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Success story: Ernesto Zarzur

The construction kingpin

by Joe Dyke
Ernesto Zarzur in Sao Paulo, Brazil, 17 June 2014.

This article is part of an in depth special report on the Lebanese in Brazil. Read more stories as they’re published here, or pick up July’s issue at newsstands in Lebanon.

Ernesto Zarzur likes to think of himself as the patriarch of his family — one that he considers to be 4,000 strong. The chairman of Eztec, one of Brazil’s largest construction firms with annual post-tax profits of over $200 million, he is unashamedly unconventional in his management style.

Wearing his trademark sunglasses, the 80 year old conducts a full tour of his 400-strong head office to check all is running smoothly — a practice he carries out at least twice a day. With the informality common of Lebanese leaders, he stops regularly to kiss employees on the cheek or the head. And when he says his company is his family, he also means it literally — eight of his 16 grandchildren work there, while the company’s chief executive title is rotated between his four sons.

He admits it is a highly unusual and potentially controversial structure, but one that he says is inspired by his Lebanese roots. “In this market there are around 20 [major] companies … The way I run this company is different to any other — it has a lot of the characteristics of a Lebanese family,” he says. In fact, when the company initially floated on the Brazilian stock exchange in 2007, some leading banks declined to invest because of the presence of the four brothers on the board. “We were saddened because my sons have worked in the market for 30 or 40 years,” Zarzur says.

A year later his personal approach came up against the market for the first time since the IPO. With the financial crisis hitting, Zarzur cancelled a number of projects and decided to wait out the storm. “I had about $700 million in the bank and I said because of the crisis I am not going to do anything with it.” The share price plummeted from $8 to $1, yet Zarzur persisted. “They called me crazy. I said ‘I am not going to use your money now but it is safe with me.’”

Eight years on, and with the share price having peaked at over $17, Zarzur believes his approach has been proven right. In the past year the company grew at over 13 percent, with return on equity over 35 percent — the second-highest in Brazil’s construction sector. “The companies that did [invest in 2008] are still trying to recover now,” he adds.

The man himself is estimated by Forbes to be worth $1.1 billion, Brazil’s 62nd richest person and sixth richest in the construction sector. Yet his upbringing was a relatively humble one, the grandson of a Lebanese emigrant.

His father ran a textiles firm and, he says, was a tough but fair man who taught him all he knows about business — even cutting off his inheritance to teach him a lesson. “I was the only one of the six sons that didn’t work with my father; I didn’t like the constant noise,” he recalls. When he left, his father told him he would get no more money from him, a decision that initially angered him.

It would be a decade before Zarzur finally understood his father had been forcing him to succeed for himself. “Many years later my father came to see me and told me he would give me my inheritance back now that I had succeeded. I said ‘thank you father but today I am a lot richer than you.’ This is the spirit of the Lebanese — to work.” While his sons may alternate the role of chief executive, it is clear the ultimate decisions are still not theirs to make. “I don’t command, I evaluate the commands and see if everything is going ok. My job is to see everything, all big decisions go through me.”

Throughout the meeting with Executive, he makes numerous references to Lebanon — trips made during the 2006 war, the Club Monte Libano that one of his sons is now president of, the values he ascribes to his country. It is clear he considers himself a real patriot and would love to see the country grow. Yet even still he can’t imagine investing in the country in the near future. “If these [security] problems didn’t occur, then maybe,” he says, adding without any sense of irony, “yet with so many Syrians I am not feeling comfortable.”

Zarzur sees no contradiction between his commitment to Lebanon and his belief that many of its brightest could seek their fortunes elsewhere. For him, Brazil can still offer opportunities for those seeking to escape. “Some of those [Lebanese] that came ten years ago are now millionaires. It is still a land of opportunity — all you have to do is work.”

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Joe Dyke

Joe has extensive experience covering the Syrian crisis, oil and gas, and Lebanese government and regulatory authorities, among other topics. He was Executive's online editor from 2012 to 2014, and led the Economics & Policy section from 2013 to 2014.

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