted a GAP assessment towards the goal of building a system. Currently the company is making the necessary preparations, including internal and external audits and it is expected that during the harvesting season (by September) these systems will be operational and Al Zaraoun will be compliant with GLOBALGAP and FSSC 22000 systems.

Strengthening High Value-Added Products, Services, & Technologies Launching Pilot Projects – USAID/Compete is assisting high value-added subsectors in launching pilot programs with new technology and/or new crops to increase productivity and meet market demands. The Project had previously scaled up the strawberry sub-sector and more recently, based on assessment results had launched two programs to scale up the baby cucumber subsector and the grapes subsector. For updates regarding the baby herb pilot production, see update above under FLAP – Daraghmeh.

Baby Cucumber Subsector USAID is supporting farmers and aggregators across the baby cucumber value chain. Having assisted Kufr Dan Cooperative in developing post-harvest facilities for sorting and storing, the capacity to take on more produce from farmers is now higher. Additionally, results captured from pilot with Mohammad Fahmi Mar’i, a baby cucumber farmer, who installed three types of insect netting pointed towards a positive impact on productivity of baby cucumbers. The project disseminated these results to baby cucumber farmers from Jenin and Tubas area, and consequently announced the scalability program, upon which it received one-hundred and one (101) applications. The Project in its first phase of the program visited 72 farmers and signed 47 LOAs covering 75 dunums as a first batch. Netting was delievered and installed for all 47 farmers during August. For the second phase the Project visited an additional 25 farmers and approved working with 24 of them. It is expected to start delivering the netting beginning of August; the roof insect netting that replaces the plastic cover will increase the productivity by one ton per dunum. The Project will also link the new comers to the program with Zadona Company after having linked it with Kufr Dan Cooperative whereby the Company bought ten tons as a trial shipment. Zadona plans to use between 200 – 300 tons of baby cucumbers during the next season and Compete will link the company with program participants for their mutual benefit.


Grape Subsector USAID/Compete is looking into the feasibility of introducing seedless grape value chains, and introducing high value production patterns in the Southern West Bank. Towards this aim, the Project designed and developed a program to enhance and support the grape value chain in the West Bank centered on the Hebron and Bethlehem governorates. The Project conducted a workshop with stakeholders of the sub-sector, 70 in attendance, in early June which provided an opportunity to hear from grape farmers and stakeholders, to validate assumptions made in the program design. The workshop also introduced the program to farmers and explained the ways they can apply for support. The program seeks to address some of the key challenges along the grape value chain. Five of these challenges will be addressed in this program; lack of seedless varieties, low quality and lack of high value production patterns, weak processing facilities, market access and limited international brand awareness. By the end of August 691 applications to the program were received. The table below illustrates in which areas farmers applied for assistance. Site visits were conducted to 422 farmers and 52 were approved for signing LOAs which will bring a total land area to benefit from the program to 170 dunums. The LOAs are expected to be signed in the first week of September. Program Irrigation Hanging System Grape Production Seedless Export Market Number of Applicants

18 617 18 34 3

Strawberry Scalability Program - USAID/Compete is working to scale-up strawberry production in the West Bank by replicating the demonstration farm models developed by the Project in early 2015 to introduce new technologies using hanging and computerized irrigation systems. The outcome of these demonstrations was favorable in terms of productivity and profitability; therefore, USAID/Compete is sharing its findings publicly and presenting a business opportunity for West Bank farmers and investors.

By the end of July sixteen (16) farmers from Jenin, Tulkarem and Tubas signed Letters of Agreement with USAID/Compete joining the Projects’ Strawberry Scalability Program bringing the total amount of land towards the production of high quality strawberries to 60 dunums. The farmers readied their farms for the Spring/Summer season. Participating farmers in Jenin and Tulkarem, have received computerized irrigation systems and other related agriculture inputs, including PVC gutters, polystyrene containers, and soil. It is worth mentioning that one farmer, who joined the program in May, Sana Jalamneh, is a graduate of the Projects’ Agronomist Capacity Building Program through which her interest in strawberry farming took hold. As of August all farmers received equipment and the farmers started planting seedlings for the upcoming season.

Introducing New Water Sources / Enhancing Access to Quality Water – USAID is pursuing treated waste water (TWW), a previously untapped resource in the West Bank, as a solution to water shortages, the largest impediment for agricultural production. Reuse of TWW is one of the few feasible means of increasing water resources and offers significant opportunity to introduce new crops for export. USAID/Compete has been working closely with the Ministry of Agriculture (MOA) to address the challenge of access to quality water for agricultural irrigation, particularly in Area C. Compete is currently designing a 135 dunums pilot project using TWW from Deir Sharaf Plant.

Deir Sharaf TWW USAID/Compete is supporting the design and expansion of the Deir Sharaf TWW plant in Nablus to provide an alternative water source for farmers in the area. Following the submission of preliminary designs of the Deir Sharaf project to the Israeli Civil administration (CA), a preliminary permit to irrigate 7000 dunums of farmland in Area C was issued by the CA during this reporting period.

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Following consultations with other stakeholders, it was agreed that KFW will take on the implementation of the designed project.

Deir Sharaf Demonstration / Pilot Project USAID/Compete is currently working on establishing a 135 dunum demonstration site to introduce and adapt the practices of wastewater reuse for irrigated agriculture in Deir Sharaf. In January, several meetings were held with Nablus Municipality and Deir Sharaf Water Users Association in order to agree on initial designs and considerations and the beneficiary list (farmers) who will irrigate their agricultural products with the reclaimed water. Vendors have been identified to implement works. Implementation of the pilot project is expected to commence in September 2016. Twenty-four (25) farmers from Deir Sharaf were identified to participate in a pilot project utilizing a combined 135 dunums of land – all 25 farmers are now vetted and signed agreements with the farmers’ cooperative. USAID/Compete project is currently developing the grant agreement to be signed with both the Municipality of Nablus and Water Users Association. Tapping Unused Water Resources – USAID/Compete is beginning to work sector-wide with stakeholders, local authorities, and key actors to help them access and maximize the use of current water resources. This will increase irrigation to improve both the quality and quantity of agricultural products, transforming the Palestinian agribusiness sector into a globally competitive industry. The project will identify underutilized wells and transfer excess water to nearby areas including Area C, mainly in Tammoun Area.

Tammoun Project The Tammoun Project aims to transfer water from wells located in Ras Elfaraa and Al Nasarieh to the Al Baqea’ah plain to irrigate 4,500 dunums. Following the favorable results of the assessment report conducted in earlier stages, the preliminary designs were completed and submitted to CA for necessary approvals. In May a meeting was held with the CA where they recommended submitting an application form to the Israeli Palestinian Joint Water Committee (JWC), which was submitted by the Project accordingly. Currently, USAID/Compete is following up with the CA to expedite the approval process.

Planned Programs for the Next Period • Grape Program implementation • Baby Cucumber Program follow-up • Mushroom implementation


ICT

Enhancing Market Access Firm Level Technical Assistance Program

Export Market Development Program: USAID/Compete continues to support Palestinian ICT firms under the firm level technical assistance program to access new markets through a specialized three stages intervention– the Export Market Development Program (EMDP) to provide thorough market research and entry strategies to select Palestinian ICT firms. Recently the second iteration of the program was launched involving ten new ICT companies. During the month of July, the hired consultant started his assessment of seven companies and completed three assessments for I-Connect, MTC and Unit One. He provided these companies with strategic documents that explain niche service/target market and proposed plans to achieve desired expansion goals. It is expected that he will complete the remaining activities in September of 2016. Synergy Synergy is a new startup software company formed in late 2015, focusing on developing Enterprise Resource Planning (ERP) solutions based on the SAP Technology and Software development for specific IBM platforms in workflow management for the Industrial segment only. The company is investing in developing the skills of their employees in order to be ready for regional expansion. Under the supervision of SAP, Synergy formed a partnership with a bigger SAP partner in Jordan (ABS systems) to help the company obtain highly technical resources for project implementation, based on commercial terms. Synergy recruited 7 apprentices who completed the SAP training program with the support of USAID Compete project. The company placed four apprentices in one of its projects, a contract signed with Al-Jibrini dairy company to build an ERP solution using the SAP technology. The other three apprentices are currently working in Ramallah implementing local contracts that Synergy was able to secure. Axsos Axsos is a software house with offices in Ramallah and Germany. The company works mainly with the German market, providing staff augmentation, technical support, and customized software development. Axsos relies on apprenticeship programs to increase their workforce. They have a long term training program that aims to prepare programmers for the international market, which require high standards. USAID/Compete is supporting an apprenticeship program which will enable Axsos to build a qualified workforce, which will immediately affect the company’s profitability. The apprenticeship program started in April and currently seven (7) apprentices are developing software with the mentorship and guidance of the company. The apprenticeship program supported by the Project will run until September 2016.

Dragon FX The Project’s evaluation committee approved to sign an LOA with Dragon FX, a Ramallah based animation studio. The company launched in 2013 and since has secured a number of contracts from the local market as well as the production of an animation series for Aljazeera’s kids’ channel. The company signed an MOU with an Israeli animation studio called Snowball. Snowball is a contractor for major animation companies in international markets, such as Disney and Pixar, and has a pipeline of projects each year from which they wish to outsource to Dragon. Under this MOU Dragon and Snowball will cooperate to co-produce animation for international companies, as per the capacity Dragon can take on. The Project will support the company is increasing the number of staff and assist them in investing in equipment and training new employees. This will support the sector objectives of increasing the number of new markets accessed by assisted Palestinian ICT companies, and subsequently their percent

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Students discuss during their participation in the “Maturing and Pitching Skills” workshop that took place at AAUJ.

increase in sales. The apprenticeship program is in the preparation stage for the training courses and procurement of needed equipment.

Fostering Strategies to Improve Human Resources and Services Developing New Sector Services – USAID/Compete is developing new value chains in the market capacity to introduce services and tap the highly-skilled ICT workforce within the Palestinian software sector.

eGovernment to Improve Business Services USAID/Compete seeks to improve “eGov” services to reduce the burden of operational necessities, such as registrations, for Palestinian companies. Currently, the government relies largely on separate IT systems and manual operations, lagging behind most of the world using quicker technology-based systems. In partnership with the Palestinian IT Association (PITA), and in collaboration with the Office of the Quartet, USAID/Compete seeks to develop e-services and encourage policy changes to improve these resources for Palestinian companies and citizens, leaving more time to focus on growth. This partnership will result in many benefits such as improving services for Palestinian citizens, and most importantly developing the ICT sector to develop advanced solutions. An assessment and business analysis was completed for ten e-services to determine the best business model. A position paper was developed and presented to the council of Ministers.

