Lebanon: Peace Profits II
Lebanon is achieving amazing growth rates and fighting to regain its reputation as the Switzerland of the Middle East.
Boosted by an extremely effective banking system and dynamic tourism and construction sectors, Lebanon’s economy grew 7% last year.
Bucking the global trends, 2009 was the country’s third year of continual expansion, giving it the second-highest rate of growth in the Middle East and North Africa region after Qatar.
At the end of last year, Standard & Poor’s endorsed the country’s economic health by upgrading its credit rating from B- to B/B.
In addition, the World Bank forecasts that Lebanon’s economy will increase again this year and average 7% growth through 2011.
The signs of economic well-being are evident in Beirut. The downtown infrastructure has been restored and modernized to international standards.
All of these developments reflect the relative political stability in the country and the diminishing possibility for international or ethnic hostility. Democratic elections took place last June without violence or foreign interference for the first time in more than three decades. And, although it took four months of wrangling, the new prime minister, Saad Hariri, was able to form a cabinet without any lapse in law and order.
“We intend to utilize the positive momentum to launch a far-reaching economic reform program that will address the long-standing gaps in our basic infrastructure,” Hariri says. “In particular, we will upgrade the country’s electricity and water sectors, enhance the telecom infrastructure, and maintain and rehabilitate existing roads.”
Riad Salameh, the governor of the Central Bank, Banque du Liban, masterminded the country’s financial resurgence and believes Lebanon will continue on this upward path.
“Confidence is the cornerstone of what is happening,” he says. “We have a new government. The prime minister is young and an energetic entrepreneur. We have a president of the republic, Michel Suleiman, who is keen to keep coherence among the Lebanese. And the parliament is operating now with many laws, which it has to study, vote on and enact.
“The synergy between these three powers is working. Lebanon is going to experience important economic growth that may create job opportunities. Personally, I’m optimistic.”
“I think Lebanon is going to
economic growth that may create job
opportunities. Personally, I’m optimistic.”
Riad Salameh, Governor, Central Bank, Banque du Liban
Mohammad Choucair, president of the Chamber of Commerce, Industry and Agriculture of Beirut and Mount Lebanon, echoes Salameh’s views: “Lebanon is in a situation nowadays in which all variables are ready for 2010 to be a great year,” he says.
Mounir Douaidy, the general manager and financial director of Solidere, the company responsible for the reconstruction of Beirut’s city center, voiced a widely held Lebanese belief that the country has the strong fundamentals required to regain its preeminent economic position as the Switzerland of the Middle East.
“Lebanon has proved to be a resilient economy despite the negative events that have taken place in the past 20 years,” he says. “We have survived devastating crises, and today the economy is achieving much higher growth rates than most countries in the world, demonstrating that we are a safe place in which people can live and invest.”
Reaping the Benefits of Peace
Lebanon’s financial services, insurance, law and IT sectors are expanding fast at home and abroad.
Over the past two years, Lebanon’s bank deposits have risen by 22%, and foreign currency reserves have reached record levels as a result of the growing confidence engendered by the relative political stability.
The wisdom and regulatory authority of the central bank enabled the banking sector to avoid the international financial crisis, says Joseph Torbey, the president of the Lebanese Banking Association and chairman and general manager of Credit Libanais.
One after another, the country’s banking institutions have announced substantial, even record, net profits.
The Lebanon & Gulf Bank’s profits will double those of last year, and its assets have increased 30% this year, says Samer Itani, the bank’s vice chairman and general manager.
Bank Audi, the country’s largest financial institution, is executing an international expansion program with the goal of becoming a regional player in the Middle East, says Freddie Baz, the group’s chief financial officer and strategy director.
CreditBank, a large residential and commercial bank, has maintained an average growth rate of 22%. “We are in a growth phase,” says Tarek Khalifé, the bank’s chairman and general manager. “Our total assets passed the $1 billion mark last June, and our capital value is more than $100 million.”
In the next few years, Khalifé envisions CreditBank raising more capital, buying or merging with another bank, and diversifying into new markets. He sees opportunities in Eastern Europe and in some places in Africa. “I believe that in Africa, under regulation is going to be an opportunity for someone who knows how to tolerate that kind of atmosphere.”
What differentiates CreditBank from other banks, he says, is its attention to the private sector: “We’re a leader in trade finance, in small and medium enterprises, in anything that is commercial lending.”
Khalifé believes that if the current peace can be maintained, many international companies will contemplate a move to Lebanon.
Political differences do not trouble the Lebanese, he says. “This is a country of deep diversity, and the main thing people should focus on is its pluralism. This pluralism is not a negative thing. It is richness for Lebanon.”
