Executive Magazine

Firing up the frozen desert

by Nadim Mehanna May 3, 2012

written by Nadim Mehanna

As the last snow melts on Lebanon's mountain tops and with the ski season firmly over, ice racing is probably not the kind of driving experience you are gearing up for. But Lebanon's coldest winter in more than a decade certainly proved advantageous when our team went to the Arctic Circle for some extreme driving on ice, with Lebanon's mountain roads and abundant snowfall having provided a degree of preparation for extreme driving in minus twenty degrees Celsius.

The ice circuit in Sweden's Lapland came about by chance some fifteen years ago, when a research team from Bosch accidentally arrived at a dot on the map called Arjeplog and found the perfect environment for testing equipment in sub-zero conditions. Bosch was soon joined by German car manufacturers for the same reason, creating replica racing tracks like Formula 1's Hockenheim, Indianapolis, the Euro Speedway and the Spa Francorchamps.

No brakes, all engine

So when Mercedes’ AMG asked us to stay at their Arjeplog lodge we leapt at the chance. After the plane touched down on the ice, the first stop was the garage: three lines of 15 E63 AMGs, C63 AMGs and the new SLK AMGs. Our group jumped into the E63 monsters with 525 horsepower and 700 Newton meters (Nm) of torque, to take us to an iced-over lake that, once out of the car, was so slippery we nearly ended up on our backsides.

The first firm order from instructor Bernd Schneider, five-time winner of the DTM (German touring car championship) and an ex-Formula 1 driver, was to “DSC OFF” — all electronic aids deactivated, so no guardian angels and just spiked tires to help stay on the “track.”

The first push on the accelerator delivered such a rush of torque that the spikes were unable to cope with it and the car went on a 80 degree drift. Running through bends at a 100 kilometers per hour there is some serious G-force at work that can only be countered by steering, throttling and never breaking. But despite the E63 AMG weighing in at two tons, the chassis was incredibly stable while the surgically precise throttle, the torque and the power made the AMG a cinch to drive in that icy wasteland.

The next morning was spent roaring around the simulation race tracks, and in the afternoon the AMGs were fitted with on-board cameras with telemetry equipment for the competition to really begin. With a benchmark set by Schneider of 1.22.30, the AMGs set off one by one, with the teams keeping a watch out for cars that slid off into the snow banks on either side of the tracks. Any car requiring a tow from the G Class Mercedes cost the team a point, so there was a lot of snow spraying around as drivers tried to get back on the ice and team members puffed and panted to push the car out as best they could.

Drifting to win

After the race was over, telemetry analysis started with most recorded times 5 to 10 seconds slower than Schneider’s time. Then it was announced that the Lebanese team had collectively scored the fastest times, even slightly faster than Schneider's, although it must be said that he did not set his best time ever. Given the competition out on the ice, Schneider was surprised by the Lebanese effort, quipping: “You guys are really quick, where did you learn how to drive on snow in the desert?” Obviously, the remark was met with more than a few raised eyebrows.

The last day was spent on faster tracks where drivers could really let the cars go full out, drifting at speeds of up 130 km per hour. It soon reached a point where drifting became almost second nature. While the AMGs were incredible out on the “rink,” we also drove the SLK 55 and C-Class 63 Coupe. The C63 Coupe was over powered for such conditions, and the SLK was the by far best on ice, being smaller and feeling like your were almost go-carting as the car drifted around the track.

Overall, a highly recommended trip, a total disconnection from everything and the ability to drive in a way you would never normally experience, even if you managed to get your car to the top of one of Faraya’s ski slopes.

May 3, 2012 0 comments

Comment

The celebration of suffering

by Jihad Yazigi May 3, 2012

written by Jihad Yazigi

The announcement by French Foreign Minister Alain Juppé on April 17 that Syria’s foreign currency reserves had halved since the beginning of the popular uprising in the country is hardly something to celebrate. Valued at $17 billion at the end of 2010, they would now be standing at some $8.5 billion according to Juppé’s estimate.

Providing a correct measure of Syria’s foreign reserves has always been problematic. While in most parts of the world foreign reserves are handled by the central bank, in Syria they are managed by two separate institutions: the Central Bank of Syria and the Commercial Bank of Syria (CBS). This is a consequence of the fact that CBS has been acting for decades as the bank of all public sector enterprises, including the Syrian Petroleum Company whose exports of crude oil were the main source of the Syrian government’s foreign reserve accumulation in the last 20 years.