To date, the Palestinian government endorsed the commencement of these 10 online public services as part of its efforts to shift to e-Government services. USAID/Compete hired a firm to produce RFP’s for the e-government services. In June the RFP was modified according to changes in the Scope of Work by the Ministry. The tender is expected to be out in early July, and the Project expects launch in August following selection. The project is expected to help companies involved launch into new markets with the experience gained in this project.

In July USAID/Compete evaluated the tender’s offers and a decision was taken in August to proceed. The Project is currently coordinating with the Ministry to sign the agreement with the vendor and an MOU with the Ministry.

Supporting Enablers and Service Providers to Address Impediments Creating a Technical Transfer Company IBDAA (Component B) - USAID/Compete is bridging a gap between academia and the private ICT sector through the establishment of a new tech transfer company. USAID/Compete has partnered with four local universities to create the first technical transfer company (IBDAA) to promote research and development activities between the private sector and academia to help solve market failures and spur innovation among Palestinian youth. The four universities leading this initiative are, The Arab American University

(AAUJ), Najah National University (ANU), Polytechnic University (PPU),


and Al-Quds University. The four universities established and registered IBDAA as a company to run and manage a program that supports innovative project ideas that offer creative solutions to industrial problems and that capture market opportunities. During the month of August, IBDAA continued to conduct meetings and events including a “Maturing and Pitching Skills” workshop that took place at the Arab American University of Jenin (AAUJ).

Palestinian Internship Program (PIP) - The Palestinian Internship Program (PIP) works to address market failures related to Palestinian workforce development and high-tech employment by providing high-level internships for young graduates at start-up and multinational companies based in Israel. PIP concluded the third round and is currently in the implementation phase of the fourth cycle, during this reporting period PIP is engaged in the matching process between the interns and the hosting companies.

By providing these internships to young Palestinian professionals, PIP can provide a framework that helps keep Palestinian techies gain crucial professional skills by exposing them to a highly developed high-tech economy. PIP seeks to help young professionals “leapfrog” the current state of the Palestinian high-tech economy and to instill in them the know-how required to grow Palestinian companies

Startup Support Initiative – The USAID/Compete Project is planning on launching a startup support program. This program should provide small scale technical assistance packages to support; startup exposure, user acquisition, and branding graphics. So far the Project has finished consultations with stakeholders in the West Bank and Gaza and is now working on submitting a concept note. Initial design of the program has been completed and will be sent to USAID for approval. The project consulted with market stakeholders by conducting workshops with them to verify assumptions to best develop the concept design.

Planned Programs for the Next Period • Startup Support Initiative

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Ejada Company participated in a training program at SISTROM Company in Russia to learn techniques in forming tiles from molds. In the photo above are the molds used during the production process.

STONE AND MARBLE

Enhancing Market Access Firm Level Assistance Program Al-Haramein Company Al-Haramein is a stone producer located in Hebron’s Industrial Zone specializing in stone slabs and building stone. Currently they sell to Israeli and Jordanian markets and are looking to expand into the Gulf market. One of their main challenges is the high cost of electricity. The FLAP committee approved to support the company’s investment in equipment. Following the completion of the assessment of solar renewable energy, and the publishing of all tender documents and bill of quantities, USAID/Compete is currently undertaking the procurement of the solar renewable energy system under a cost share scheme. Delivery and installation of the system is expected to take place 4 months after the award of contract. To date bids have been received from vendors for the solar system. An internal evaluation of bids and a technical meeting with a solar consultant was conducted. An EDF was also submitted during August.

Al Omraniyeh Group Company for Jerusalem Stone While previous support to Al Omraniyeh included supporting their participation at trade shows, current USAID/Compete support includes ISO9001 accreditation. During this reporting period, the selected local service provider started the preparatory work for the accreditation and USAID/Compete continues to support the company for the third month with an apprenticeship program, whereby the company hired employees to develop a comprehensive product data sheet.

Antique Stone USAID/Compete is supporting Antique Stone Company through an in-kind grant to procure anew equipment that will transform stone pieces into aged antique stone in a variety of colors and patterns. The company which is based in Jenin, established in 2014, will be upgrading their outdated equipment and renovating the whole production facility. USAID/Compete started the procurement process, and it is expected that the machine will be delivered and installed within the next three months. Creative Business Solutions USAID/Compete is supporting Creative Business Solutions (CBS) with an in-kind grant that will support the company to create new products using stone waste. The company plans to produce artificial interior decorative stone, light weight concrete and exterior decorative stone. In order to achieve this, the company requires updated machinery and technology, which they will place in a new facility they are establishing to produce these products. From an environmental perspective, CBS’s project is considered a game changer in the industry and a pilot for other companies within the industry to replicate. The grant is expected to increase employment, sales and the number of new products using stone waste. USAID/Compete started the procurement process, and an Environmental Documentation Form (EDF) will be prepared in September for USAID approval.


Ejada Company Ejada is one of the young Palestinian stone companies in the south of the West Bank (Yatta) that is dedicated to developing new products using stone waste. Ejada carried out several tests on new product development and underwent a training course for new product development in Russia at SISTROM Technology Company that specializes in technology transfer for new product development. The training included technology in using stone waste in different forms including decorative work. The trainee (pictured right) returned from Russia and a procurement request was made to purchase the tile molds. Verona Marble and Industrial Investments Company USAID/Compete had recently supported the Company with a study on the Russian market in addition to support with marketing activities that include the development of a new logo and a high-end website. Currently Verona Marble Company is working with the service provider to finalize the company’s new logo and to start work on developing the new website. USAID/Compete approved further support to the company including their participation in the Marmomac trade show which will take place in September, 29th, 2016. In August a photo shoot took place as well as work on their logo to support marketing efforts. Moreover, the Project will cost share two market studies for the German and US markets, two markets that Verona is keen on targeting.

Strengthening High Value-Added Products, Services, & Technologies Sludge New Products and Facilities – USAID/Compete is addressing the issue of stone waste by supporting the gradual transformation of the industry towards the use of creative business solutions for ‘dry sludge’ and ‘liquid sludge’ - thereby creating commercially viable new products and creating positive practices that address environmental issues. Creating environmentally conscious and competitive new products will lead to business opportunities that could be targeted in the local and international market; USAID/Compete is working with several companies to develop new products, including Abu Kamil Automatic Block Factory who will be producing a unique product which is the light weight foam based concrete blocks using liquid slurry produced during the stone cutting process. Additionally, the Project is also supporting Ejada Company to produce tiles from stone waste, enabling their training, technology transfer and procurement of tiles molds.

Planned Programs for the Next Period • Training in Jordan and procurement of hardware and software for National Instruments lab

equipment

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TOURISM

Enhancing Market Access Firm Level Assistance Program

Diamond Hotel A privately owned hotel located in Bethlehem seeking 4 star ranking and expected to open its doors in August this year. The hotel has 94 rooms, 2 halls and one restaurant, 4 employees and is currently recruiting full staff. Diamond Hotel applied for USAID support to install a hotel management software system, and the FLAP committee approved their application to install the software which will help them control the hotel operations, take fast decisions especially during the peak season, and provide accurate reporting, including drill down data and sources. USAID support is expected to help Diamond hotel to increase their reservations and revenue per available rooms, streamline hotel management from reservations to maintenance, and enhance their operations. The procurement process is underway.

JTT JTT is a private ownership company, established in 2003, operating in inbound tourism and ticketing and is focused on pilgrimage market targeting the EU market. The company has 10 full time employees, and brings 14,000 inbound pilgrims a year, with a maximum capacity to bring 25,000/year JTT applied for USAID support to develop a new website and promotional materials to serve the Company’s existing and potential clients. The FLAP committee approved their application on cost share basis and will support them in their new logo development and in designing their brochure and high end website to enhance the company’s digital presence, provide price offers based on the selected tours, calculate the tours cost, offer online and payment solution to be fully integrated with the currently operating management software. In August an LOA was signed and the procurement process was underway.

Laila Tours and Travel Laila Tours have been providing quality tours and pilgrimages to the Holy Land, Jordan, and Egypt since 2006, and also provide outbound ticketing services for residents and visitors to the Holy Land. USAID/Compete is supporting Laila Tours by deploying new systems to manage and improve their financial capacities and sales plans. The Project recently approved a third round of assistance, this time focusing on supporting website development to enable online payment and booking solutions. In the past the Project assisted the company with translation of their website content from English and Arabic into Spanish and French to help enhance their outreach to the French and Spanish markets, two of their major client bases. The Project also supported Laila Tours participation in the Spanish FITUR trade show as well as the NTA convention and ETC conference in the USA. An LOA was signed with Laila Tours in August. Procurement for the website development has been finalized and the service provider selected. The Project signed a purchase order and a meeting with the service provider and beneficiary took place in August.

Sancta Maria Hotel Sancta Maria Hotel is located in Bethlehem and is being supported by the Project to enhance its organizational, management and marketing capacities. USAID/Compete signed an LOA for Sancta Maria to provide and install hospitality management software (HMS). The HMS was successfully installed and staff trained. In addition the Project will provide assistance in the design and production of marketing and promotional material. The Project is specifically supporting the development of Sancta Maria’s website and logo whereby work has been completed. The website has been completed and accepted by Sancta Maria Hotel and the Project will follow up with the hotel to bring the activity to a close.


Strengthening High Value-Added Products, Services, & Technologies Rehabilitating Urban Sites and Upgrading Tourism Infrastructure - Working to build the full “destination eco-system” for key tourism sites in the West Bank, USAID/Compete has improved several tourism sites and trails including urban rehabilitation works in important historical locations in Bethlehem, Burqin, Bethany, Battir, Beit Sahour, and Jericho. The current rehabilitation program includes 4 areas, Burqin, Battir, Beit Sahour and Hebron. USAID/Compete signed a contract with the Centre for Cultural Heritage Preservation (CCHP) to develop the designs for building restoration and the urban rehabilitation projects in Battir, Bait Sahour, Burqin, and Hebron. CCHP completed all the designs for the implementation phase, six companies were shortlisted and the qualifying companies will implement renovation works. Procurement documents were prepared and RFPs issued, and proposals submitted for the rehabilitation of Burqin Historic Center, and the restoration of two historic buildings in Beit Sahour that will be used as a handicraft village, and an Information Center. Contracts will be awarded for these three interventions to start the implementation. In addition, it is expected and the RFPs for the remaining projects of Battir and Hebron were issued however shortlisted companies did not respond until further notice from the contractor’s union providing the go ahead to submit bids.

Develop/ upgrade a commercialized tourist infrastructure Tourism – USAID/Compete is working to develop commercial visitor infrastructure. The Project supported Bethlehem Municipality with the procurement of a large tent that would cover Manger Square and allow the Municipality to organize events any time of year and under any kind of weather. USAID/Compete completed the procurement process and signed the contract with the identified vendor who submitted shop drawings (implementation designs). Installation of the structure was underway this month and will be completed in September.