For Fransabank – the country’s oldest financial institution, established in 1921 – the last few years have seen what Adel Kassar, the bank’s chairman and general manager, describes as a quantum leap in its expansion strategy.
At an international level, the bank now has a presence in seven other countries: Syria, Algeria, Libya, Sudan, France, Belarus and Cuba.
At a local level, Fransabank is Lebanon’s most widely represented bank, with more than 100 branches, and it is expanding its local network to cover all regions. Notably, it maintained a presence in the southern region throughout the Israeli invasion and occupation.
Fransabank intends to continue its expansion in international and regional markets that present high economic potential. “The importance of Lebanon is not only in the investment opportunities it presents within its borders,” says Kassar, “but also in those that it can pursue abroad.”
Like its banks, Lebanon’s law firms, insurance companies and IT companies are reaping the benefits of peacetime.
Abou Jaoude & Associates has reinforced its position as one of the leading law firms in the Middle East, increasing its local, regional and international client base. Carlos Abou Jaoude, the firm’s founder and managing partner, expects to increase its number of lawyers from the present 38 to 100 by 2015.
“The firm only relies on corporate clients and is now working on converting some family businesses into corporations, thus introducing corporate governance rules in anticipation of future flotation,” notes Jaoude.
UFA Assurances, one of the country’s largest insurance companies, has enjoyed an increase in business of 15% to 20% in recent years but expects an increase of 40% in 2010, says its chairman, Henri Chalhoub.
After establishing the company in Jordan in 1975, Chalhoub expanded its operations to Cyprus, Saudi Arabia and Syria. Today, his company operates in nine countries around the Mediterranean Basin, in the Middle East, and in Europe and North America through a network of 25 offices.
UFA controls and runs underwriting management agencies, insurance and reinsurance brokers, and service companies. Each entity operates autonomously with its own management and under its own name and banner. The total annual premiums that the group manages are in excess of $450 million.
Chalhoub describes himself as the patriarch of the business, which his two sons now run. “I think I will stop expanding now, except for one place I would go to, and that is Qatar,” he says.
BML Istisharat, a Lebanese company that provides international banking and insurance companies with enterprise resource planning (ERP) software to manage their information systems, has launched its operations in seven banks in northern Iraq and plans to continue expanding there, says Joe Faddoul, its chairman.
In addition to providing its services to a quarter of Lebanon’s own banks, the company has more than 300 clients worldwide and derives 60% of its revenue from exports to the U.S., Europe and the Middle East. Malaysia is its next target, says Faddoul.
Market capitalization on the Beirut Stock Exchange increased last year by 34% to $12.8 billion year-on-year, of which 66.7% was in banking stocks and 30.7% in real estate stocks.
“We are confident that the economic stability and growth will continue,” says Ghaleb Mahmassani, the vice chairman of the Exchange.
Lebanon’s real estate business is booming, and industry players are seeking partners and investors across the globe.
Real estate prices in Lebanon have experienced a 30% increase every year since 2005 and show no signs of slowing down.
Throughout Beirut, elegant tower blocks are springing up, with apartments ranging in price from $5,000 to $8,000 a square meter. Similar projects are under way across the country.
The historic city center has been faithfully reconstructed in the style of its Ottoman and French colonial past. Mosques and churches have been delicately restored and ancient souks excavated, then redeveloped along the same narrow alleyways they occupied centuries ago.
While the property market has collapsed in the Persian Gulf, it continues to strengthen in Lebanon, with developers planning ever more ambitious projects.
Three of the most luxurious residential projects in Beirut – Raouche Residential, Verdun Gardens and Place Verdun – are being created by Horizon Development, a real estate company owned by Bahaa Hariri.
The Raouche Residential Project is situated in an exclusive area at Beirut’s westernmost tip, which overlooks the Mediterranean and Pigeon Rocks, one of the city’s most famous landmarks. When completed, Verdun Gardens will be a tranquil complex of two residential towers in the heart of the downtown area, close to designer boutiques and the Raouche waterfront. Place Verdun is designed to be a high end shopping center of 90 retail outlets with roof-garden gourmet restaurants and a Cineplex, plus a luxury hotel with long-term-stay suites.
“Our vision is to create
very high-quality living,
while respecting cultural
enhancing the environment.”
Joseph Helou, Chief Executive Officer, Horizon Development
“Our vision is to create very high quality living, while respecting cultural values and enhancing the environment,” says Joseph Helou, Horizon’s chief executive officer.