The foreign assets previously known to be held by these two banks, however, adds up to only about $10.7 billion — somewhat short of $17 billion. One explanation for this, according to some insiders, is that not all reserves are calculated at the same conversion rate, with some pegged at 47 Syrian pounds to the United States dollar (the going rate at the end of 2010), and others at 11.5 pounds to the dollar (a rate the government used in some transactions until the late 1990s). The conclusion of all this is straightforward: you cannot rely much on Syrian central bank data.

But let’s go back to Mr. Juppé. The French FM made his announcement a few days before foreign ministers of western countries were set to meet in Paris to discuss additional sanctions on Syria. The collapse of Syria’s reserves was presented as a success for the international community in using sanctions to inflict damage on the Syrian economy — and, as a consequence, on the regime, as many analysts would have us to believe.

However, one needs to be clear: rejoicing in a country losing in less than a year assets it took decades to accumulate is simply insane, if not cruel. The implosion of Syria’s middle class and a gradual decline in the average purchasing power began in the mid-1980s, when a severe foreign currency crisis reduced the country’s reserves to the equivalent of less than one month of imports. Things began to improve only from the latter part of the decade when the first oil fields discovered by Royal Dutch Shell and Total S.A. began production.

Syria’s production of crude oil then increased gradually until it peaked at around 600,000 barrels per day in 1996. The period witnessed strong economic growth but also the implementation of a strict austerity program by the government, similar in many ways to the stabilization measures applied by the IMF in various countries across the world.

This program was strongly criticized by economists, and has been blamed for the state’s disinvestment from vast segments of the economy and for the stagnation in real incomes, but it had one benefit, namely saving foreign reserves for future generations.

This is what Syria is now set to lose. Not only are years of efforts being spoiled, but it is the reconstruction of the country that is rendered more difficult; future investment requirements that are made more difficult to fund. One good argument for this state of affairs, from the point of view of Western governments at least, is that a weakening of the state — because that is what the fall in reserves is about — would lead to a weakening of the regime and as a consequence to its fall.

There is historical precedent. This is exactly what many decision makers were saying in 1990 when sanctions were imposed on Iraq. We all remember the consequences of that, not least that Sadam Hussein stayed in power for 12 more years. In the meantime, the Iraqi population suffered, its social fabric was destroyed, and millions were displaced and driven into poverty. Failed sanctions were then followed by an American-led invasion.

May 3, 2012 0 comments

Society

Lacking the LUXury

by Yasser Akkaoui May 3, 2012

written by Yasser Akkaoui

The problem with opening a restaurant that pleases everyone’s palate and becomes one of the city’s institutions is that if you try to do it again, you have set the bar so high that you might not make it over. Such is the case of Beirut’s latest upper-crust addition to the cities cuisiniere: LUX. Brought to us by none other than the same Johnny Farah and co. behind the famed and flavorful Casablanca, LUX has the feel of an upstate New York-style dinner with the clientele of Brooklyn’s Peter Luger Steakhouse.

What its creators understand well is the economics of proximity: the Marfaa district of Beirut is fast becoming our version of the Empire City’s Meat Packing District with names like Farah’s own IF, Karen Chekarjian’s Atelier and Robert Keyrouz’s boutique, all choosing it for its ‘edgy on the water’ feel. But its not there yet.

All the districts that have become our capital’s bohemian bread and butter — from Monot to Mar Mikhael — started with a select few flagship locales before bursting out into multi-million dollar industries in and of themselves. To reach this critical economic mass, those first few concepts have to be airtight, not places that lose steam once people figure them out.

For those of us who expect the quality and feel that Casablanca gives us (and we do), the Asian fusion at LUX leaves much to be desired, apart from the meat Carpaccio, but do not try the fish as it is, well, fishy. What is perhaps even more perplexing is how an organic salad made by the same folks at Casa can taste so different — now that takes talent. And even for those of us who don’t mind spending a little extra to get a little more, a nice bottle of wine and a par-for-the-course dinner shouldn’t cost $250, even if the bottle docked me around $100.

This can all be overlooked if the ambiance can cover for it. But apart from the character the rusty sign at the entrance brings — which I recall seeing at the Carawan Gallery just a stone’s throw from the place — there is not much else to keep me enthralled except for the politeness of the staff.

One thing that works at the moment is the clientele. Already, given the name and the area, the people you want to see and be seen by are there. But even if you strike up a conversation with the jolly bartender and then look around for less-busy company, you will find it hard to make the usual eyes around the room. Unlike Casa, the layout of LUX means you will be poking your head around the corner and glaring across the room, instead of flicking a glance at the lady in red.