Fostering Strategies to Improve Human Resources and Services Supporting a Hospitality School – In conjunction with the curriculum developed for Bethlehem University, USAID/Compete developed plans for a Hospitality School modeled after the Amon Hotel School in Amman, Jordan. Plans for the school incorporate key findings from previous assessments, including geographic demand. The school will increase industry standards and the attractiveness of careers in the hospitality sector to Palestinians.

During quarter one of this fiscal year a grant was signed with Bethlehem University to start the development of an architectural design overview of the hospitality training school at Bethlehem University’s Mount David site. Up to date, five milestones were completed and approved; structural assessments and investigation, a detailed survey of the building, a project work plan, a concept design and a final draft detailed design, for the hospitality school. USAID/Compete will revise the draft detailed designed and provide feedback.

Planned Programs and Events for the Next Period • Finalize and issue the RFPs for the implementation of Battir and Hebron project once contractor

union issue is resolved • Award the contracts for implementation of renovation works for Burqin and Beit Sahour projects

once contractor union issue is resolved • Follow-up on the implementation of West Bank approved applications • Install the Bethlehem Tent

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CROSS CUTTING

Project Tourism and Agriculture Sectors Coordinate Efforts to Assist Battir Farmers The Project received a request from farmers in the Battir area to support them in growing their renowned eggplants that can cope with soil borne diseases. The Project recommended the farmers receive grafted seedlings and connected them with Abu Rub Nursery which in turn donated 5000 seedlings for grafting to the Battir farmers. The nursery is keen that the positive results of this initiative will lead to a promotion of the nursery and bring in more business. The village council representing the interest of farmers and residents requested assistance to support the site for irrigation while making sure the protected ancient terraces would not be affected. The Projects’ Tourism and Agriculture sectors worked together towards making this activity possible. In the past USAID/Compete supported Abu Rub in attaining GLOBALGAP certification making Abu Rub Nursery the first Palestinian nursery to be certified by GLOBALGAP. The design to maintain and restore the water cannels and terraces has been completed and the RFP will be issued once in September 2016. Palestinian Construction Guide The company provides services to the construction sector in general and is identifying the Stone and Marble industry as one of the major target sectors for their services. Some of these services include connecting companies with clients, advertising, and business service support through a website and online services. The Project is supporting the company through the ICT and Stone and Marble Sector, and has approved support to upgrade their website so that they will be better equipped to provide essential services to subscribed companies. In addition, marketing personnel will be hired through this intervention. The vendor has been identified, and a kick off meeting took place and work has been ongoing during this month on the website.

Private Sector-Academia Technology Innovation Program Over the course of the Project, USAID/Compete has discerned that across sectors, there is consistent, demand for high-quality machinery and equipment to increase efficiency of production of goods for local and export markets. Local technical universities do not yet have the resources or capacity to foster world-class training and opportunities for rising engineers to learn state-of-the-art tools to address real world problems. The private sector typically turns to international imports for new and innovative equipment to address efficiency challenges across the production value chain, and for the replacement of trademarked spare parts for this equipment, at high cost. USAID/Compete entered a partnership with National Instruments (NI) - a US-based firm developing automated test equipment and virtual instrumentation software - to fill this gap and build the capacity of local universities around machine design and manufacturing to improve the competitiveness of value chains of key sectors on the Compete Project. USAID/Compete identified Palestine Polytechnic University (PPU) in Hebron as its academic partner for this project. While NI has agreed to provide technical training, mentoring and certifications, USAID/Compete will fund and facilitate the full operation through the lifetime of the extended Project. Key sectors that could benefit include agriculture, tourism, information and communications technology (ICT), stone and marble, food processing, and machine producers. Additional consideration will be made for the development of a maker’s or fabrication lab in partnership with local universities, to achieve the same goal of workforce development to sustainably address local industry challenges.


GAZA The aim of USAID/Compete’s support in Gaza is for the Palestinian private sector to strengthen its competitiveness and expand into new markets locally, regionally, and internationally in key sectors essential to the future prosperity of the Gazan economy. Since September 2015, the Project focused on the design of major transformative initiatives in the agriculture, fishing, ICT, and tourism sectors. From January 2016 onwards the Project has made progress in accelerating the roll out of programming and activities aimed at addressing years of limited development in an isolated economy. For a comprehensive list of progress to date please refer to the Gaza Ongoing Activity Report (Annex A). Firm Level Technical Assistance – The Firm Level Technical Assistance Program in Gaza was officially launched on September 8, 2015. USAID/Compete continued to receive and assess new applications under FLAP. To date, 1303 applications were received since the beginning of the Gaza program [September]. The pipeline is distributed as follows:

Sector Program Approved Cases Rejected Cases Totals

Ag

FLAP 5 203 271 Strawberry 92 0 197 Fresh Vegetables 65 0 203 Fresh Herbs 19 0 196 Fresh Vegetables Expansion 51 0 124

Wells Program 0 0 44 Ag Totals 232 203 1035

Fish 4 1 21 Furniture 19 2 74

ICT 9 32 85 Tourism 5 27 32 Garment 20 0 56

Totals 289 265 1303

Visits and Meetings August 2016

• In August 2016, the COP visit Gaza to meet with beneficiaries and meet with staff at the Gaza office. His visit included meeting with Eid Siyyam and Husny Shihadeh, solar system vendors, Kuhail Fish Farm, Al Bahar fish farm, date growers and palm tree associations, vegetable farmers as well as representatives of furniture and garment companies. A member of the procurement team adjoined the COP’s visit to follow up with beneficiaries’ needs and procurement processes.

• In August 2016, the Grants Manager visited Gazan Fresh Herbs farmers to sign 19 LOAs with them and to follow up with applicants. A vendor was visited to inspect samples of materials to be provided to fresh herbs farmers. Meetings also took place with strawberry farmers to assist in completion of activity close out reports and sign the final handover documents. The Grants Manager also met with Kuhail Fish farm to follow up on progress with the project and oversee the installation of the solar system. Al Bahar fish farm was also visited as well as Husny Shihadeh to follow up with construction of the cooling room.

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• In August 2016, the Agriculture Specialist completed his visit to Eid Syam and Mahmoud Ikhail strawberry farms, whereby a technical training was conducted for four (4) agronomists and six (6) workers who are working in the production of strawberries using the hanging system. The two farms started producing the seedlings and planted them this month. The Agriculture Specialist also met with beneficiaries from the vegetable program.

AGRIBUSINESS

Cross Cutting: As part of USAID/Compete’s plan to address water challenges affecting the agriculture sector, a specialized wells project has been designed to use solar system on 40 wells replacing the inconsistent electricity and the costly fuel. To date, the Project identified 60 potential beneficiaries with fully-licensed wells. Forty-four of these have been shortlisted to receive support, to date 43 have been vetted. Potential vendors for the installation of the wells systems were identified and evaluations of the bids were completed in May 2016; the vendor has been selected and the Project is now awaiting Israeli approval for equipment entry to Gaza. A detailed design to start using the solar energy for the wells has been finalized and procurement will take place during next reporting period. This initiative will provide alternative energy options to enable 300 farmers working in the three export sub sectors [strawberry, herbs, and vegetables] to cultivate over 200 hectares. The Solar water Pump System will enable farmers to:

• Have stable and continuous electricity to operate the wells • Reduce input costs (Fuel/electricity) and thus produce at competitive prices • Have sustainable water for irrigation thus enhancing the quality of produce • Compete in export markets

Fresh Herbs USAID/Compete conducted meetings with two Israeli export companies, Arava Export Growers and Viva Farmers, both showed great interest in buying Gaza herbs production for export. The estimated demand by the two companies is about 300 dunums. The market research confirms the growth potential and viability of this value chain and the current 30 dunums of cultivated land offer high potential for a scalability program to increase the production by at least 100 dunums by the coming seasons. During quarter two of fiscal year five, the Project announced the scalability high-value production patterns program and 196 applications were received - covering over 700 dunums. From these applications 19 farmers were approved (covering 77 dunums) and the Project signed LOAs with 10 of these approved farmers. Procurement of agricultural inputs took place [netting, green houses, irrigation pipes etc.] and installation began in August for the 10 farmers who signed LOAs which cover a total area of 50 dunums. The installation will be completed in September. Also in September, the remaining 50 dunums will be identified to reach the target of 100 dunums for assistance. Vegetables Introduce New Production Patterns The USAID/Compete Project aims to support tomato and pepper farmers to export to the Gulf market. In order to achieve this, the quality of produce must increase. USAID/Compete plans to introduce netting to increase the production period and improve quality and also enhance post-harvest packing houses and cooling rooms to ensure optimal storage of vegetable products prior to shipment. For example, farmers need to replace plastic covers of greenhouses with netting, which will ensure higher yields and better quality due to improved ventilation. The Gulf market is more lucrative in the summer period, as summer is the off season for the Gulf region. For farmers to be able to produce in the summer period they need to change their current pattern of production.


An electrical generator was supplied to Husny Shihadeh to ensure that the cooling facilities have a constant and steady supply of electricity.

To date, and following the announcement of the program 203 applications were received covering over 750 dunums, and USAID/Compete Project signed LOAs with 65 farmers covering 234 dunums to join the vegetable subsector high-value production patterns program. Netting was installed across 234 dunums benefiting 65 farmers so far. USAID/Compete’s cost share covers 143.4 dunums out of the 219 netted dunums. Upon the high demand from farmers to expand the program, on 16 June 2016, USAID/Compete announced a second phase with an additional 200 dunums. In response the Project received 144 new applications, and with interested applicants from the first phase, making a total of 193 applications. Of these 82 were vetted and compliant covering 288 dunums and 51 farmers were approved by the committee covering 188.6 dunums. Four LOAs were signed so far. The second phase for netting will commence in March 2017. Enhance Post-harvest The Project identified and approved working with four export companies that buy from participating farmers, storing around 4,160 tons. A fifth has withdrawn as they did not comply with USAID requirements. The cold storage facilities will ensure products collected by participating farmers will be refrigerated and the cold chain maintained enabling export. Husny Shihadeh and Sons Company for General Trading - Husny Shihadeh, was provided with a cooling room, which will benefit a large number of farmers in Gaza. The aim of this grant is to assist Husny Shihadeh Company via purchasing two refrigeration units for their proposed cooling rooms. Supporting this activity will address the currently limited access to export markets (especially Israel and the West Bank) and the widespread lack of cold chain facilities throughout Gaza, thus strengthening existing high-value agricultural subsectors. The capacity of the cold storage facilities is 1,060 tons. A purchase order was signed with Husny Shihadeh and the panels and refrigeration system installed. Bawasel Al Wifaq - USAID/Compete plans to support Bawasel Al Wifaq Company in providing cooling facilities, storing around 700 tons. The cold storage facilities will ensure products collected by participating farmers will be refrigerated and the cold chain maintained enabling export. The grant will be signed once finalizing the procurement process. Mahmoud Hamdan and Partner for Vegetables Trade [Abu Tayem] - USAID/Compete plans to support Abu Tayem Company in providing cooling room, storing around 800 tons. The cold storage facilities will ensure products collected by participating farmers will be refrigerated and the cold chain maintained enabling export. The grant will be signed once finalizing the procurement process. Strawberry Value Chain USAID/Compete intends to strengthen the strawberry sector in Gaza by introducing high value modes of production through technology, equipment and inputs, providing support to marketing firms, upgrading post-harvest facilities, introducing new processing facilities, and upgrading existing farms.