Lebanon’s renewed dynamism, he says, is a reflection of the cosmopolitan nature of its society and commitment to private enterprise. “The Lebanese real estate market offers a solid depository for investment.”
There are other investment opportunities, he says, in the country’s infrastructure and power-generation projects, which are both badly in need of upgrading.
Currently, Horizon’s main focus is on an even more ambitious venture than its Lebanon developments: the Abdali Urban Regeneration Project is nearing completion in the Jordanian capital of Amman. Valued at more than $5 billion, it will furnish Amman with a meticulously planned, mixed-use, new downtown area that will become a major business district, equipped with an effective road network, spacious pedestrian walkways and modern infrastructure.
“We didn’t go for the classic way of designing the downtown,” says Helou. “We created a new master plan that relied on using young engineers and architects to do the job.”
SAYFCO, another of Lebanon’s leading property development companies, marked its 50th anniversary in December with the opening of a massive upscale development that will ultimately include a luxury golf course, spa, polo club and villas.
“We will create more than 500 villas, a boutique hotel and a championship golf course,” says Chahe Yerevanian, SAYFCO’s chairman and president. The land in the Ahlam Mountains, on which the development is located, has tripled in value in the past year, says Yerevanian. “It is very fertile and has the [biblical] Rivers of Milk and Honey running through it, and more than 15,000 apple trees. Our idea is to develop the land in a way that is self sufficient.”
SAYFCO now owns more than 6.6 million square feet of land, and Yerevanian believes it will continue to maintain its value: “There are 15 million Lebanese expats living all over the world who will continue the demand for housing and other goods as they repatriate themselves.”
SAYFCO’s strategy is to create middle income homes as well as luxury ones. “We are selling in the middle of the economic crisis, and we are selling above market prices,” he says. “We have many investors coming to us and asking, ‘What is your secret?’”
It comes down to reputation, he says. He believes Lebanon’s best years are still to come. “Land, real estate, restaurants – everything is undervalued.”
One of the most highly regarded contracting companies in Lebanon, Matta and Associates, is handling two of the country’s biggest real estate projects: the building of the $150 million Grand Hyatt hotel and the $100 million Kempinski hotel.
“We offered the best quality-to-price ratio to these two clients,” says Fadi Matta, the company’s administrative and financial manager. “We are known for our quality. Our clients feel very confident when they award us projects, and they always work again with us.”
“There are 15 million Lebanese expats living all over the world who will continue the demand for housing and other goods as they repatriate themselves.”
Chahe Yerevanian, Chairman and President, SAYFCO
A family business established in 1944 and now run by its third generation, Matta and Associates expanded internationally during Lebanon’s more troubled times. “We want to remain a well-reputed family business catering to the needs of a specific niche,” says Matta. “There are going to be many projects in Lebanon, and we want to be a part of them.”
Almabani, another leading contracting company in Lebanon, is active throughout the Middle East, but it has offices in Lebanon primarily for recruiting staff and conducting project research.
Nehme Tohme, Almabani’s president, a member of the Lebanese parliament and a former minister, says the company is not undertaking local projects because of his parliamentary obligations. However, it is currently working in Saudi Arabia on the sewage system in Jeddah and handling a $411 million contract to dig road tunnels under an airbase in Riyadh.
The infrastructure work Saudi Arabia has undertaken as a result of the boom in oil prices has helped Almabani succeed, says Tohme: “We have 17,000 people in our company and we are intending to go bigger. We aim to double our operations in the next three years.”
Manufacturing companies are also reaping the benefits of the property market and making an international impact.
Glassline, which began as a glass-processing factory, now produces everything that involves glass structures, including complex facades and aluminum structures. Glassline has worked on the Larnaca Airport building in Cyprus and the Abu Dhabi Grand Prix arena, and is now looking to Central Asia for new markets.
Such is the level of interest in the property market in Lebanon that one Beirut real estate developer, Dr. Mohammad Saleh, says he has created an online real estate index called Noorex that will display accurate daily prices per square meter on properties anywhere in the world. He plans to make it available this year.
Dr. Saleh, an engineer, is the chairman of Noor International Holding, a Beirut-based group that lists among its projects the development of 11 buildings in Beirut and 12 residential complexes across the Middle East.
It has announced the launch of a walled residential project, Al-Fares, which has a sea view and is located in the Beirut suburb of Dawhet El Hoss, less than five miles from the Lebanese International Airport.
“We are investing huge efforts in building a leadership spirit in our affiliates and personnel.”