If LUX were just another addition to an already thriving district of bars and restaurants perhaps its shortcomings could be overlooked. But as a flagship restaurant of the Marfaa district it lacks the lure to drive people away from their comfort zones in other parts of the city. So, like many things in life, the original turned out considerably more captivating than the sequel.

May 3, 2012 0 comments

Comment

We’ve heard that joke before

by Thomas Schellen May 3, 2012

written by Thomas Schellen

April has the connotation of pulling people’s legs. On April 1, for example, Israel’s naval commander Major General Ram Rotenberg’s ordering of three vessels to prepare an overnight sail to Naples to commence a 10 day exercise. Reports on Israel Radio said officers and crew were not amused when they found out on Sunday morning, after working through the night, that the whole thing was their commander’s idea of a wholesome joke. April Fools! One hopes it was not meant as such a cruel jest when it was suggested that Lebanon could get a new techno park for entrepreneurs — a locale where startup companies and small enterprises with a high-tech edge could avail themselves of broadband connectivity and hard and soft business infrastructure. Yet when two highly positioned voices in the Lebanese socioeconomic fabric said, in a curious coincidence of timings just ahead of April 1, that they could provide the country with a techno park, more than one person asked me if I thought they were serious.

The economic heavyweights who announced techno park project ideas were Mounir Douaidy, the general manager of Lebanon’s urban developer, Solidere, on March 29, and Nicolas Sehnaoui, the minister of telecommunications, on March 30. Doueidy positioned his projected park in Solidere’s Waterfront District while Sehnaoui pointed to a government property in the municipality of Dekwaneh.

The idea of a techno park is neither bad nor new. Clustering of businesses is a good way to enhance competitiveness and generate synergies. The concept rose to global acceptance in the 1990s through the mother of all information and communications technology (ICT) clusters, Silicon Valley. The datedness of the techno park concept, however, casts the first doubt over the seriousness of these latest Lebanese projects. There have been at least three major aborted ICT park projects in this country among the many victims of Lebanon’s chronic disease of unrealized projects. The latest attempt was called the Beirut Emerging Technology Zone (BETZ). Researched from the late 1990s, this tech zone project was finally shipwrecked about five years ago in Damour, the sleepy coastal town south of Beirut selected as “perfect” for locating the zone.

Why would a new Lebanese techno park succeed, more than a decade after other countries in the Middle East established their ICT clusters, such as Smart Villages in Egypt and Dubai Internet City in the United Arab Emirates? On the other hand, the absence of first-mover and big-size advantages doesn’t predicate failure of a good concept. Also, the success of other clusters in the Middle East (and some will argue, of Lebanon’s Berytech technopole) demonstrates the potential of new techno parks. The next question is why did Lebanon’s ICT zones never get off the ground at the time when they were avant-garde projects? Dumb question, sad answer: politics, of course. BETZ ran into petty political cliffs even on the municipal level. Looking at Damour in hindsight, it seems it was much easier to build beach resorts than create ICT clusters. This notwithstanding, there is no disputing Lebanon’s comparative advantages vis-à-vis other locations in the Middle East in human capital, entrepreneurial spirit, and even private sector business dynamism.

The ingredients are there, but are the consensus and will strong enough to overcome political inertia and clusters of administrative incompetence? This crucial question returns us to the issue of insincere projects and reputation management. Douaidy was sincere on the company’s agenda by saying that Solidere was thinking about making Waterfront lots available for the project on a temporary basis as, “it could be a few years before we start selling these lots for development.”

Even before his presentation at the ArabNet entrepreneurship summit in March, members of his team emphasized that Solidere is “only thinking about a techno park in the Waterfront.” Asked almost a month later if there was any progress on the idea, they said, no, not really.

It is true that temporary projects in Lebanon mysteriously instill more confidence than big master plans. But will a consultation with entrepreneurs and a presentation of a good idea be enough to start us on an ICT cluster in Beirut, where budding Lebanese entrepreneurs can gear up in the next few years toward serving the growing markets of countries such as Iraq and, hopefully, Syria?

Methinks not. Kindly, Lebanon, prove me wrong

May 3, 2012 0 comments

Business

Rooted in the roof

by Thomas Schellen May 3, 2012

written by Thomas Schellen

When people mess with botany in the design sort of way, you either get a sculpted garden or a jungle feeling. The former can be as totally enthralling as the Jardins du Château de Versailles, but at the economic cost of having to be manicured constantly and at the ecological expense of being and appearing highly artificial.

