Industry consists largely of processing agricultural products and textile manufacturing. The industrial centers are in the High Plateaux and near the Toamasina port. Industrialization has been severely hampered by inadequate internal transportation and a restricted local market. Industry accounted for 11% of GDP in 1999. Most plants operated at less than one-third of full capacity. The majority of industrial enterprises process agricultural products: rice, sugar, flour, tobacco, tapioca, and sisal. In addition, there are some meat-packing plants. Urea- and ammonia-based fertilizers are produced in a plant that opened in 1985. Madagascar produces pulp for paper and cement. Other industrial enterprises include cotton-spinning and -weaving mills and three automobile assembly plants.
The government-owned petroleum refinery at Toamasina has a capacity of 15,000 barrels per day, but it has been operating at reduced capacity since it was hit by a hurricane in 1994. The petroleum sector was liberalized in 1996, and the state oil company SOLIMA was privatized in 2000. Oil and gas exploration holds great potential for the country.