Dr. Mohammad Saleh, Chairman, Noor International Holding
The group’s strategy is to enter into alliances with major international companies to provide the highest global real estate standards. According to Dr. Saleh, Noor’s vision is to transform plots of land into flourishing and productive communities. Its mission is to develop and execute world scale real estate projects distinguished by creativity and original designs in accordance with the highest standards of professional competence.
“Our employees are our best asset,” says Dr. Saleh. “We are investing huge efforts in building a leadership spirit in our affiliates and personnel.”
One of the companies in the Noor group contributed to the development of the 1,090- foot-tall Rose Tower in Dubai, described as the world’s tallest hotel building.
Noorex, the group’s ambitious Web site project, will contain search engines for more than 1.23 million real estate brokers. The site will provide an index for real estate markets that is related to stock markets worldwide and available on five continents.
In conjunction with Noorex, the Globe Project will build a massive globe-shaped tower 22 floors high, designed to house an exhibition and conference center and to accommodate, under one roof, law firms, banks and a variety of companies operating in fields such as investment, contracting, building materials and energy supply. According to preliminary studies, Dr. Saleh says the total cost of the global tower will be around $266 million, and the tower will be replicated in several locations around the world.
The motivation for the Globe Project is to move the international market closer to real-time operations. The intent is to make it possible to get everything done in one place much more quickly. It will be possible to carry out transactions more efficiently, with private-sector players from all over the world located in the same building as consular representatives, chambers of commerce, banks and lawyers.
The project aims to incorporate international chambers of commerce to facilitate commercial interactions between countries. Noorex will be on the bottom floor of all Globe Project buildings, and interconnected data will make the market data available in real time.
Dr. Saleh notes that another result will be increased competition and innovation between top real estate companies, as they will become increasingly aware of what their competitors are doing at an international level.
The group is promoting yet another large-scale project with the development of an artificial landmass off the Lebanese coast, to be called Cedar Island. With the new Lebanese government in place, the project can proceed and should ultimately generate 50,000 new jobs. It will take four years to complete.
A Harvard Business School Model of Educational Entrepreneurship
In the 21st century, where innovation and productivity rule the day, human capital is key to prosperity. Hence, parents worldwide look for organizations that deliver first-class education to their children. One such organization is SABIS®, with more than 120 years of experience in education; a global network of schools in 15 countries; and more than 56,000 students.
Since its founding in 1886 in Lebanon, SABIS has understood that education thrives through best practices that apply to dynamic economic sectors. That is why SABIS regards education as a business, applying accountability at all levels and scrutinizing efficiency and costs – continually improving perennial essentials that empower students to face the challenges of an ever-changing world. SABIS measures success by the value added to each student’s academic skills and social responsibility.
The SABIS educational model is more than words. In the U.S., the organization started a private school in Minneapolis in 1985. In 1995, it was granted its first charter school. Today, SABIS operates eight charter schools in five states. Two additional charter schools are operated under license from SABIS in New York City. Applying patented teaching methods and management practices, SABIS has enabled almost all its American students from all backgrounds to attend universities and succeed in higher education. In fact, SABIS was recently the focus of a Harvard Business School case study that showcases its strategic growth targets. The case study illustrates SABIS as a model for business school students learning about global entrepreneurial ventures.
Leaders in Learning
Lebanon’s innovative study centers are teaching the world a thing or two about education.
Peace in Lebanon has boosted enrollment in the country’s higher education sector. Fewer students are studying abroad, while more foreign students are attracted by what Lebanon can offer them.
The Lebanese American University (LAU), one of the oldest of the country’s 15 higher education establishments, experienced a 45% increase last year in students coming from the Persian Gulf states, says Dr. Joseph Jabbra, LAU’s president.
The country’s appeal is understandable, he says: “Lebanon is a microcosm of the world. It is a place for the East and West to meet. Everybody wants to come to Lebanon. Give me five minutes, and I’ll convince you to come live here.”
LAU has a similar appeal, he says, as it introduces its students to a variety of people from many other countries: “We distribute $12 million every year in financial aid to students who have the educational standards we look for but can’t afford their tuition. We feel strongly that there should be a mix of social backgrounds.”
With a total of 8,000 students, LAU limits its population of foreign students to 20%. Even with this restriction, they represent 86 different nationalities.
“We have a six-week program for American and European students to study Arabic and learn about the region,” says Dr. Jabbra. “Last year we had 112 students taking this program, and this year there have been more.”
LAU has seven schools offering degrees in arts and sciences, business, pharmacy, engineering, architecture and design, medicine and nursing.
Dr. Jabbra says the School of Pharmacy is the only one with American accreditation outside the U.S. The School of Engineering, he adds, cannot graduate enough engineers to satisfy demand; the School of Architecture and Design is the best in the region; and the School of Medicine has an association with Harvard.