The less obviously intrusive design is the hallmark of the organic approach, which appears to be working well enough on the business side for Green Studios, a recent Lebanese entrepreneurial venture. Green is so ueber-in as a corporate marketing mantra that it is almost prohibitive to trust a company that comes bearing a green moniker on its forehead. But you can trust the business story of the Green Studios venture to be solidly rooted in the most traditional art of shaping and uplifting the human environment with greenery: they design and deliver rooftops and walls that resemble green fields and gardens. “We are a local startup of four major partners, each coming from a different discipline,” said Jamil Corbani, chief executive of Green Studios.

The twist is that the partners in Green Studios have approached this conventional business with some novel homegrown research and development (R&D), a patent (how rarely does a reporter hear of new patents made in Lebanon), and have sprouted from zero revenues to profitability in only the company’s second year, with a net income of slightly over $100,000 on revenues of $471,000 in 2011.

Profits bloom

For the current business year, (which ends on August 30), Green Studios predict a year-on-year increase of 17 percent in revenues to $550,000 and 7 percent net income hike to $110,000. Corbani said revenues and gross profits from September 2011 to February 2012 jumped 300 percent when compared with the same period in 2010 to 2011, implying that the company made a huge leap in the second half of its fiscal 2011. Green Studios was incorporated on September 1, 2009.

The elements driving their growth spurt were initial market exposure through the Project Lebanon exhibition in June 2010, registration of its patent in April 2011, winning of an entrepreneurship award from the Beirut Traders’ Association and Bank Audi in June 2011, and landing a green wall project with the Lebanese benchmark developer, Solidere.

“As soon as we registered the patent we were well positioned for business,” Corbani said. He called the win of the first prize in the Beirut Traders’ Grow My Business (GMB) competition “super important” for boosting the team’s morale and for building the company’s momentum, in combination with the contract for the green wall in the Sweat Tea hospitality establishment in the Beirut Souks, the flagship commercial development of Solidere.

Working on the Sweat Tea project with a renowned French landscape architect and expert in green walls provided Green Studios with a huge learning experience, Corbani said. The company furthermore established contacts with a German firm, ZinCo Green Roof, which holds a number of patents in the technology. According to Corbani, Green Studios will collaborate with ZinCo on green roof technology for hot climates. Joachim Stroh, a spokesperson for ZinCo, confirmed to Executive that the two companies had signed a letter of intent.

The German firm, which has activities in about 40 countries and on its website claims to be a global market leader in the technology of green installations, eyes the Arab market for expansion, Stroh said.

Remarkably, the evolution of Green Studios did not, at least not initially, involve any market research or business plan. It was more of an existential move, as his spouse’s determination to have the couple’s first child in Lebanon motivated Corbani to look for an entrepreneurship opportunity in their home country where he could use his training as an economist and experience in hydroponics and agriculture. Linking up with friends versed in architecture, landscape architecture and agricultural engineering, led to the establishment of the company.

Each contributed modest financial capital — the company’s description in the business outline submitted to GMB put its combined common equity and additional paid-in capital at $106,000 — with Corbani the largest single shareholder at 46 percent. The partners split their investment capital equally between R&D into hydroponics and plants on one hand and landscape design capabilities on the other hand. The firm’s operational bases are a nursery in Tabarja, north of Beirut, and a small design office in the Beirut suburb of Antelias.

According to Corbani, the firm’s competitive edge lies in its specialization in green installations in hot climates. Its patent is for a “skin”, the plantable surface that can be mounted on a wall or roof to make it a green wall or roof.

The market size that Green Studios sees in Lebanon is only a rough guess. “We estimate that three percent of landscaping jobs are high-end jobs and that five percent of these high-end landscaping jobs are up for grabs [for the company]. This gives you a target to reach $3 million to $4 million annually after five years,” Corbani said.

In pursuing its long-term commercial aims of becoming a leader in green installations suitable for hot weathers, the company now wrestles with two objectives of doing more R&D and acquiring more business through regional expansion of operations. “Our main concern is how we will really balance these two, because we are very young and have time to grow,” Corbani said.

Balancing growing and growth

He aims to achieve the balance by registering several patents in the United States and through establishing a base outside of Lebanon as a platform for the next growth stage. “Then strategically I would be interested to team up with an American or Japanese company that is willing to enter into the hot-weather markets. I want to have such a partner.”

In the meanwhile, Green Studios is competing for work on high-end residential projects in Lebanon like the Beirut Terraces, an apartment tower scheduled for construction across from the Phoenicia InterContinental and Monroe hotels in the central district.

By midyear, work is also expected to start on a green roof for one block of the Hamra head office of Banque du Liban (BDL), Lebanon’s central bank. The initiative is a collaboration of BDL and the United Nations Development Project’s (UNDP) energy efficiency support program for Lebanon, dubbed Cedro.