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The fishing sector has great potential with unmet demand in Gaza. USAID/Compete is assisting onshore and offshore fish farms in meeting that shortfall of supply to meet demand. Below is a picture of a plaque from Fish Fresh thanking USAID for its support to the firm and subsector.

Strawberries can be grown in open fields, single high span greenhouses, or in multi span greenhouses; to date all the strawberries in Gaza are planted in open fields. The findings of a financial analysis conducted by USAID/Compete this year have shown that single span high greenhouses are more cost effective and will produce a greater return over the multi span greenhouse patterns. Furthermore, the single span high greenhouse patterns allow easy reallocation in case the soil deteriorates on the plot on which it is installed. USAID/Compete has started the implementation phase of introducing new strawberry production patterns for up to 100 dunums of single span high greenhouses; this intervention will increase the yield per dunum from three tons (open field) to four and a half tons (single span high greenhouse). It is expected that the volume of exports overall will increase from one to two tons, and the local volume from two to two and a half tons per dunum. This project has received interest from 196 farmers of which 93 completed full applications and submitted to FLAP. To date, 86 LOAs were signed with farmers, and eighty four (84) dunums of greenhouses were installed in Gaza for the strawberry farmers receiving support from USAID/Compete which includes netting for shade. Computerized Hanging Strawberry Pilot Project The Project has completed a pilot project that aims to ensure the feasibility of hanging strawberry farms in relation to Gaza’s specific economy and climate. Eid Ahmad Deeb Siyam and Mahmoud Ahmad Saled Ikhlil added three (3) dunums each to the strawberry pilot project. The hanging systems for the two farms were installed and the seedlings process commenced with the seedlings planted in August for the next season starting in September.

FISHING USAID/Compete continues to support scaling up the fishing sector in Gaza by building the capacity of sea fishermen, scaling up onshore fish farms, and supporting the development of offshore fish farms.

Fish Fresh - Fish Fresh is the biggest onshore fish farm in Gaza, established in 2011 in the Khan Younis district. The company specializes in producing Denis fish (Sea Bream), with a production capacity of approximately 140 tons per year. USAID/Compete is supporting Fish Fresh to increase its production capacity by an additional 190 tons per year, which will increase its employment by 22 workers. USAID/Compete

installed aerators and an electricity generator increasing the quality of production and ensuring an uninterrupted power supply. The second back-up generator was delivered in July. Fish Fresh completed the required infrastructure upgrades including installation of water pools, greenhouses, water wells and leather lining. Operations in the new expansion farm commenced with the placement of imported fingerlings in one of the new pools with the fish expected


Al Bahar’s expansion project is in progress with many new pools currently under installation.

to reach maturity in September. Currently, Fish Fresh’s expansion has reached a capacity of 350 tons (1 million fingerlings) of which 300 tons are comprised of Denis fish and 50 tons of Sea Bass. The sales of new fish will start in November 2016. The firm has hired around a dozen new workers to manage the increased workload and additional workers will be hired once the farm is fully operational at maximum capacity. USAID/Compete plans to hire a consultant to train the beneficiary in farm management systems with strategies and methods to keep the farm productive, sustainable, healthy and profitable. Kuhail Fish Farm - USAID/Compete is assisting Kuhail Fish Farm through an in-kind grant to develop a fish hatchery for Denis fingerlings for the benefit of the Gaza Strip fish farming value chain, as well as introduce new alternative energy solutions (solar) to address persistent electricity disruptions that effect consistent production. Following receipt of Israeli approval to bring in the solar system needed for operation of the fingerlings lab at Kuhail Fish Farm, which will support onshore fisheries in Gaza by ensuring a local – versus imported – supply, the system was delivered to Gaza and installed during August. The supported fingerlings lab started supplying Fish Fresh with fingerlings, and recently Kuhail signed an agreement with Fish Fresh whereby he will supply the latter with 100,000 fingerlings monthly. Kuhail has hired two additional workers to support the fingerlings lab. Al Bahar Fish Farm - The second biggest onshore fish farm which was established in 2015 near the coastal road of southern Gaza. The company specializes in producing sea bream “Denis” fish, its production capacity is around 100 tons per year. The local market is deemed the main market for the company. USAID/Compete is supporting Al Bahar to increase its production capacity by an additional 80 tons per year, and will increase its employment by 5 workers. During this reporting period, Al Bahar fish farm made progress in preparing the land and infrastructure to expand its facilities.

Abu Alnaja - Abu Alnaja and Associates Company, established in 1993 is planning to expand their business to include offshore fish (Denis) production by introducing Tension Leg Cages (TLC) technology. This new technology will enable Abu Alnaja to reduce the running and investment cost. On an offshore site, Abu Alnaja will need less electricity and will not require the processes and infrastructure for aeration. This company will be the first to employ this technology in Gaza, and is securing the permit from the Israeli Coordination and Liaison Administration (CLA) to operate within a certain distance from the shoreline. USAID/Compete is supporting Abu Alnaja in conducting a business plan for offshore fish farms and providing diving training courses Skilled divers are required for this type of offshore fishing as they set up the cages, sink them, provide feed, and extract the fish. An LOA was signed with the beneficiary that includes Project support for a business plan and training in diving, specifically for fish farms. The purchase order (PO) to conduct the business plan was signed and following the completion EDF that took place in July, it is expected that the business plan will be completed in early September. The training course will commence once CLA approval is granted.

ICT The mandate of USAID/Compete’s work in the ICT sector in Gaza is to increase the competiveness of the sector to facilitate regional and international expansion and increase the number of new entrants in

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the software sector. Strategic priorities will center on providing technical assistance to stabilize operations; enhancing access to market; strengthening the capacity of targeted firms/sectors to produce high value products and services; developing workforce skills and introducing new technologies; and providing business enhancement and institutional development support. USAID/Compete has received eighty-five (85) ICT applications for firm level assistance from Gaza. Thirty companies have been assessed. Nine applications have been approved to date, with LOAs signed with Developers Plus, Dalata Code and three other clients (more information on the companies below). For Developers Plus the activity was completed with a solar system installed and is providing the company with a steady supply of electricity enabling a normal 8 hour per day operation. Two companies, MTC and Unit One enrolled in Compete’s ICT Export Market Development Program. The activity has been completed during this month. Dalata Code. Dalata Group Company for Consultancy (aka Dalata Code) is a software company based in Gaza. The company provides software development services for the local and international market through an anchor contract with 3hicag, identified through the Gazan diaspora population. Given their experience and the number of projects Dalata Code has worked on, the company decided to build upon their portfolio of software products, a trend common in service oriented companies, with the aim of diversifying its revenues and mitigating geopolitical risk. Dalata Code has approached the Compete Project for assistance in penetrating the Nigerian market to sell Elid there through an identified partner in Nigeria. Dalata Code has performed basic market research on Nigeria, and has a full business plan for releasing Elid there. USAID/Compete is assisting Dalata Code with 70% of the software licenses for various Amazon web services required for this activity, as well as 50% of various equipment items (Laptops, billing and quality control software); Dalata Code is procuring the remaining percentage of costs. This assistance is designed to improve Dalata Code's internal infrastructure and quality systems through the provision of equipment and strategic technical assistance. Compete's support will also help with finalizing the rollout of Elid on a production environment through Amazon hosting. Overall, this activity will contribute toward the sector objectives of increasing the percentage of sales in Palestinian ICT firms, the number of new markets accessed (Nigeria), and the number of new jobs created as a result of USG assistance. USAID/Compete started procuring the services and equipment as per the plan, and had delivered the equipment; the remaining activities including procurement of softare and Amazon hosting is underway with an expected closing date in September. 321 Boom. 321 Boom is a game startup from Gaza that has been registered since June 2015. The co-founders developed a concept character called Rayru, around whom they have built a game prototype. The team applied for a competition organized by USAID for best game prototypes during a sponsored high tech hub conference in 2013. Their entry won first prize, for which they received a commitment from USAID/Compete to provide technical assistance to build the first project. Currently the company has no proper management structure and little business or marketing knowledge, but does feature strong technical skills around gaming. As a new start up, 321Boom does not have the financial resources to start the project, as gaming is a long-tail business for which full financial maturity and sustainability may take some time. Under this LOA, USAID/Compete assisted 321Boom in building its first full game for mobile devices, and provided marketing assistance once 321 Boom has published its game on the relevant game app stores. Game development has been completed, USAID/Compete then assisted 321Boom to purchase advertisements on relevant websites like Amazon, GooglePlay, and the iTunes store, as well as


The Mac Lab delivered and installed in August will allow Vision Plus to introduce new training skills and topics in Gaza and also provide training of trainer courses.

membership subscription to a gaming organization to help them continue to stay informed and engaged with their market. USAID/Compete purchased the membership for GameUnity in order to enable 321 Boom to publish the game on the application stores. 5QHQH. The Company works in the development of entertainment and comedy in Arabic, and had requested support from USAID/Compete project. The Project signed an LOA with 5QHQH to support it in its marketing activities. USAID/Compete is continuing its support to the company with their marketing activities. NetStream. NetStream is a limited private stakeholder company led by Muataz Mushtaha, it is an Internet Service Provider (ISP) working in Gaza among seven other ISPs. USAID/Compete signed an LOA with NetStream to assist the company to develop their service by generating a business plan to measure the feasibility of developing new services. The business plan was produced and results were favorable for establishing the call center unit. Currently, NetStream are in talks with USAID/Compete towards possible support towards their expansion plan. Vision Plus. Vision Plus is a training center in Gaza that has been operating since 2011. The company provides local training services in Gaza on Cisco, Microsoft and other IT topics. They also provide exams and certifications for young trainees. The company’s customers are mainly youth who are trying to find employment in the local market. USAID/Compete will assist Vision Plus in opening a new MAC lab to introduce new training skills and topics in Gaza Strip as well as providing certification and training for trainers. The Project will also assist them in becoming an Apple certified training center – the first in the West Bank and Gaza. The equipment was delivered and installed in August. USAID/Compete is currently in the process of conducting a niche market assessment and determination. This assessment aims at creating a detailed scope of work for a market research firm as part of the Export Market

Development Program, to in turn help Vision Plus develop the right plans for the desired software division. This support will assist the company in making informed decision regarding the international market and identifying the best setup for conducting international business.