“We have very high standards. We are planning growth to increase our enrollment to 10,000 students, and I see LAU taking its place in the constellation of the best institutions around the world,” he says.
LAU was originally established as Mrs. Smith’s Beirut Female Academy in 1835 by Sarah Smith – an American Protestant missionary who lived in Lebanon when Beirut was part of the Ottoman Empire – and it became known as the region’s best women’s boarding school.
In 1924, the school started a two-year junior college curriculum and became known as the American Junior College for Women. By 1949 it was renamed the Beirut College for Women (BCW).
Two years later, the Board of Regents of the University of the State of New York granted it a provisional charter and authorized it to bestow a Bachelor of Arts degree, requiring a four-year term. In 1955, the board granted BCW an absolute charter with all attendant rights and privileges, including the authority to also issue a Bachelor of Science degree.
In 1973, having accepted men into some programs, the college changed its name to Beirut University College, and in 1992 it became a known as the Lebanese American University. Today it has approximately 28,000 alumni.
Last year the country’s other internationally acknowledged university, the American University of Beirut (AUB), became the first to gain accreditation for its business school from AACSB International, the longest serving global accreditation body for business schools that offer undergraduate, master’s and doctoral degrees in business and accounting. AUB was established in Lebanon in 1866.
Another educational establishment in Lebanon with a long history is the International School of Choueifat, situated in a suburb southeast of Beirut.
With roots dating back to 1886, the school was the first member of what is now an international network of 75 charter schools. They are run by SABIS®, an education-system organization committed to preparing students for university-level study by providing a fundamental mastery of the educational building blocks through a program of academic rigor.
“Starmanship is changing the way business is done in the Middle East.”
Raja Haddad, Starmanship & Associates
SABIS Educational Services was established in Beirut in 1993.With regional corporate offices in Beirut and in Minnesota in the U.S., it now runs schools in Africa, the Persian Gulf, the Middle East, North Africa and Asia, and it has 58,000 students, says Ralph Bistany, a co-founder of the organization.
“SABIS is a for-profit international educational organization with a philosophy quite different from that of most other educational organizations. We are aggressively promoting the idea that only when education becomes accepted as another industry will it evolve in the right direction.”
One of Lebanon’s newest educational institutions is the Lebanese German University (LGU). Only two years old, LGU will produce its first graduating class in 2011. As a relatively new arrival to the education scene, says Dean Edgard Rizk, LGU will have the competitive advantage of being able to make fast decisions unburdened by a long system of bureaucratic rules and regulations.
Founded by the Lebanese-German Association for the Promotion of Culture, a nonprofit NGO, LGU has developed extensive collaborations with European universities and offers students easy transfer to such institutions.
“We offer multidimensional acquisition of knowledge while promoting exposure to the vibrant Middle Eastern and European cultural mix,” says Rizk.
Study courses are in English, but courses are also available in German and Arabic. The Lebanese-German Association has been involved in the education sector for more than 35 years. In 1974, it founded the Technical Institute of Paramedical Sciences, which since has graduated more than 2,500 students in the field of health care.
“Emphasis is placed upon individual potential and the development of artistic and technical talents,” says Rizk.
Beyond the academic institutions, local company Starmanship & Associates is meeting Lebanese businesses’ demand for methods of enhancing their human resources.
In 1995, following the civil war, the nation’s workforce had to readjust to the peacetime pressures of reconstruction. Recognizing the need for retraining and human capital development, Raja Haddad created Starmanship.
Knowledge of how to perform tasks is essential, but it’s not enough, Haddad says. Starmanship’s training courses are geared to help staff enjoy their work through the discovery of latent talents. “We’ve noticed that after 15 years, we’ve really made a difference. People have changed their perceptions. They have established new companies, grown as individuals, changed their jobs and been promoted,” he says.
Based on the company’s success, Haddad plans to expand to Saudi Arabia. “Starmanship is changing the way business is done in the Middle East,” he says.
It Makes You Feel So Young
In Lebanon, East meets West and inspires luxury brands, a sophisticated lifestyle and vibrant nightlife.
Beirut is regaining its reputation as a sophisticated hot spot for foreign jet-setters, upscale Lebanese expatriates, the affluent, and other Middle Eastern movers and shakers, thanks in large part to the Lebanese lifestyle.
Nearly 2 million tourists visited the country last year – a historic record, exceeding the number of visitors even in the glamorous years before the civil war, when Beirut was known as the Paris of the Middle East.