Cedro-UNDP has taken the project through its preparatory phases to the point where three competitors for the project have been short-listed — a joing bid by Green Studios and ZinCo among the three — and the contract is to be awarded and execution to commence within two months from end of April, according to Cedro-UNDP Project Manager Hassan Harajli.

The project is for an intensive green installation with about 80 percent greenery and 20 percent recreational space for central bank employees, and thus fits the high-end categorization. Harajli told Executive he could not provide an estimate of the project’s value, but added that UNDP had allocated a budget and the BDL had committed to filling eventual funding gaps.

According to Harajli, Cedro will use the project to measure the green roof’s energy savings effect on the heating and cooling of the very active BDL floor located beneath, as a case study for energy efficiency.

But it is also a standard-setting project and for that reason the UNDP applied very stringent selection criteria on the qualification of contractors. Harajli said, “It is the first time doing a green roof of this size on a public building in Lebanon. We can’t get it wrong.”

May 3, 2012 0 comments

Advertising Special Report

Ad-vice from the top

by Executive Editors April 14, 2012

written by Executive Editors

“The problem is this [‘Arab Spring’] came in the wake of the remnants of financial struggle. The environment is not conducive to a high level of investments. Clients are maintaining their strategies rather than implementing aggressive ones.”

“At times like the ones we are in today, tactical or immediate-result advertising becomes the main requirement. The pressure is definitely on creatives today to deliver immediate or short-term results. I can see that 2012 will be similar to 2011 and 2013 will also be similar in the way that everybody is looking for immediate results. The big ideas and big deliveries will not disappear but they will be less and less.”

Joseph Ghossoub, chairman and chief executive officer, Menacom Group

“We have come a long way in developing planning and doing campaigns that no longer address a single media but are integrated. Our creative people are now thinking in a broad spectrum way of thinking, rather than in the silos of the media disciplines.”

Ramzi Raad, group chairman and chief executive officer, TBWA Raad

“The agencies are being put under pressure and our margins are suffering because of the pressure, but at the end of the day you have to stand for something and if you stand for quality and a certain standard, you have to find a way or quit this business.”

Raja Trad, chief executive officer, Leo Burnett Group MENA

“Mobile, specifically in our markets, will take up more and more share of the digital spending. The opportunity to connect with people on a 24/7 platform will generate exponential growth, especially [since] we’re starting from such a low base.”

Tarek Miknas, chief executive officer, Promoseven Group

“With the apps model we finally have a way where people can pay one dollar for something. With a paid website you obviously want people to pay but more importantly you want some people to think it is so valuable that they are willing to pay for it.”

Jimmy Wales, Internet entrepreneur, founder, Wikipedia

“I would say 2011 was the year when companies significantly improved their online investments. Better infrastructure means more users in the GCC. North Africa and the Levant also show significant improvements in [online] usage, so ads [will] follow.”

Ari Kesisoglu, Google regional director for MENA

Hussein Friejeh, commercial director, Yahoo Middle East:“The industry is dominated by 30 clients. Out of those 30, you have 10 who spend up to 10 percent of their ad budgets online. Once other clients get onboard, market will jump.”

Ajay Shrikhande, chief executive officer, DDB Gulf:“Perhaps one can compare the advertising industry awards with the air cargo industry awards, and how is the public excited with the air cargo industry awards?”

“We still have high hopes for Syria. It is a big market, a manufacturing market, and we believe that a lot of Syrian manufacturers and services providers will eventually grow into the region, including Iraq and Lebanon.”

Mark Daou, chief operating officer overseas, Rizkgroup Communications

April 14, 2012 0 comments

Feature

Syria rendez-vous with the rebellion

by Executive Editors April 14, 2012

written by Executive Editors

The deep, single boom announces a symphony of staccato gunfire, and the calm spring morning in Syria’s eastern mountains descends into chaos.

Two rag-tag groups of Syrian Army defectors, part of a loose umbrella group commonly known as the Free Syrian Army (FSA) have just detonated a gas canister full of explosives beneath a Syrian army tank which was patrolling outside their village. Having left their hilltop hideouts late the night before, the 11 rebel soldiers are now executing their hastily planned attack. Their payload delivered, the rebels fight their way home beneath airburst anti-personnel artillery and withering fire from the Syrian Army; of the three wounded that day one would later die.