UnitOne. UnitOne is a Business Process Outsourcing (BPO) company based out of Gaza since 2011. Significant portions of their staff are formed from their dedicated unit for women, which has around 50 people working in data entry and content translation. UnitOne has a small software division that has been providing services to the UAE, Netherlands, and US markets, and recently received interest from INTEL (Jerusalem) to start doing translation work. UnitOne is cooperating with IT companies in the West Bank to provide backup offices and counter instability in the Strip. UnitOne has future plans to open an office in Jordan. USAID/Compete assisted UnitOne via a professional consultant who conducted a niche market assessment and determination and the results were shared with the company. Compete will follow up with the copany to determine any required technical support. Modern Tech Company [MTC]. MTC is an ICT company established in 1994. The company works in website development and hosting, SMS, and specific software packages for certain industries. The

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company is evolving from a service-oriented to product-based company by leveraging the experience and network of customers they have built over the years. USAID/Compete will enroll the MTC Company in the Export Market Development Program by conducting an export market assessment for MTC’s product named “Cloudy”, which is an operation tool for collaboration. The assistance aims to identify areas of market expansion for MTC and assist the company in making informed decisions regarding their international expansion. USAID/Compete signed an LoA, with MTC, and during this reporting period, the assessment was conducted and completed, the results were shared with the company. ICT Warehouse. ICT Warehouse for IT Services is a software company registered out of Gaza. Since 2011 the company worked on delivering software projects for the local market. Slowly, the company shifted to European markets with the assistance of other donors. The company managed to establish linkages with several markets in Europe (Croatia, France, Austria, Spain and now the Company wants to diversify its revenue streams and move from its current 100% service industry revenue. After conducting thorough research, ICT Warehouse wants to get into the Sony PlayStation Arabization market. Sony introduced Arabic support in early 2015 and at present there are no PSP games that have Arabic characters. ICT Warehouse plans to become a provider of Arabic characters for PSP game developers. The end market is in the MENA region, but ICT warehouse will be working with game developers that are based in Europe and the US. USAID/Compete, through a professional consultant, will support the company in conducting a niche market assessment and determination. This assessment will result in a detailed scope of work for a market research firm as part of the Export Market Development Program. Vetting for this company was expedited and an LOA will be signed as soon as vetting is received. Gaza Gateway Gaza Gateway used to be a department within UNRWA working on implementing ICT projects for UNRWA, and the department was spun off as a private sector company in late 2015. It is expected that Gaza Gateway will become a significant employment generator among youth in the Strip. USAID/Compete signed a grant agreement with Gaza Gateway in July 2016 to help build their internal organizational capacity to become a robust outsourcing company on the regional level. Compete’s intervention includes capacity building for senior management and a company assessment and business plan. The assessment is in the process and will be competed in September 2016.

FURNITURE Seventy-four (74) applications have been received since the beginning of the Gaza program, 20 of which were selected in cooperation with the Palestinian Wood Industries Union in Novembers 2015 for potential engagement. These 20 firms are the top exporters amongst the union members, based on the export volume and export potential.

Based on the Israeli government’s decision in October 2014 to ease economic restrictions on the Gaza Strip, a needs assessment was conducted with the 20 export-ready firms to assess their sales and exports to the Israeli and West Bank markets, partnerships, production capacity, material requirements, and marketing information. However, in September 2015, the Israeli authorities again placed increased restrictions on the type of solid wood allowed into Gaza [from pieces 2.5 cm in thickness and 20-25 cm in width, to 1 cm thickness and 5 cm width]. A quick assessment of the dual-use restrictions list as relate to the 20 firms production requirements was conducted by Compete and submitted to CLA and USAID. The assessment indicated that no firm is able to operate with wood at 1 cm thickness, as this undermines the products’ quality and increases production costs, leading to low competitive advantages against regional producers. Thus, engagement with this sector is on a limited basis until facilitation has


been made via the international community to allow the entrance of the required raw materials into Gaza.

Despite these challenges, Compete has discovered there is potential to work with some companies that are specialized in producing baby/children’s furniture, and are able to utilize smaller pieces of wood through special coordination.

Institutional level: Wood Industries Union USAID/Compete completed an institutional assessment for the Palestinian Wood and Industries Union that obtained baseline information on the unions’ operating environment and identified the strategic and operational challenges facing the aforementioned unions. In order to enhance the capacity of the Wood union to provide better services to its members, Compete will support the union in revising the union strategic plans, governance policies, operational plan, monitoring system as well as the accounting system in addition to hiring one accountant to manage the system. Compete will also support the union in market presence in the West Bank and in developing new website.

TEXTILE AND GARMENT Compete received fifty-six (56) applications so far; 20 of which were selected in cooperation with the Garment and Textile Union in November 2015 to be part of Compete initial program for assistance. These are the top players amongst their affiliated members based on export volume and export potential. Advisory Support Sixteen (16) advisory LOAs have been signed until the end of August with the selected garment companies to benefit from the Project’s assistance, which includes: conducting market research for entry / re-entry into the Israeli and West Bank markets, targeting a variety of products and types of companies within the select 20; lead list creation and exploration in both markets, acting as sales representatives for the companies in both markets; setting up introductory meetings for select clients with potential buyers and re-assuring buyers of their ability to conduct business with Gazan companies; marketing materials assessment and potential assistance. Advisory LOAs will be signed with the remaining companies in the upcoming period. Compete’s Senior Technical Advisor and Gaza Business Advisor provided the technical assistance component, which consisted of conducting market research, creating lead lists for key products, acting as sales representatives, setting up introductory meetings, providing marketing materials initial assessment and strategic guidance. Technical Support The FLAP committee approved nine (9) applications from Gaza Garment companies for technical support; these companies had requested assistance with new technology to enhance production quality and efficiency as well as support with workforce development, in addition to the aforementioned technical assistance. Seven technical LOAs have been signed to date. Beneficiaries are listed below:

Al Hadeel Company - Hadeel Company is a women’s wear producer, planning to increase the factory capacity, enhance the quality and expand its outreach to new export markets; the West Bank and Israel. Compete is supporting the company in providing essential equipment [buttonhole machine], plotter and OptiTex technology, to control the garment before cutting or sewing any piece of fabric, enabling faster cycles and products that better fit the export company’s needs as well as to control the quality and assure the consistency of products. Compete is supporting the company in hiring 35 apprentices to utilize their new equipment and increase their capacity. This comes as part of Compete efforts in creating jobs and spurring growth in Gaza. Compete delivered one buttonhole machine to its branch in

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Hebron to start using it in the production in addition to the sewing machines, steam ironing and clothes button machines that has been brought as part of the client’s share. The procurement of the plotter machine and the OptiTex system is under process and will be finalized in September 2016. Moreover, Compete conducted an Operation and Management Analysis to assess the company current management system and understand the requirements needed to comply with international standards. This assessment will support the company to enhance the management quality and allow them to obtain a quality certification such as ISO. The results will be shared with company in September and USAID/Compete will work closely to enhance their system.

Al Majed - An Islamic wear producer, Al Majed is planning to reach out to new buyers in the West Bank and use new embroidery machines in order to increase capacity and ensure the quality of final products. Compete is supporting Al Majed in conducting market research for the West Bank market and in providing an embroidery machine. During the month of July, the contracted consulting company conducted field visits with retailers and wholesalers in the West Bank. The market research was submitted in August for the clients’ revision, and will be finalized by September 2016. During this reporting period, Compete’s procurement team finished the vendor selection processes for the embroidery machine and the PO will be signed in early September 2016.

Al Ostaz Company - A children’s wear producer, the company is planning to expand into the West Bank market. Compete will support this company in conducting market research in order to expand its reach in the West Bank market. Compete contracted a consulting firm to conduct the research, and in July the company started conducting field visits and interviews with retailers and wholesalers throughout the West Bank. The market research was submitted in August for the clients’ revision, and will be finalized by September 2016. The results of this market research will provide Al Ostaz Company with profiles of potential buyers, quantifying buyer needs, requirements, and processes; and will deliver actionable recommendations and a “go-to-market” strategy that will enable Al Ostaz Company to reach and sustain key new clients in the West Bank.

Hassan Shihadeh Company - The company is a jeans wear producer, planning to increase the factory capacity as well as its export volume to Israeli markets. Compete supported the company under the FLAP program on a cost share basis. In July 2016 the project assisted the company to install a financial system to control its operations and finances. Moreover, the Project hired a designer for three months to design new styles then the Company will sign a permanent contract to hire the designer for a longer period of time, in which Compete covers 70% of the salary for the first three months as well as a financial system of which 30% will be covered by the company. In addition, in July 2016 Compete delivered one generator with 33 KVA to support revitalizing the factory. Compete is in the process of delivering the company with two over-lock machines, one buttonhole machine and one close button machine. In August Hassan Shihadeh committed their cost share and bought 25 computerized stitching machines and two over-lock machines. Procurement of Compete’s assistance will now commence as a result. The company succeeded to sign contracts with two Israeli companies [Mai Design and ONOT Jeans] and is willing to expand more in the Israeli market.

Kamal Ashour Company - Kamal Ashour is specialized in producing primarily winter clothing: blouses, jackets, children’s blankets; as well as private school uniforms. The company is focusing on linking back to their previous Israeli clients, therefore the company contacted two of their old buyers in the Israeli market and they showed interest in buying the company’s products for the winter season. Accordingly, Compete will support the company in providing a new vacuum ironing machine to ensure the finishing as well as a 50 KVA generator to overcome the electricity shortage and to increase the production capacity. Compete will also support Ashour in developing new website to upgrade their marketing capabilities. The LOA was signed in late August and the generator will be delivered in September. The


equipment and the website will be delivered in October 2016. Ashour commenced its cost share and installed the UPS and ordered plastic bags from China.

Nahed Al Safadi Company - Specialized in men’s suits, pants and jackets, the firm is planning to re-start the relationship with previous Israeli buyers. Thus, the company is planning to enhance the quality of the products and the production capacity of the factory. Compete is in the process of assisting this company in buying new and specialized machines for the type of products needed to reach their target market. The LOA was signed in late August and the equipment will be delivered in October 2016.

Oun Taha Company - Oun Taha is a jeans wear producer, planning to introduce a solar system power source option for the factory; minimizing the cost of power used by the company which is approximately US $3,000 per month. The goal is to enhance the competiveness of products by reducing the unit cost by 4.6% and increase exports through existing buyers and new buyers in the West Bank. Compete support is pending the recommendation of the solar consultant.

Zahrat Al Madaen Company - A children’s wear producer, the firm is planning to increase the capacity of the factory through utilizing existing machines. Compete supported the company through provision of one 33 KVA generator to revitalize the factory and increase its exports to the West Bank. The company succeeded in utilizing all of the machines that increase the production capacity for local and West Bank markets.