This year, the total number of visitors is expected to break the 2 million mark. Increasing numbers of tourists are arriving from Europe, the Far East and America, as well as many more from the Arab world and Central Asia.
All of them are drawn by Lebanon’s famous reputation as a place where you can ski in the mountains in the morning, swim in the warmth of the Mediterranean Sea in the afternoon, and eat, drink, dance or gamble the night away.
But there is more to Lebanon than these delights. For Arabs, it is a place where they can enjoy a more Westernized, more liberal experience than they can anywhere else in the Middle East. And for Westerners, it is a place where they can experience Arabic culture without forgoing the amenities and dress they are used to.
Eighteen varieties of Muslims, Christians and entirely secular people mingle easily on the downtown streets of the capital and in its hotels, bars, shops and restaurants.
Locals don the latest international fashions, led by homegrown international designers such as Elie Saab, a favorite of Angelina Jolie; Abed Mahfouz, another Lebanese haute couture star, who is launching a ready-to-wear line in New York this year; and Aïshti, a high-end fashion retailer whose chain of stores carries renowned luxury brands like Dolce & Gabbana, Dior and Jimmy Choo.
“The clientele here is very sophisticated. They know about fashion, and they know the new brands,” says Tony Salamé, Aïshti’s founder and owner.
Maïa N bags offer an example of the luxury brands born in Beirut. Created by Maya and Joanna Nakhle, they are infused with the modernity of Western design and the mysticism of the East – a combination that is the essence of the Lebanese lifestyle. They have become a fixture with international fashionistas and royalty. To underscore his belief in the brand, Jordan-based businessman Mohammed Abu-Ghazaleh bought a stake in the company in 2007.
Even long-standing, century-old Lebanese brands are partnering with celebrities to enhance their image. Mouawad, a jewelry and timepiece company, is expanding on its history and reputation by including collections designed by Heidi Klum.
In keeping with this East-West lifestyle, a host of new five-star hotels has been springing up in Beirut, many of them with extravagantly luxurious suites. One of the newest, Le Gray, is a boutique hotel notable not only for the purple-glass swimming pool on its roof but also for its understated luxury and its display of 500 pieces of contemporary art from around the world.
Many of Lebanon’s restaurants offer the finest of fine dining, and often feature award-winning wines from Bekaa Valley wineries such as Château Kefraya. In 2009, this winery undertook important restructuring work in its vineyard and cellar in order to support its qualitative efforts. Since releasing the 2009 vintage, it has introduced new vines such as Cabernet Franc and Carmenère, and new technologies to produce the wines.
The trendiest of Beirut’s nightspots is Sky Bar, an open-air rooftop venue that attracts huge numbers of the city’s most fashionable smart set.
Designed and built on a grand scale, with dancing, dining and drinking areas all set amid the magnificent Beirut skyline under the stars, in 2008 Sky Bar was nominated as one of the world’s top open-air bars by World’s Best Bars.
Pulsating music is interspersed with performances by international celebrities of the club scene such as Kelly Rowland, Shaggy and Snoop Dogg.
Photo Credits: Meedo Tha
The venue originally opened in 2003 on the roof of the city’s Palm Beach Hotel, but in 2006 it was moved to the roof of the Beirut International Exhibition & Leisure Center.
“We reopened on July 10, 2006, and had two outstanding opening nights,” says Chafic el Khazen, president of Sky Management, the company that created Sky Bar. “But the war with Israel started two days later and forced us to close down.”
Sky Bar reopened in 2007, and now it regularly attracts 2,000 people every night, says el Khazen. His future plans include opening new venues and remodeling Sky Bar. His company has already launched a Sky Beach resort and restaurant in Egypt. In Lebanon, Sky Management plans to open a winter club later this year and a beach club in the summer of 2011. It is also considering the possibility of other projects in Europe.
“By welcoming international artists to Sky Bar, warmly greeting tourists from all over the globe and being nominated as the number-one bar by World’s Best Bars, we are, in a way, trying to change the world’s perception of Lebanon,” he says. “We are working on spreading our culture of love and positive energy to replace the war image.”
El Khazen concedes, however, that Lebanon’s turbulent history is part of the country’s appeal. “The day we have stability, Lebanon will lose some of its charm,” he admits. “We live in what could be described as organized chaos, and this is what makes Lebanon a dynamic experience. But there is undoubtedly one inherent trait that we would like to be recognized for, and that is the joie de vivre that is a common quality in all Lebanese.”
If Sky Bar reflects the country’s latest lifestyle trends, the Casino du Liban represents Lebanon’s iconic reputation as the location of the largest and most famous gambling and theatrical venue in the Middle East.