Holed up in a small farm building on a cliff-top near the village of Janoudiyeh, this small group of defectors operating autonomously but in loose collaboration with similar groups in the area, is one of many such units striving to write the next page in the Syrian uprising. Saying they have learned from the mistakes of Homs, where the FSA was forced to make a “tactical withdrawal” after a month-long artillery bombardment, these fighters have taken to the hills, preferring quick surprise attacks over a protracted urban struggle.

But while they may maintain the element of surprise, supplies are scarce. This group relies on FSA comrades in a nearby village to keep them stocked up with food, but on a bad day lunch is foraged from the ground outside: cabbages, greens and spring onions.

A string of government assaults have recently driven the FSA from many of its strongholds, but the group’s fortunes may be on the rise. On Saturday, March 24, FSA chief Colonel Riad al-Asaad joined forces with a unit led by the most senior army deserter, General Mustafa al-Sheikh, to form a united military council.

The FSA needs to move beyond its fractious nature if it is to prove a substantive oppositional force. Foreign states with an interest in seeing the FSA succeed would then find it far easier to supply the weapons and support it with what it desperately needs.

“Given the weapons we have and what they have, we can’t do anything. Of course we don’t want outside interference but if things keep going the way they are then of course I hope that NATO would interfere,” said Lieutenant Mohammed el-Hajj. “Any kind of alliance…let Israel come into the country and it would be better than Bashar al-Assad… At least if they are bombing our children we would know it is not our brothers, cousins, our [own] army bombing us.”

April 14, 2012 0 comments

Consumer Society

For your information

by Executive Editors April 6, 2012

written by Executive Editors

Hello again, Mr. Moto

After 2011’s less robust showing in terms of new car sales — a major economic indicator of consumer confidence — automobiles are again flying off the lots. According to figures from the Association of Automobile Importers in Lebanon, which are compiled from car registration statistics, the sector has seen a 17.7 percent rise in the first two months of 2012, with 3,796 cars sold in the first two months of 2011 and 4,469 new passenger cars sold in the first two months of 2012. Again, Korean brand Kia was the big winner in these new statistics, selling 1,252 new cars, against 938 in the same period last year. Korean models also took second place, with Hyundai selling 702 cars versus 538 in 2011. Third, fourth and fifth in the rankings were Japan’s Nissan, Japan’s Toyota, and rounding out the pack was the US brand Chevrolet.

The power of women

Of the CEO Middle East’s 2012 list of the 100 most powerful Arab women, 12 were Lebanese. The majority of Lebanese entries came from the entertainment sector, with Fairuz, Elissa, Nancy Ajram and Haifa Wehbe all making an appearance, at rankings 13, 41, 65 and 69 respectively. This trend to celebrate women’s roles in the ‘culture and society’ category was apparent across the list, with 43 out of the 100 overall listed being from this background. Other notable Lebanese entries include filmmaker and face of Johnnie Walker’s ‘Keep On Walking’ campaign in Lebanon 2012, Nadine Labaki (14), CEO of Treats Holding (Dunkin Donuts, Semsom) Christine Sfeir (15), and journalist and political analyst Maria Maalouf. The most powerful Arab woman was listed as the United Arab Emirates’ Minister of Foreign Trade, Sheikha Lubna al-Qasimi, for the second year in a row, ahead of Yemeni Nobel peace prize winner Tawakkul Karman in second place.

Organic food takes off

The well-established global trend toward organic foods will soon be reaching new heights, as Abu Dhabi-based carrier Etihad airways announces the introduction of organic produce to its in-flight menu, in exclusive partnership with Abu Dhabi Organics Farms. First class diners will find fresh organic food products on their plates, from eggs to vegetables to honey. Organic products are produced by sustainable farming practices and internationally certified, making them popular with discerning eaters. Etihad has plans to extend the provision of organic ingredients across all cabin classes in the future. The initiative comes after Etihad launched an on-board five-star restaurant service for First class last October, recruiting international chefs.

Superhero Con

The Middle East region’s first consumer convention devoted exclusively to pop culture, comic books and cult entertainment is being held this month, from April 20 to 21 in Dubai. Tickets for the Middle East Film and Comic Con (MEFCC) range from AED 55 ($14) for a day pass to AED 500 ($136) for a VIP festival pass. The festival will feature blockbuster movie previews, gaming and competitions, workshops, panels and Q&As. To promote local talent, artists from all over the region are invited to set up stalls in ‘Artist Alley’ to promote or sell their collections. Areas covered by the MEFCC include science fiction, fantasy, manga, anime, animation, illustration and collectables.

