For most people, summer means lazy days lounging by the swimming
pool, catching rays. But for Salim Makhoul, summer is
time to make money. In 1969, he founded Aquarius, a company
that has built the swimming pools of such prestigious beach
resorts as Rimal, Portemilio and Halat-sur-Mer. But pools are just a
small part of Aquarius’ business activities. The firm also installs luminous
fountains, offers water treatment services for residential and industrial
areas, assembles desalination and sewage treatment systems and
supplies equipment to recycling plants and pumping stations.
Aquarius is an almost recession-proof business. Between 1995 and
1999, as the economy plunged into its current abyss, Aquarius’ overall
revenues actually increased about 20% to $50 million. Last year,
profits totaled more than $6 million.
In contrast, Emco Engineering, a competitor that does water and
sewage treatment projects for industries but not swimming pools,
saw revenues drop to $4 million between 1998 and 1999, a 30%
decrease. This year, however, Emco is expecting revenues to jump
to $8 million. Water Tech, a manufacturer of swimming pools, is
projecting a l 0% drop in revenues by the end of 2000, although sales
increased from $2.2 million in 1998 to about $3 million in 1999.
Aquarius has been able to ride out the hard times because 92%
of its business is outside Lebanon. In 1978, Aquarius became the
first Lebanese company to do water treatment projects in Saudi
Arabia. In 1999, the firm opened an office in Egypt, a market that
generated $1 million in sales during its first year.
Water Tech has not been as successful in foreign markets.
Although the company has completed a few projects in countries such
as Syria, Jordan, Egypt and Sudan, it has not yet opened an office outside
of Lebanon. “It isn’t as easy anymore to establish yourself
abroad,” says Charbel Yazbek, owner of Water Tech. “It’s too late for
that now.” Emco, on the other hand, has generated considerable revenue
from outside Lebanon. The firm has worked in Saudi Arabia,
Iraq, UAE and Egypt. “We don’t rely on Lebanon as a source of income,
” says Elie Shalhoub, Emco’s business development manager.
“Eighty-five percent of our business is abroad.” But Emco’s revenues
of $7-$10 million are only a fraction of Aquarius’.
Local waters have not been very inspiring for Aquarius. But even
at home, the company’s sales have not belly flopped. Demand for
swimming pools dropped by 50% in Lebanon this year and the number
of projects for Aquarius declined by l0%. Nonetheless domestic
revenues edged slightly upward, from almost $3 million in 1998
to $3.3 million in 1999. In contrast, Aquamania suffered a 30%
decrease in revenues this year, according to Jean Nakouzi, the firm’s
general manager. Aqua Pro has been having similar problems.
“We have 50% of the local market,” says Makhoul. But
Yazbeck believes that Water Tech is quickly gaining ground.
“We built 12 swimming pools more than Aquarius last year.”
One reason for Aquarius domination of the Lebanese market
is its strong maintenance and after-sales service department.
Eighteen employees attend to the needs of2,800 clients once or
twice a week. The company charges $15 to $75 per maintenance
visit, depending on the location. Emco, which hasn’t given as
much importance to this division, charges between $50 and
$150 for a service call, depending on the location and system complexity.
“We have not focused on services as much as Aquarius,”
says Shalhoub. “It’s very difficult to take a business away from
Aquarius, because they protect their clients. They have done that
very well.” Yazbek disagrees. ‘They don’t follow up on their customers
as much as we do,” says Water Tech’s owner. “Some clients
started working with Aquarius but ended up with us.” Water Tech ‘s
prices range between $25 and $100 per visit, if chemicals are not
used, and between $100 and $1,000, if chemicals are used.
Aquarius, however, has its shortcomings. Its prices are much higher
than its competitors’. While the firm charges $10,000 on average
for a six-by-12-meter swimming pool, Water Tech’s price is
around $8,000. Aquarius charges between $1,000 and $2,500 for
an automatic swimming pool cleaner while Water Tech charges
between $700 and $1,800. “We lost some of our market share due
to our prices, but we have kept our name,” says Makhoul,
adding that the company imports all the parts and equipment it needs and
assembles them locally.
Emco, whose prices are usually 5% higher than the rest of the market,
follows the same philosophy. The firm designs, manufactures and
assembles most of its equipment in its Byblos factory and only
imports certain items such as pumps and valves. This helps the company
cut costs. “A lot of customers call because we offer the best service,”
says Shalhoub.
Even its competitors
admit that Aquarius is a
firm to be reckoned
with. “Only companies
like Aquarius survive in
this fluctuating market small
ones are eventually
weeded out,” says
Shalhoub. Yazbeck concurs:
“I consider them
one of the best companies in Lebanon.” And 2
when your rivals say
you are good, who’s to
argue to the contrary.