TOURISM USAID/Compete will work with the Tourism sector in Gaza to develop strategic business and management plans and enhance production and quality systems. The program will also provide training in areas critical to improving performance. Through August 31, 2016, the Project received thirty-two (32) applications. Four LOAs were signed by the end of August with Roots Hotel, Al Salam Restaurant, Castillo and Level Up. Castillo and Level Up - USAID/Compete signed the POs with the winning vendors that will implement the e-management software for Castillo and for Level Up to conduct a Hazard Analysis Critical Control Point (HACCP) assessment and gap analysis, and the two activities for the two restaurants were

Zahrat Al Madaen Company receives a 33 KVA generator to revitalize the factory and increase their exports to the West Bank.

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The new tablets, as part of the integrated system, will streamline operations for Castillo.

completed during August. Recommendations and findings will be shared for the restaurants to upgrade its services or deploy new systems that comply with HACCP requirements. The beneficiaries have begun to adopt implementation plans and abide by recommendations towards meeting HACCP standards and obtain certification in the near future. Castillo restaurant operations and management software was successfully installed and fully integrated, the user training was completed and the beneficiary paid their cost share by purchasing 5 tablets, 3 printers and 1 computer. Roots Hotel - Based on the LOA signed with Roots Hotel, the Project will support the hotel with a cost share of 70% towards the installation of a hospitality management software system, website development as well as a full assessment for the installation and deployment of a solar energy system to assist them in lowering the steep electricity bills due to power cuts and dependence on diesel generators. In August the solar assessment was underway and should be completed by early September. The assessment will be covered in its entirety by the Compete Project. The bid evaluation for website development was finalized in August. The development of the website is currently in progress and will be finalized in October. Salam Restaurant - Based on the LOA signed with Salam Restaurant, the Project will support the installation of operation management software and conduct a solar energy assessment. The Project completed a bid evaluation and accordingly awarded the contract in August. The installation and training of e-restaurant software was completed in August 2016. The beneficiary completed their cost share through purchasing 6 tablets, 1 laptop, and 5 Cisco access points. The solar system is underway and should be finalized by September. Institutional Level On the institutional level, an assessment of the Palestinian Committee for Hotel, Restaurant and Touristic Services has been completed. The assessment report has been finalized and approved by the Committee. The purpose of this assessment was to obtain baseline information on the unions’ operating environment, identify the strategic and operational challenges facing the union and eventually enable the Project to determine the type of technical assistance and capacity building support needed for the unions. Compete finalized the design of a program to enhance the capacity of the union. The Project initiated the requisition process to buy equipment and furniture for the union based on the assessment report recommendations. USAID/Compete is considering financial support to PCRHTS, with an in-kind grant to enhance the capacity of the union. Areas for consideration include: develop the union strategy, establish the union governance policies and procedures, support the union with the annual rent, equip and furnish the union’s new office, develop accounting policies and procedures manual, install automated accounting system, and develop a modern and up to date website. Areas of assistance for consideration are: Develop the union strategy, establish the union governance policies and procedures, support the union with the annual rent, equip and furnish the union new office, develop accounting policies and procedures manual, install automated accounting system, and develop a modern and up to date website.


ANNEX A: GAZA ONGOING ACTIVITY REPORT The main accomplishments in each targeted sector during the past quarters are summarized in the table below:

Sector Pre-intervention

Status

Strategy Targets Progress to Date

Agri-business: Cross-Cutting

• Lack of adequate access to water or energy

• Provide technical assistance to select firms and equipment/ inputs to enhance access to water and alternative energy sources

• 40 wells will be operating with solar energy supporting at least 2000 dunums of productive land

• Compete identified over 60 fully-licensed wells; 44 wells were short listed for Compete support, 43 are vetted and the remaining one is submitted for vetting on April 13, 2016.

• The design of three solar water pump systems finalized in order to address the required flow rates and head.

• The vendor was pre-selected. • The specifications of the system components were re-submitted in July 2016 to the

coordination and liaison administration for Gaza (CLA) (request numbers IM-150610, IM-150611, IM-150612) per USAID and CLA request in order to obtain preliminary approval to facilitate entering the required items to Gaza.

• Implementation is pending CLA approval. Agri-business: Fresh Herbs

In 2015:

30 dunums, 60 tons, 5 farmers

Basket consists of 3 varieties

• Scale up Fresh Herbs Farms

• Introduce new products and technologies

• Enhance post-harvest facilities

• 100 dunums (200 tons)

• Basket consists of 6 varieties

• $1 m of exports • 100 full time

jobs

• Compete completed market demand assessment for herbs; 2 Israeli exporters (Arava, Viva) expressed demand for 300 dunums / 600 tons production.

• A scalability high-value production pattern of fresh herbs was designed and presented to the relevant cooperatives and local export companies. The program was announced mid-March and the application close out was March 31, 2016.

• Compete received 196 applications clustered under 4 cooperatives. The total area with complete applications reached over 700 dunums.

• The program targets 100 dunums; 80 dunums were approved to proceed with. 10 LOAs are signed for 50 dunums. Another 50 dunums will be identified in September 2016.

• The vendors were pre-selected and installation Started in August and will be completed in September, 2016 for the first 50 Dunums.

• The specifications for the greenhouses were submitted on March 24, 2016 to CLA (request number IM-150549) and were approved in June 2016.

List of potential beneficiaries is available in Annex A

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Status


Agri-business: Vegetables (potato, carrots, tomato, pepper)

• Lack of proper post-harvest packing and cold chain facilities.

• Limited markets (Israel & WB)

• Enhance post-harvest Facilities

• Adequate post-harvest facilities established by May to export to Gulf

• Enhance Post-Harvest: - Four exporters were identified and approved to establish cold storage facilities

to enable export; Compete signed one grant with Husny Shihadeh, one firms was not ready to move so the company dropped [Zaqout]. Two more grants will be signed with Bawasel Al Wifaq and Abu Tayem once finalizing the procurement process. The total capacity of the three cold storage facilities will be 2,560 tons.

- Compete received CLA approval to enter the required items to Gaza. Husny Abdallah Shihadeh and Sons Company for General Trading Compete supported Husny Shihadeh in providing cooling room, which will benefit a large number of farmers in Gaza. The aim of this grant is to assist Husny Shihadeh Company via purchasing two refrigeration units for their proposed cooling rooms. Supporting this activity will address the currently limited access to export markets (especially Israel and the West Bank) and the widespread lack of cold chain facilities throughout Gaza, thus strengthening existing high-value agricultural subsectors. The capacity of the cold storage facilities is 1,060 tons. The purchase order signed with Husney Shihadeh; panels installed and the refrigerating system is completed Bawasel Al Wifaq Compete plans to support Bawasel Al Wifaq Company in providing cooling room, storing around 700 tons. The cold storage facilities will ensure products collected by participating farmers will be refrigerated and the cold chain maintained enabling export. The grant will be signed once finalizing the procurement process. Mahmoud Hamdan and Partner for Vegetables Trade [Abu Tayem] Compete plans to support Abu Tayem Company in providing cooling room, storing around 800 tons. The cold storage facilities will ensure products collected by participating farmers will be refrigerated and the cold chain maintained enabling export. The grant will be signed once finalizing the procurement process. List of beneficiaries is available in Annex B



Status


• Introduce new products and technologies

• Establish Vegetable industries

• High-value production patterns using netting established (200 dunums) installed by May for about 80 farmers

• Expanded Summer exports to Gulf markets (additional 600 tons)

• Introduce New Production Patterns: o A scalability high-value production pattern of vegetables, using roof netting for the

greenhouses, was designed and presented to relevant cooperatives. The purpose is to enable farmers to sustain the Gulf market during the summer.

o The new pattern program was announced mid-March and the application close out date was March 31, 2016.

o 65 LOAs, covering 234 dunums, have been signed so far. 65 farmers installed netting covering 234 dunums. Compete cost share covers 153 dunums. List of beneficiaries is available in Annex C

o Due to the high demand that Compete received from the vegetables farmers, the program was re-announced in June16 and extended to cover an additional 200 dunums. 144 new applications were received to make the total number of applications in the second phase 193.

o 82 of which are vetted and compliant covering 288 dunums. 51 farmers are approved by committee covering 188.6 dunums [121.8 dunums compete cost share]. Four LOAs were signed so far.

o The program will be implemented in March 2017.List of potential beneficiaries is available in Annex D

Sector Pre-intervention Status


Agri-business:

Strawberry

In 2015:

900 dunums yielding 2700 tons

• Limited markets • Lack of high value

productions patterns

• Introduce high production patterns

• Support marketing firms

• Upgrade post-harvest and introduce processing facilities

• Upgrade existing farms

• 100 dunums under new production patterns yielding 450 tons of high quality strawberries

• 6 dunums under

new production patterns [hanging

Scale Up the Strawberry Production Using Single Span Green Houses This program was announced in December 2015 and shared with four cooperatives: Charity Association for Vegetables and Flowers, Gaza Agricultural Cooperative for Production & Marketing of Vegetables, Farmer's Union Charity Cooperative and Beit Hanoun Agricultural Cooperative. 93 full applications were received; LOA signed with 86 and 85 installed to date. List of beneficiaries is available in Annex E Introduce Hanging Strawberries Under Computerized Irrigation Two pilot projects have approved for hanging strawberry systems. Eid Siyam Farm

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strawberry system] yielding 60 tons of high quality strawberries

Compete developed business plan to study the feasibility of installing this system in Gaza. According to the results, Compete provided this farm in May 16 with a complete hanging strawberry system including the computerized irrigation system. Strawberry mother seedlings planted to produce seedling for next season in Sep 16. Mahmoud Ahmad Saled Ikhlil Farm Compete developed business plan to study the feasibility of installing this system in Gaza. According to the results, Compete provided this farm in May 16 with a complete hanging strawberry system including the computerized irrigation system. Strawberry mother seedlings planted to produce seedling for next season in Sep 16. The contact information of each beneficiary is available in Annex F



Agri-business:

Fish

On shore

• 3 fish farm (260 tons)

• lack of fingerlings

• Scale-up onshore fish production

• 270 additional tons of fish to market

• 30 new jobs created

• Increase in sales by USD $3.5m

Scale-Up Onshore Fish Production Compete signed two LOAs with two fish farms, Fish Fresh and Al Bahar; currently producing 140 tons and 100 tons annually respectively of the Denis variety. Both farmers planned to expand their production for local market demand. Fish Fresh Fish Fresh is the biggest onshore fish farm in Gaza, established in 2011 in the Khan Younis district. The company specializes in producing Denis fish (Sea Bream), with a production capacity of approximately 140 tons per year. Compete supported Fish Fresh to expand the farm and increase its production capacity by an additional 190 tons per year, and increase its employment by 22 workers. First, Compete conducted a business plan to study the feasibility of investing $587,922 in this expansion plan; Compete covered 30% of the investment cost and provided aerators and electricity generators to increase the quality of production and ensure an uninterrupted power supply. Fish Farm completed the required infrastructure and installed water pools, greenhouses, water wells and leather lining. Compete plans to hire a consultant to conduct and train the beneficiary on Farm Management System that determines how the farm-life will be organized, resources allocated and activities performed. It deals with various strategies and methods to keep a farm productive, sustainable, resistant and profitable. Currently Fish Fresh expansion reached a capacity of 350 tons [1M fingerlings] of which 300 tons are from Denis and 50 tons are from Sea Bass. The sales of the new products will start in November 2016. The firm is hired an additional 12 workers so far, more workers will be hired once fully operated.