The call of the camel

Demand is growing worldwide for camel milk products, according to Emirati chocolatiers Al Nassma. They launched their camel milk chocolate in August 2011, and it has just been announced that Al Ain Dairy, one of the biggest producers of dairy products in the UAE, will shortly be introducing camel milk ice cream flavored with dates, caramel, saffron and chocolate. The company plans to renovate its facilities at a cost of AED 10 million (nearly $2.7 million) in order to produce the range commercially, according to CEO Abdullah Saif al-Darmaki in UAE daily Gulf News. Camel milk is an essential part of the traditional Arab diet. Research has shown that the milk offers plenty of health benefits as well.Al Nasmaa chocolatiers — which also sells drinks like Camelcinos and Camelattes at its coffee shop in Mall of Emirates — is available in 60 outlets in Switzerland, as well as in Japan, Europe and the Gulf, where the product has proved extremely successful. Global expansion, however, is currently stalled by the EU, which is unlikely to give permission for the export of fresh camel milk until 2013.

April 6, 2012 0 comments

Real estate

For your information

by Executive Editors April 6, 2012

written by Executive Editors

Hyperactivity around the Hippodrome

Solidere, the largest real estate developer in the country, and Minister of Culture Gaby Layoun are getting an earful of objection regarding a decision to dismantle ancient ruins once part of the Roman Hippodrome — to build a luxury residential development on a construction site in downtown Beirut. Layoun dismissed the decisions of three of his predecessors when he gave permission on March 15 for the destruction of the ancient ruins on the site to make way for development. For his part, he said the process would be respectful to archeological interests since it would involve dismantling and then recombining certain walls of the hippodrome to integrate them into the new structure. In response, the Association for the Protection of Lebanese Heritage called for a rally on March 24 near the site to voice their opposition to the destruction of the ancient ruins. The group’s Facebook page says the protest is “to protect the Phoenician port of Beirut, on plot 1398… and work for the reversal of the Ministry of Culture’s decision to allow the ‘integration’ of the Beirut Roman Hippodrome in Wadi Abou Jmil, into a development project, especially because the Hippodrome is on the list of culturally relevant monuments in Beirut.” Other politicians are taking a stance as well. A March 20 statement from the media office of Progressive Socialist Party leader Walid Joumblatt clarified his earlier published statements about the ordeal in Al Anbaa newspaper, placing full blame on Solidere rather than the Beirut Municipality, which is tasked with preserving archeological sites in collaboration with the General Directorate of Antiquities. Former Culture Minister Tammam Salam urged Parliament on March 15 to reject the decision, calling it an “unacceptable crime” against the Lebanese, according to The Daily Star.

Fashionable arrival

While there are currently two “So by Sofitel” boutique hotels globally, the French hotel group, Sofitel, plans to expand that brand to 18 properties worldwide in the next five years, Sofitel CEO Robert Gaymer-Jones told Hotelier Middle East in a March 14 article. “Eventually we’ll have somewhere between 15 and 18 Sos operating around the world in the next five to seven years,” he said. “I’d love to bring it to Dubai, Cairo and other parts of the Middle East. We’re looking at an opportunity in Beirut.” The two existing properties are the original in Mauritius and a property in Bangkok, which featured the design collaboration of Kenzo Takada and Christian Lacroix, respectively. The Lifestyle-hotels heavily depend on a fashion-centered brand identity, where employee uniforms, bath robes and even toiletries like soap are designer products. Sofitel opened 9 more hotels in 2011 and its Bahrain property, Sofitel Bahrain Zallaq Thalassa Sea & Spa, contains the first thalassotherapy (therapy that uses seawater) in the Middle East. After three years of construction work, the company’s Egyptian property, the Sofitel Legend Old Cataract Aswan, reopened its doors in 2011.

Luxury incentives

Adding to the bevy of luxury hotels in downtown Beirut, a new five star hotel has been announced by the Investment Development Authority of Lebanon (IDAL), which gave the project owner, Sabah Barakat, a handy incentive package on March 16, according to Byblos Bank. Barakat, the general manager of Al Bashoura Company, will build a hotel that will hold 153 rooms, 62 suites and 35 apartments, costing $208 million to include retail area, a pool, and a conference room. Since the project will reportedly create 250 jobs and contribute to tourism, the 10-year incentive package will allow the owners to skip paying income tax for a decade while reducing construction fees by half. IDAL expects that close to $1 billion worth of projects will receive similar incentives in 2012.