Situated in Jounieh, a resort town ten miles north of Beirut, the casino, which is celebrating its 50th anniversary, experienced a 30%increase in its gross gaming revenues last year for the second year running.
With an average daily attendance of some 3,500 people, it is facing limits on its capacity and has plans to expand. To cope with the demand, the casino recruited 200 dealers so that it could increase its gaming table hours, but business improved so much that it again reached its capacity and needs to triple its space – a feat that will place it among the largest casinos in the world.
The company’s challenge is fulfilling its growth potential as it endeavors to become the Las Vegas of the Middle East. In order to improve liquidity and provide tax incentives, the casino company is planning to be re-listed on the Beirut Stock Exchange.
The country is also becoming a regional hub for cosmetic surgery. “Lebanon has become the capital of beauty in the Middle East,” says Dr. Nader Saab, an internationally eminent Lebanese plastic surgeon.
“Lebanon has become the capital of beauty in the Middle East.”
Dr. Nader Saab
While the majority of the patients at his clinic are women, more men are taking advantage of the benefits of cosmetic treatments, he says.
“Men have treatments in order to look better and feel as attractive as the women they are with,” says Dr. Saab. He has developed advanced non-surgical procedures for some cosmetic improvements, including the rejuvenation of hands.
Lebanon’s Ministry of Tourism has awarded his clinic a Shield of Honour in appreciation of its contribution to the development of cosmetic tourism.
On top of all its other lifestyle attractions, Lebanon offers one other noteworthy element: significantly lower costs for services than in many countries. “In comparison with Europe, I think we are about 40%less expensive for the same quality services,” says Fadi Abboud, the country’s minister of tourism.
World-class methods meet personalized comfort
Plastic surgery is one niche market that has greatly benefited from globalization, opening the doors to world-class plastic surgeons. Dr. Nader Saab and his Lebanon-based Clinique de Chirurgie Esthétique (CCE) are a clear example of top medical expertise and technology made available to demanding global clients. CCE – the world’s only private aesthetic surgery clinic – offers its patients the discretion and comfort needed while undergoing plastic surgeries, cosmetic treatments and nonsurgical procedures. Every procedure at CCE is approved by the U.S. Food and Drug Administration, a feature that underpins the clinic’s credibility. Dr. Saab will soon add a hotel next to CCE in order to consolidate comfort and state-of-the-art amenities before and after surgery. Remarkably, Lebanon’s Ministry of Tourism granted Dr. Saab the prestigious Shield of Honour award.
A strategic legal foundation for business growth and expansion
Diversification is a strong predictor of an enterprise’s chances for success in the global economy. A firm that provides competitive services in different economic sectors and to diverse clients is poised to thrive. Notably, in the last decade, Abou Jaoude & Associates Law Firm (AJA) has done just that – gaining a considerable local and international client base and reinforcing its status as one of the leading law firms in Lebanon. The private partnership company, founded by Carlos Abou Jaoude, started off its practice servicing telecom and other multinational companies, and has developed a solid reputation advising major corporate, banking and finance clients dealing with complex transactions. Moreover, AJA has become a vital one-stop shop for leading international investors.
Corporate law, banking and finance are at the core of AJA’s practice. In a world of complex financial architectures and regulations, AJA helps its clients manage operations and raise capital through strategic advice. Indeed, global competitiveness is increasingly based on strategic legal and regulatory information. AJA helps corporations, banks and financial companies achieve their business objectives within the myriad regulations on capital adequacy and banking, securities, taxes and other laws. AJA’s lawyers have close relationships with major banking and financial players in Lebanon and abroad.
At the same time, AJA continues to provide first-class legal services to telecom, media, advertising and technology businesses. Thanks to its solid network of operators and consultants in Lebanon, the Middle East and Africa, AJA is well positioned to advise on telecom issues such as licensing, bids, acquisitions, joint ventures, privatizations and corporate re-structurings. AJA also has developed an expertise focusing on new media and intellectual property issues such as the registration and protection of trademarks, the implementation of privacy policies, the acquisition and protection of content rights, and the utilization of digital technology.
Additionally, AJA has diversified its practice to the rapidly growing real estate services sector. The firm’s lawyers bring crucial expertise and innovative legal solutions to large real estate project developments and a broad range of construction-related legal subjects, including large architecture and engineering works, retail properties, hotels and resorts, and industrial projects.
AJA has also represented and advised clients on tax and inheritance planning in various jurisdictions, insolvency and debt restructuring of multi-business groups, and franchising.
Making a Name for Themselves
Thriving family businesses are using franchising to spread their growing brands around the world.