• Introduce

fingerlings production in Gaza

• One fingerlings

farm established (1m fingerlings/annum)

Al Bahar The second biggest onshore fish farm which was established in 2015 near the coastal road of southern Gaza. The company specializes in producing sea bream “Denis” fish, its production capacity is around 100 tons per year. Compete is supporting Al Bahar to increase its production capacity by an additional 80 tons per year, and will increase its employment by 5 workers. Compete conducted a business plan to study the feasibility of investing $354,800 in this expansion plan. Based on the results, Al Bahar fish farm started preparing the land and infrastructure to expand its facilities as part of its cost share. Compete will support Al Bahar with the necessary improvements for fish farms with the installation of air injectors and two generators in order to increase its production capacity. The Project signed an LOA with Al Bahar and started requisition of inputs including injectors and two generators. The inputs are expected to be delivered in August and September 2016. A permit requisition of the generators and the air injectors were submitted to CLA approval; generators were approved in July 2016. Introduce Fingerlings Production in Gaza: Kuhail Fish Farm Kuhail Fingerlings is the oldest on-shore fish farm in Gaza (Netsarim), established in 2006. The company specializes in producing only Denis fish, and its production capacity is around 30 tons per year. The local market is deemed the main market for the company, and as they import a significant portion of their fish, Compete has conducted an assessment confirming that the local market can absorb their potential increase in volume. Compete has conducted a market assessment on the demand of fingerlings and developed a business plan for Kuhail on their production; both assessments confirmed the viability of the project. Accordingly, Compete, through in-kind grant, assisted Kuhail Fish Farm in developing a fish hatchery for Denis fingerlings for the benefit of the Gaza Strip fish farming value chain, as well as introducing new alternative energy solutions (solar) to address persistent electricity disruptions that effect consistent production. Compete assistance includes lab equipment and a solar system; both were delivered and installed. Almost 400,000 fingerlings produced to date and will be grown at onshore farms in Gaza. Kuhail Farm has hired so far an additional 2 workers. The supported fingerlings lab started supplying Fish Fresh with fingerlings, and recently Kuhail signed an agreement with Fish Fresh whereby he will supply the

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latter with 100,000 fingerlings monthly. The contact information of each beneficiary is available in Annex G

Off shore

• Untrained personal • Lack of fingerlings

• Support development of offshore fish production

• 6 divers trained • Trained staff to

install an off shore farm

Support Development of Offshore Fish Ahmad Abu Alnaja Company [Offshore Farm] Abu Alnaja Company was founded in 1993 working in agriculture business in Gaza Strip. Abu Alnaja plans to introduce the first offshore aquaculture in Palestine to produce fish in the sea through introducing Tension Leg Cages (TLC) technology. This shift in Abu Alnaja Company mission was in response to a growing understanding of economic growth and shortage of fish in Gaza. Compete is supporting Abu Alnaja in conducting a business plan for offshore fish farms and providing diving training courses in order to increase its production capacity by an additional 80 tons per year and its employment by five workers. On an offshore site, Abu Alnaja will need less electricity and will not require the processes and infrastructure for aeration. This company will be the first to employ this technology in Gaza, and is securing the permit from the Israeli Coordination and Liaison Administration (CLA) to operate within a certain distance from the shoreline. Skilled divers are required for this type of offshore fishing as they set up the cages, sink them, provide feed, and extract the fish. An LOA was signed with the beneficiary that includes Project support for a business plan and training in diving, specifically for fish farms. The environmental assessment of establishing offshore farm was completed by the Israeli side in July16 which was a pre-requisite to complete the business plan. The first draft of the business plan was finalized end of August 16. PO for two months of diving training was signed and the training will commence once receiving permits for the divers. The contact information of each beneficiary is available in Annex G



ICT • Business instability due to public infrastructure, market disconnect

• Enhance access to market

• Development of workforce

• Introduction of training for new skills in the market

To date, 85 applications were received; ten cases were approved, nine LOAs signed with one grant, 32 applications rejected as they don’t comply with the project requirements and the rest were recommended to be part of the start business support program.




and weak business tools

• Lack of qualified workforce, pipeline

• Limited access to market

capacity • Enhance access

to finance

• Assisting startups in developing new products and services

• Stabilize business operation for companies

• Expansion into new markets and signing new contract.

• Develop new products and services

Dalata Code Dalata Code is a software company that provides software development services for the local and international market through an anchor contract with 3hicag, identified through the Gazan diaspora population. This company has developed a “Warehouse Management System” called (ELID). Dalata Code conducted a basic market research showed that Nigerian market is a potential market for its product. Compete assessment shows the company needs to develop the company infrastructure; through provision of equipment (laptops) and billing and quality control software (50% COMPETE share) and Develop the market external outreach through Amazon hosting (30% COMPETE share). Dalata Code will cover the remaining balance of the costs. To date, equipment were delivered, procurement of software and Amazon hosting underway. Expected closing is September 2016. Developers Plus This software company suffered from a disruptive electricity supply with an average of daily 3 hours electricity on and lacks essential equipment. Compete conducted a needs assessment for a solar system (the consultant estimated the need for a 3.78kW to stabilize the operations) in addition to a file server so that the company can share and store documents related to work delivered to its clients. The solar system is already operational and had an impact with 5 new projects attained within a week during June 2016. (Prior to the system being installed the company would take on 1 to 2 projects a month). 321 Boom 321 Boom (a game development startup company) has approached Compete Project to support them in developing the first full game for mobile devices and provide marketing assistance once 321 Boom game is published on the relevant game APP Store(s). Once published, Compete will assist 321Boom to purchase advertisements on relevant websites (Amazon, GooglePlay, and the iTunes store), as well as membership subscription to a gaming organization to help them continue to stay informed and engaged with their market. Compete assessment proved that a UPS, laptop and WACAM graphics hardware are essential equipment to this company. Equipment are already delivered and the company completed the development of their products [cartoon animation designs]. Netstream The company is one of the Internet Service Providers (ISP). They are looking to expand their Call Center to serve other clients targeting local and regional markets.

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Compete assisted Netstream Company by developing a business plan to measures the feasibility of the new expansion. The study is already done in July 2016 and submitted to the company. Compete will follow up with Netstream to determine the required technical assistance to support their expansion plan. 5QHQH The company works in development of entertainment and comedy cartoons films in Arabic. They work with an international investor to expand their market targeting Egypt and possibly Jordan. Compete will support the company to launch a Facebook campaign to reach the Egyptian market. Moreover, COMPETE will address the company request to study their potential to target the Jordanian market which requires extension to the LOA until October 2016 Vision Plus Is a training center, it provides training services locally in Gaza for Cisco, Microsoft and other IT topics. This company approached Compete Project to assist them in opening a new MAC lab to become an Apple certified training center – the first of its kind in the West Bank and Gaza. Compete assessed the company’s lab needs (12 MAC computers in addition to the furniture). Compete provided Six MAC computers while the company purchased furniture and placed order for six MAC machines as their cost share. Moreover, Compete is in the process of conducting a niche market assessment and determination. This assessment aims to result in a detailed scope of work for a market research firm as part of the Export Market Development Program. This assistance is designed to help vision plus in developing the right plans for the desired software division. This support will assist vision plus in making informed decisions regarding their international market and identifying the best setup for International business, given their current market and company situation. UnitOne ICT UnitOne ICT is a Business Process Outsourcing (BPO) company, approached Compete to provide assistance through a professional consultant to conduct a niche market assessment and determination. This assessment aims to result in a detailed scope of work for a market research firm as part of the Export Market Development Program. Compete hired a consultant who conducted and completed the required assessment. The results were shared with the company. Compete will follow up with the company to determine any required technical support.




Modern Tech Company [MTC] MTC specializes in website development, web hosting, SMS, and specific software packages for local businesses. MTC approached Compete to assist them via a professional consultant to conduct a niche market assessment and determination. This assessment meant to identify areas of market expansion for MTC and assist the company in making informed decisions regarding their international expansion and to produces a detailed scope of work for a market research firm as part of the Export Market Development Program. The assessment was conducted and completed and the results were shared with the company. Compete will follow up with the company to determine any required technical support. ICT Warehouse ICT Warehouse for IT Services is a software company registered out of Gaza. Since 2011 the company worked on delivering software projects for the local market. Slowly, the company shifted to European markets with the assistance of other donors. Managing to establish linkages with several markets in Europe (Croatia, France, Austria, Spain), the Company wants to diversify its revenue streams and move from its current 100% service industry revenue. After conducting thorough research, ICT Warehouse wants to get into the Sony PlayStation Arabization market. Sony introduced Arabic support only in early 2015. Until now, there are no PSP games that has Arabic characters, ICT warehouse plans to become a provider of Arabic characters for PSP game developers. Obviously, the end market is the Arab regions, but ICT warehouse will be working with game developers that are based in Europe and the US. Compete, through a professional consultant, will support the company in conducting a niche market assessment and determination. This assessment will result in a detailed scope of work for a market research firm as part of the Export Market Development Program. Vetting for this company expiated and LOA will be signed as soon as vetting arrives. Gaza Gateway Gaza Gateway used to be a department within UNRWA working on implementing ICT projects for UNRWA only, the department was spun off as a private sector company in late 2015. It is expected that Gaza Gateway will become a significant employment generator among youth in the Strip. Compete signed a grant agreement with Gaza Gateway in July 2016 to help build their internal organizational capacity to become a robust outsourcing company on the regional level. COMPETE intervention includes capacity building for senior

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management and company assessment and business plan. The assessment is in the process and will be competed in September 2016. The contact information of each beneficiary is available in Annex H



Garment and Textile

• Lack of market access

• Declining workforce, moving to other sectors

• Weak support institutions

• Lack of quality assurance and management systems

• Build capacity and enhance access to market for select firms

• Enhance capacity of Garment & Textiles Association

• Established and/or increased export with Israeli and West Bank buyers

• Enhanced technical capacity of key Garment firms

• Strengthened the Textile and Garment Union in Gaza

• Enhanced Textile and Garment Union ability through providing better services to their respective sectors