Shop ‘til you drop

While the external work is already complete on what will be Lebanon’s largest shopping mall, Beirut City Center in Hazmieh, its Dubai-based developer, Majid Al Futtaim, announced that the $300 million development would be complete by early 2013. Originally, the mall, which will contain 200 stores within 60,000 square meters of retail space, was to be completed by this summer. MAF has developed 10 malls in the Arab region, including the United Arab Emirates, Egypt, Oman and Bahrain, and has two more under development in Fujairah, UAE and Cairo, in addition to its first mall development in Lebanon. In the fourth quarter 2011 report by Ramco Real Estate Advisors on the Lebanese real estate sector, it noted that Lebanon has a total of 240,000 square meters of gross leasable area (GLA) within six existing shopping malls and five shopping galleries, but that there is need for more malls outside the capital. There are four malls under construction, which will add another 130,000 square meters of GLA. These are Le Mall Dbayeh, the Landmark in downtown, Beirut City Center and the expansion of Beirut Souks on the North Side.

Investor–friendly rooms

While Saudi Arabia’s Mecca and Medina came in first and second place in a poll of hospitality performance among Arab cities, Beirut came in 16th place. A February 29 report in Arabian Business, based on data from Ernst & Young, showcased the best Arab cities for hotel investment, ranking them by hospitality performance based on occupancy and room rates from the year 2011. Beirut had an average hotel occupancy rate of 57 percent and an average room rate of $220, while the average room yield (the average revenue per room per night) was $126. The report indicated that less Arab visitors came to Lebanon because of political upheavals in the surrounding area. Mecca had an average occupancy rate of 73 percent in 2011, partly due to an increase in religious tourism.

Dubai, which saw an increase in tourists (and 78 percent occupancy rate) in 2011, came in 3rd, while Abu Dhabi ranked 9th place. By January, however, Lebanon’s local hospitality industry had picked up. Hotel occupancy rose by 16 percent compared to January 2011, reaching 60 percent, and the average room rate increased 4 percent to $229 by the first month of this year, compared to January 2011, according to Ernst & Young. The room yield, which shot up 40.4 percent in comparison to January 2011, was the second highest rise in the region after Medina, where it was 114 percent.

Sales slow but values rise

According to figures from the General Directorate of Real Estate and Cadaster, the number of property transactions fell 1.2 percent in January compared to January last year, hitting 5,387 total transactions. It is important to note that this represents a fall of 44.9 percent compared to December 2011 figures. Ninety-seven of the sales in January 2012 were to foreigners, showing a 12.8 percent rise in sales to foreigners compared to January 2011. The value of property sales, however, was up 17.4 percent in January 2012 compared to January 2011, reaching $562.1 million. Newly issued construction permits covered an area of 793,988 square meters in January 2012, up 5.81 percent compared to January 2011, while 61.63 percent of the area which received a construction permit is in Mount Lebanon, according to the Order of Engineers.

April 6, 2012 0 comments

Banking & Finance

Financial quotes of the month

by Executive Editors April 6, 2012

written by Executive Editors

“The idea that ‘drill, baby, drill’ can cure our jobs deficit is basically a joke.”

Paul Krugman, American economist, regarding former US vice presidential candidate Sarah Palin’s statement

“We call on banks to continue stimulating growth in their deposits, even at the expense of slowing growth in profits.”

“The Turkish lira now has a symbol, just like the US dollar, the euro and the yen.”

Recep Tayyip Erdogan, Turkish Prime Minister

“They [the Bahrainis] will pay if there is no race. The money is in the bank already. So we’re not going because we’re going to get paid. That has nothing to do with it.”

Bernie Ecclestone, the Formula One tycoon, defending his decision to go ahead with the Grand Prix in Bahrain in April

“We used to be the people of the Book. Now we became the people of the Facebook. Much better.”

Shimon Peres, Israeli President who recently opened a Facebook page

“The risks of turning away from Greece now are incalculable. No one can assess what consequences would arise for the German economy, on Italy, Spain, the Eurozone as a whole and finally for the whole world.”

“I hope US companies would come. Even the US oil companies haven’t started coming back.”

Abdurrahim al-Keib, Libyan Prime Minister

“Britain seeks to protect Lebanon’s lucrative banking sector from sanctions against Syria, and we will do our utmost to safeguard its credibility.”

Tom Fletcher, British ambassador to Lebanon

“Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets’.”

Greg Smith, ex-Goldman Sachs banker, in his resignation letter published in The New York Times

“We do realize that a 25 percent increase on the third salary bracket would not be realistic, but this is our legal right.”

Assad Khoury, head of Lebanon’s Association of Bank Employees

“We received a letter from Exxon on March 5 saying they are freezing the contract with the Kurds.”

Abdul Kareem Luaibi, Iraq’s oil minister after US oil company Exxon infuriated Baghdad by signing a contract with Kurdistan

April 6, 2012 0 comments