The ongoing political instability in Lebanon has taken an economic toll on the embattled nation, but it seems that foreign companies in the Mediterranean country have not been dissuaded. The recent removal of the barricades opposite the downtown branch of Sir Richard Branson’s Virgin Megastore in Beirut not only brought improved access for shoppers, but also an announcement that the company foresees expansion in the near future.
The major international electronics brand Sony has beat them to the mark, however, with their new 170 square meter Sony World showroom in the ABC Ashrafieh Mall. This showroom comes in addition to the previously established Hamra branch. Ziad Asmar, responsible for Sony at Fattal Holding, the sole distributor of the brand in Lebanon, said that despite the current situation Sony saw growth this year in Lebanon. He suggested that an “expanding line-up of products” has helped the brand stay competitive. He also noted that Sony caters to “financially secure customers, meaning that people delay rather than cancel their purchases.”
Other foreign product lines in Lebanon have also been expanded or will do so in the near future. AZElectronics has opened a 400 square meter store in Sami Solh Avenue to exclusively showcase their Whirlpool and Phillips home appliances. They also expect to open another store in Kaslik in early 2008. Commenting on the difficulties in the country, the chairman of AZElectronics, Andre Zalum, said, “Here in Lebanon, we are used to instability. Life goes on and so does business.” He added that profits remained stable from 2006 to 2007 and that the overall volume of sales has increased. Due to the weak dollar the company has been trying to source products from the United States and the Far East as they are now cheaper than goods from Europe.
Total number of registered foreign companies
Anticipation and expansion
The German automaker Volkswagen has joined the expansion trend as well with their new 800 square meter showroom on the Dora Highway. Inaugurated in October 2007, the new building makes for a larger, flashier venue than the previous structure. The sales manager at Volkswagen, Gergi el-Murr, stated, “Volkswagen believes in Lebanon and expects further expansion in the future.” He said that despite the instability, business has been stable for the past three years and that growth is anticipated in 2008.
But it’s not just previously established foreign products that see a future in Lebanon. According to a report from the Lebanese Ministry of Economy and Trade, 44 foreign companies registered to do business in Lebanon in 2007. That’s up from a wartime low of 34 in 2006 and a year-on-year growth of 29%. It should be noted, however, that this growth only brings the foreign company registration rate back to its pre-July War levels. Twenty-six of the companies are non-Arab and many of those are from the United States and Europe, including the American television news station NBC News and the UK airline British Midland International (BMI).
The Lebanon route came to BMI as part of a packaged take-over of 17 destinations, according to BMI sales manager Maria Sabbah. “We have daily flights from London to Beirut, which is more than any local carrier.” She explained BMI optimism over the deal, saying “this proves that we have faith in Lebanon. We are excited about expanding into the Middle East and Lebanon is high on our priority list.”
While sellers of locally produced products quietly wait for their leaders to usher in the next phase of Lebanon’s never-ending political drama, foreign product vendors and companies have adopted a somewhat more optimistic approach. They seem to speak with a unified voice: Business must go on.