As the Lebanese economy expands, a profitable relationship is developing between the country’s numerous family businesses and the franchising system.
More than 90% of businesses in Lebanon are family owned, and many of them are turning to franchising to widen their international presence.
Charles Arbid, the president of the Lebanese Franchise Association – formed four years ago to encourage the creation and expansion of franchising – says the organization has more than 100 members with 1,000 points of sale in 35 countries.
Cafe Najjar, a Lebanese coffee company that’s among the largest coffee companies and distributors in the region, is successfully franchising its brand across the Middle East and North African region.
“We are the only major franchise worldwide that carries the three major varieties of coffee – American filter, espresso and Turkish,” says Georges Najjar, the son of the company founder and its current chairman. “Our espresso is equal to Italy’s illy, and our American filter is equal to Starbucks.”
The company imports beans from Brazil and roasts, packs and distributes them. It also makes the cups for its coffee shops and sells coffee from machines in offices, hotels and restaurants.
Cafe Najjar has developed a special grinder and a method of mass-producing Turkish coffee. It has also developed a pushbutton machine for preparing Turkish coffee that is going into production in China, and it has a prototype of a similar one for home use.
The company stayed open during the entire civil war and actually expanded into international operations during that time.
“We were able to do so simply because our employees came to work every day,” says Najjar. “Why did they take the risk? Because it’s in the DNA of the Lebanese. It’s in their minds, in their egos. They say: ‘I want to fight this war by going to work.’ This is what kept us going.”
It was during the civil war, which lasted from 1975 to 1990, that Cafe Najjar started selling Turkish coffee to the Syrians, Palestinians and Egyptians.
It now has a franchise presence in Saudi Arabia and Qatar and is establishing one in Ukraine for its espresso coffee.
There are many other successful franchise businesses in Lebanon. Ghia Holding – which owns the Duo, El Paladar and the Abdel Wahab restaurants in Beirut – has opened Abdel Wahab franchises in Amman (Jordan), Saudi Arabia and Kuwait, as well as a fourth restaurant, Al Saraya, in Libya.
“Our goal is to cover the
opportunities where we are, here
before making an idea a project or a reality.”
Nadim Tewtel, Chairman, Unicart Mana Automotive
Al Baba Sweets, a family business dating back to 1950, has expanded into nine points of sale with more than five production lines in the Middle East. Patchi, a luxury chocolate brand, has 140 boutiques in 28 countries around the world.
Another Lebanese business that flourished during the war years and continues to do so today is Unicart Mana Automotive, a luxury-car dealership that last year won acknowledgment for selling more Land Rovers than any other showroom in the Levant and North Africa.
The company, which has been family run for 50 years, sold 546 of the vehicles, a 26% increase over its sales the previous year.
Nadim Tewtel, the company’s chairman, acknowledges that its success was due at least in part to the Range Rover Sport’s popularity and the strongest Land Rover product portfolio in the brand’s history.
The luxury-car market in Lebanon has performed remarkably well in the past couple of years. Unicart Mana Automotive sold 25 Aston Martins last year – a record number – and as many Land Rovers and Range Rovers as ever. “There are five Range Rovers for every Porsche Cayenne in Beirut,” says Tewtel.
He has considered expanding abroad: “Our goal is to cover the opportunities where we are, here in Lebanon, before making an idea a project or a reality.”
The rule for doing business in Lebanon, says Tewtel, “is to be cautious, and if things go wrong, calculate whether you will survive. However, companies that survive are the ones that were not scared to invest, even in the most difficult days of the past.”
All monetary figures are stated in U.S. dollars unless otherwise indicated.
Director: Lucas Montes de Oca / Managing Editor: Beverley Blythe / Editor: Michael Knipe / Art Director: Lisa Pampillonia / Project Managers: Eduardo Magaña, Corinne Frenzel and Ryan Pekarek / Project Development: Clinton Cossette / Commercial Director: Carolina Mateo / Cover Photos: LAU; Nabil Mounzer/Corbis; Alan Gignoux / Alamy; Sky Bar
This special advertising feature was produced by Insight Publications, a division of Impact Media International Ltd. 150 East 55th Street, 7th Floor, NY, NY 10022, USA. Tel: +1 212 751 1900 Fax: +1 212 751 0088 www.insight-publications.com e-mail: email@example.com
Forbes Custom is a custom publishing site that features
special advertising sections from Forbes magazine
as well as industry articles and videos from our partners.
The editors at Forbes were not involved in the creation of this content.
Site Developed by SmartMark Communications, LLC
© Forbes Magazine, All Rights Reserved