Fifty six applications received so far, 20 of which were selected in cooperation with the Garment and Textile Union in November 2015 to be part of our initial program for assistance. These are the top players amongst their affiliated members based on export volume and export potential. A needs assessment was conducted with the 20 selected firms, capturing precise data on their sales and exports to Israel and the West Bank markets, partnerships, production capacity, material requirements as well as marketing information. Nine companies were assessed for technical assistance, and are in process to receive new technology to enhance production quality and efficiency as well as support with workforce development, in addition to the aforementioned technical assistance. Seven technical LOAs were signed so far, others will be signed in upcoming period, based on cost share affirmation. Hadeel Company Hadeel Company is a women’s wear producer, planning to increase the factory capacity, enhance the quality and expand its outreach to new export markets; the West Bank and Israel. Compete is supporting the company in providing essential equipment [buttonhole machine], plotter and OptiTex technology, to control the garment before cutting or sewing any piece of fabric, enabling faster cycles and products that better fit the export company’s needs as well as to control the quality and assure the consistency of products. Compete is supporting the company in hiring 35 apprentices to utilize their new equipment and increase their capacity. This comes as part of Compete efforts in creating jobs and spurring growth in Gaza. Compete delivered one buttonhole machine to its branch in Hebron to start using it in the production in addition to the sewing machines, steam ironing and clothes button machines that has been brought as part of the client’s share. The procurement of the plotter machine and the OptiTex system is under process and will be finalized in September 2016. Al Majed Company




An Islamic wear producer, planning to reach out to new buyers in the West Bank and use new embroidery machines in order to increase capacity and ensure the quality of final products. Compete is supporting Al Majed in conducting Market research for West Bank market and in providing Embroidery machine. During the month of July, the contracted consulting company conducted field visits with retailers and wholesalers in the West Bank. The market research submitted in August for clients’ revision, and will be finalized by September 2016. During this reporting period, Compete procurement team finished the vendor selection processes for the Embroidery machine and the PO will be signed early September 2016. Al Ostaz Company A children’s wear producer, planning to expand into the West Bank market. Compete will support this company in conducting market research in order to expand its reach in the West Bank market. Compete contracted a consulting firm to conduct the research, and on July 16 the company started conducting field visits and interviews with retailers and wholesalers throughout the West Bank. The market research submitted in August for clients’ revision, and will be finalized by September 2016. The results of this market research will provide Al Ostaz company with profiles of potential buyers, quantifying buyer needs, requirements, and processes; and will deliver actionable recommendations and a “go-to-market” strategy that will enable Al Ostaz Company to reach and sustain key new clients in the West Bank. Hassan Shihadeh Company A jeans wear producer, planning to increase the factory capacity as well as its export volume to the Israel markets. Compete supported the company under the FLAP program on cost share basis. In July 2016 the project assisted the company to install a financial system to control its operations and finances. Moreover, the Project hired a designer for three months to design new styles then the Company will sign a permanent contract to hire the designer for a long period of time, in which Compete covers 70% of the salary of the first three months and the financial system and 30% covered by the company. In addition, in July 2016 Compete delivered one generator with 33 KVA to support revitalizing the factory. Compete is in the process of delivering the company with two over-lock machines, one buttonhole machine and one close button machine. The machines will be delivered once Hassan Shihadeh finalized the procurement of his cost share- 25 computerized stitching machines and two over-lock machines. As a result of Compete support, the company succeeded to sign contracts with two Israeli companies [Mai Design and ONOT

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Jeans] and is willing to expand more in Israeli market. Zahrat Al Madaen Company A children’s wear producer, planning to increase the capacity of the factory through utilizing existing machines. Compete supported the company through provision of one generator with 33 KVA to revitalize the factory and increase its export to the West Bank. The company succeeded in utilizing all of the machines that increase the production capacity for local and West Bank markets. Nahed Al Safadi Company Is specialized in men suits, pants and jackets producer, is planning to re-start the relationship with the Israeli buyers. Thus, the company is planning to enhance the quality of the products and the production capacity of the factory. Compete is in the process of assisting this company in buying new and specialized machines for this type of products to reach their target market. The LOA signed in late Aug and the equipment will be delivered in October 2016. Kamal Ashour Company Is specialized in producing primarily winter clothing: blouses, jackets, kid’s blankets; as well as private school uniforms. The company is focusing on linking back to their previous Israeli clients, therefore the company contacts two of the old buyers in the Israeli market and they show interests in buying the company products for the winter season. Accordingly, Compete will support the company in providing new vacuum ironing machine to ensure the finishing as well as generator 50 KVA to overcome the electricity shortage and to increase the production capacity. Compete will also support Ashour in developing new website to upgrade their marketing capabilities. The LOA signed in late Aug and the generator will be delivered in September. The equipment and the website will be delivered in October 2016. Jaber Brothers Company The company specialized in producing a wide variety of men’s wear (ex. jackets, pants, jelbab, abaia, dresses, school uniforms, training suits and blouses. The company plans to re-export its products to West Bank. The company is currently utilizing 60% of its production capacity and focusing on cutting and finishing the products while subcontracting sewing to other (4) local sewing workshops. It was clear that the highest demand from West Bank was on Al Abaia, Jelbab and Palestinian cultural Traditional dress. For such type of dresses, embroidery is a fundamental part in production and the company has plans to expand its production to include this new process under their production line.




Accordingly, the company reached Compete to support him with two embroidery machines in order to enhance productivity, reduce production cost and ensures the consistency and the quality of its final products as well as to create its own designs in-house. Acceptance letter was signed; the LOA will be signed once finalizing the procurement process. Oun Taha Company Is a jeans wear producer, planning to introduce a solar system power source option for the factory; minimizing the cost of power used by the company which is approximately US $3,000 per month. The goal is to enhance the competiveness of products by reducing the unit cost by 4.6% and increase exports through existing buyers and new buyers in the West Bank. Compete support is pending the recommendation of the solar consultant. Institutional Level: Textile and Garment Union On the institutional level, the institutional assessment of the Gaza Garment & Textile Union has completed. The purpose of this assessment was to obtain baseline information on the unions’ operating environment, identify the strategic and operational challenges facing the union and eventually enable the Project to determine the type of technical assistance and capacity building support needed for the union. Provision of technical assistance and capacity building to support the Union is pending vetting. The contact information of each beneficiary is available in Annex I



Furniture • September 2015 increased restrictions on dual-usage list of required imports

• Lack of market access

• Declining workforce, moving


• Enhance capacity of Furniture Association

• Strengthened Furniture Union in Gaza

• Enhanced Furniture Union ability through providing better services to their respective

Seventy-four applications were received to date, 20 of which were selected in cooperation with the Palestinian Wood Industries Union in Novembers 2015 for potential engagement. These 20 firms are the top exporters amongst the union members, based on the export volume and export potential. Based on the Israeli government’s decision in October 2014 to ease economic restrictions on the Gaza Strip, a needs assessment was conducted with the 20 export-ready firms to assess their sales and exports to the Israeli and West Bank markets, partnerships, production capacity, material requirements, and marketing information.

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to other sectors • Weak support

institutions • Lack of quality

assurance and management systems

sectors However, in September 2015, the Israeli authorities again placed increased restrictions on the type of solid wood allowed into Gaza [from pieces 2.5 cm in thickness and 20-25 cm in width, to 1 cm thickness and 5 cm width]. A quick assessment of the dual-use restrictions list as relate to the 20 firms production requirements was conducted by Compete and submitted to CLA and USAID. The assessment indicated that no firm is able to operate with wood at one cm thickness, as this undermines the products’ quality and increases production costs, leading to low competitive advantages against regional producers. Thus, engagement with this sector is on a limited basis until facilitation has been made via the international community to allow the entrance of the required raw materials into Gaza. Despite the aforementioned challenges, Compete has discovered there is a potential to work with some companies who and are able to utilize smaller pieces of wood through special coordination. The assessments are in process and will be finalized early September 2016. Institutional Level: Wood Industries Union An assessment of the Palestinian Wood Industries Union was completed. Compete will support the WIU in revising the union strategic plans, governance policies, operational plan, monitoring system as well as the accounting system in addition to hiring one accountant to manage the system. The grant will be signed in September 2016.



Tourism • Constant political instability

• Weak support institutions

• Lack of quality assurance and management systems


• Enhance capacity of Tourism Association

• Enhanced technical capacity of tourism firms

• Strengthened the Tourism Union in Gaza

• Enhanced Tourism Union ability through providing better services to their respective sectors

Thirty two applications were received to date, four LOAs were signed so far. The rest were rejected, as they were not complying with the FLAP requirement of submitting a complete company profile and/or their requests were beyond the project scope. Roots Hotel Compete Project will support the hotel with a cost share of 70% towards the installation of a hospitality management software system, website development as well as a full assessment for the installation and deployment of a solar energy system to assist them in lowering the steep electricity bills due to power cuts and dependence on diesel generators. The Solar assessment is underway and should be completed early September 2016. The development of the website is in progress and will be finalized early September 2016. Hospitality software is in the procurement process and will be completed in October 2016. Castillo




Compete Project signed an LOA with the restaurant to install an operational management software system. The system installed in August 2016 and the company started to deploy a software solution, automate the front line operations in one platform and integrates the new technology with already existing back office system. Level Up (Diyara Group) Compete Project signed an LOA with Level Up and will assist the client with a GAP assessment towards achieving HACCP (Hazard Analysis Critical Control Point) certification. The assessment completed in August 2016 with all findings and recommendations to which the restaurant needs to upgrade its services or deploy new systems to comply with HACCP requirements.

Salam Restaurant Compete Project will support the installation of operation management software and conduct a solar energy assessment. The installation and training of E Restaurant software completed in August 2016. Solar assessment is underway and should be finalized in September 2016. Institutional Level: Palestinian Committee for Restaurants, Hotels and Touristic Services An assessment of the Palestinian Committee for Restaurants, Hotels and Touristic Services was completed. Building on the recommendations from this assessment, USAID Compete is considering financial support to PCRHTS, with an in-kind grant to enhance the capacity of the union. Areas for consideration are listed below:

-Develop the union strategy -Establish the union governance policies and procedures -Support the union with the annual rent -Equip and furnish the union new office -Develop accounting policies and procedures manual -Install automated accounting system -Develop a modern and up to date website

The contact information of each beneficiary is available in Annex J

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ANNEX B: UPCOMING EVENTS SEPTEMBER 2016

September 2016

Sun Mon Tue Wed Thu Fri Sat 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 PIP Event – Jerusalem 6:30 – 9 pm

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30

Notes: Agribusiness - Tourism - ICT - Stone and Marble

Documents

USAID/COMPETE MONTHLY PROGRESS REPORT