Enab Baladi – Khaled al-Jeratli

It has been a year since the owner of the Farzat Development group fled to Jordan, after the arrest of a number of factory managers, against the background of large remittances received by one of the group’s employees on his behalf, coming from outside Syria.

The escape of Mahmoud Tlas Farzat, the group’s owner, to Jordan appeared as a prelude to the closure of its branches and factories in Syria after decades of working in several fields.

According to information obtained by Enab Baladi from employees of the Farzat group’s oil production plant in Homs, the escape of the businessman was followed by the arrest of a number of the plant’s administrators, which indicated at the time that the plant was heading to closure. 

One of the factory administrators (his name withheld for security reasons) ruled out the closure at the time, considering that Farzat is close to influential figures in the Syrian regime, and it is possible that he will reach a settlement that will enable him to return to his work soon.

What happened to the factory?

“Abu Mahmoud,” one of the workers in the oil factory, told Enab Baladi that the factory is committed to working hours only for workers registered in the insurance, while all unregistered workers were dismissed because the administration was not legally bound by them.

Work today in the oil plant is limited to the filling line, through contracts with other companies or factories that have surplus production and whose production capacity is greater than that of their filling lines, as the Farzat factory imports them to be refilled.

Regarding the fiscal situation in it, one of the workers in the accounting sector in the factory, whose name was withheld by Enab Baladi for security reasons, said that the factory was completely shut down, while the filing lines continued to work to secure the workers’ salaries only, until the end of last July.

Farzat decided to terminate his cooking oil business inside Syria after he was forced to pay one billion Syrian pounds to release a group of his employees after he fled to Jordan.

The regime forces also arrested the factory’s production manager and deposited him in one of its prisons in 2021, without information about his fate until today.

The Farzat Development group was established in 1987 and specialized in transportation and land freight, and then expanded its field to include factories for the cooking oil and food industries (FAMCO), the Syrian-Saudi Chemical Company Ltd. (SYSACCO), a company for the manufacture of yarns (SHAMTEX), and Farzat Company for the manufacture of plastic (MEGAPLAST).

The closure

A close associate of Farzat, who is familiar with his work (spoke on condition of anonymity) confirmed that during the past weeks, the factory had completely stopped working after its administrative staff moved to Turkey to start working again there.

The process of restricting the factory in Syria began with the attempts of influential figures in the regime to collect sums from its owner in July 2021, according to the source.

He pointed out that the extortion operations came from personalities close to Asma al-Assad, the wife of the head of the Syrian regime, and with the repeated refusal of Farzat to pay what the source called “royalties,” security restrictions began against the plant’s owners.

The Syrian regime’s government sent a security patrol from the Supply Directorate’s branch, which in turn installed a checkpoint at the entrances to the factory and began imposing sums on shipments exported from it.

With the beginning of this restriction, the checkpoint stopped a car loaded with cooking oil that was leaving the factory towards the city of al-Rastan, forcing it to unload the cargo with a merchant from Homs, and sell it at a price lower than the cost price at the time, according to the source.

The source added that the factory did not bear responsibility for the material loss of the load at the time, forcing the driver to bear it, which was repeated during different periods of time.

Staff arrests

The regime’s security forces arrested the factory manager and production manager, and workers at the end of 2021 with an increase in restrictions on the factory.

Farzat was demanded at the time to pay a large sum to make a “security settlement” for employees and administrators and release them.

Under pressure from the regime, Farzat was forced to pay 1.2 billion Syrian pounds, according to the source, who said that he saw receipt of the amount issued by the Syrian Commercial Bank and then transferred the amount to a bank account belonging to a person named Yasar Ibrahim, under the “settlement” clause.

Ibrahim is one of the owners of Wafa Telecom, an advisor to Bashar al-Assad, and head of the President’s Economic and Financial Office, and is subject to sanctions issued by the US and the UK, as he is known for his close ties with Asma al-Assad.

After Farzat paid the amount, all the detainees were released except for the production manager in the factory because the Supply Directorate filed a lawsuit against him, as he is still in prison until now.

With the company moving to the Turkish market in 2021, it settled in Gaziantep and became known as the “Elmas For Development Co.” It manufactures vegetable oils and margarine. The company distributes its products in the local Turkish market and exports them to the neighboring markets in Iraq and Lebanon. Its products are also spread in African countries and EU countries.

Impact on the local market

The closure of the factory in Syria coincided with a global oil crisis that hit the markets following the Russian war on Ukraine, but the Syrian markets still sell Farzat’s cooking oil, according to witnesses.

It was also noted that oil bottles produced by the Farzat oil factory were distributed in some shops inside Turkey.

To verify the nature and accuracy of the information, Enab Baladi interviewed oil traders in the city of Homs.

One of the owners of wholesale shops in Homs told Enab Baladi that the goods in the market are produced by the factory in Turkey, and it is identical to the factory’s production in Syria as its quality did not differ from the period of its manufacture in Syria.

Cooking oil factories in Turkey usually bring their goods into Syria from the opposition’s areas of control in northern Syria or through the Lebanese border.

Expected shutdown, poor alternatives

The expert in financial and banking sciences, Dr. Firas Shaabo, considers that the closure of the businesses of major merchants and industrialists in Syria has been expected for years, especially with the increasing restrictions on business by the Syrian regime.

“The poor security situation and infrastructure contributed to this decline, not to mention the widespread corruption in the state,” the academic says, adding that the financial committees that the regime formed years ago and spread in the Syrian markets contributed to this by imposing royalties on merchants and tampering with the markets.

As a result of these pressures, some of the major traders and industrialists left Syria for other countries, the most recent of whom were workers in the food products and oils sector, who were affected by the ongoing war in Ukraine.

It is “logical” for large business owners, after all this restriction, to try to search for a new destination outside Syria, which is what is happening today, Shaabo said.

Shaabo considered that the Syrian market today is naturally suffering from a shortage of basic commodities, which will increase the departure of these companies due to the lack of materials in the market.

He pointed out that the current crisis in these markets is clear, but it will become more severe in the future with the departure of traders and industrialists from the Syrian lands.

The only solution before the government of the Syrian regime is to search for alternatives to these products through importation, in light of the recent crisis and the increase in security restrictions on traders, the economist confirms.

The plan that Dr. Shaabo expects the regime government to follow, especially with regard to the cooking oil market, is to cover its need with low-quality goods that are commensurate with the residents’ income.

It is known that Syria has, for many years, been importing everything that is bad, at the technological level, or basic and primary commodities, Shaabo concluded.