Revenues were up by around 30% at last month’s 14^th Schtroumpf Beer Festival, according to the restaurant chain’s operations manager, Maroun Daou. But anyone heading to the festival in the hopes of sampling a wide array of beers would have been disappointed. This year, only Almaza, the sponsor, was present at the event, making it rather bizarrely a one-beer, beer festival. At least Almaza was happy. Sales at the event rose by 50% compared to last year, thanks also in part to a LL12,000 drink-all-you-can offer, according to Almaza Brand Manager Naji Nacouzi.

“The beer festival should invite all the other players in the market,” said Nacouzi. “However for two years now Almaza has been sponsoring the festival without the presence of other players. Maybe they don’t like the prominence and visibility of our brand.”

The absence of other beers might be a reflected of the local dominance of Almaza, which was bought by Heineken in 2003. “We used to have a lot of brands. A few years ago we had about eight beers, but now they believe there is no competition anymore. They see only Heineken and Almaza. So they are no longer spending money on such festivals,” said Daou.

Abdou Younes, marketing director of Abi Ramigh Bros., the company that imports Effes, Fosters and Budweiser, said the company ceased participating in the festival two years ago with Budweiser because Schtroumpf only embraced the brand during the festival and shunned it for the rest of the year.

“They don’t contact us until the festival. But outside the festival, they don’t want to put our brand or any other brands on their premises. They only contact us when they need something.,” Younes complained.

In an attempt to chip away at the Almaza/Heineken market share Abi Ramigh Bros. Spends around $375,000 on marketing and while it did not take part in the beer festival, it does sponsor motor sport events.

Taking place in early September instead of late spring, the Project Lebanon construction fair run with considerable delay this year, marking the event a victim of the turbulences that rocked the Lebanese exhibition and fairs industry in the aftermath of the assassination of Lebanon’s former prime minister Rafik Hariri.

In its 11^th year, the show appeared slightly smaller than in some previous editions and presence of exhibitors from some countries was down, but other countries were well represented and entries for some 250 exhibitors filled the show catalogue of organizers IFP in a respectable mix, confirming Project Lebanon as stable fixture on the country’s exhibition scene.

Looking out over Beirut from the exhibition grounds, visitors could take heart in seeing construction cranes dotting the downtown silhouette in quite some larger numbers than a few years ago, supporting the notion that the Lebanese real estate market has been more resilient in withstanding the troubles of 2005 than other sectors of the economy.

That did not mean, however, that moods inside the exhibition halls would vibrate. Attendees were treated to some information important to the sector, such as a seminar by insurers Arope on new insurance requirements for construction projects and international examples for such decennial insurance. But a sizeable number of exhibitors on the main floor of Project Lebanon admitted that 2005 had turned out different than hoped for.

Even stalwarts in the domestic construction supplies industry such as paint manufacturers Tinol and tile makers Uniceramic conceded that the market has not been kind until now. “We had a difficult first portion of 1005. The market is going up now but I am not sure if we will be able to make up for losses from the first half in the remainder of the year,” said Chaker Saab, Tinol’s business development manager. Uniceramic on their part had been hurt by the trade problems with Syria, which is the company’s main export market, said general manager, Nabil Ghorra.

Both managers saw better times ahead, albeit under slightly different accents. “I am optimistic for the future,” said Saab. “The boom will come, but I am not sure how long we can wait,” said Ghorra.

The main event in telecommunications last month was the one that did not take place: the switch from the 03 cellular prefix to the new code, 71. Less than two weeks before the changeover on September 18, the ministry of telecommunications told the nation’s phone users that the old numbers would remain valid for the time being.

The reason given by the MoT for reversing its decision to change cellular prefixes now was a sensible assessment that further adjustments in the national phone numbering plan would mandate another switch in landline prefixes, most likely next year. A two-phased switch would have caused extra costs to businesses and individuals, by forcing them to print new business cards, stationery, brochures, and so forth not once but twice.

While the decision gave consumers and companies a reprieve in having to visit the printers and commission their communications agencies for producing new corporate materials, it came a bit late for the communications planning of the parties directly involved, MoT/Ogero and network operators MTC Touch and Alfa. According to industry insiders, they had made bookings for extensive billboard campaigns that could not be cancelled.

Thus, the Lebanese public in mid September was treated to extensive telecommunications advertising of apparently somewhat unplanned nature and cost that media industry sources estimated at some $50 per day and billboard, or about $75,000 a day. The advertising budget for the originally planned campaign to introduce the new cellular prefixes had been signed for to equal parts by the ministry and operators.

Given that expenses for such a measure can run to substantial amounts, local companies weary of having to renew their corporate materials should be able to breathe easier for the moment. While the general manager of a major PR agency in Beirut said one could not provide a general cost figure for changing all of a client’s corporate materials to the new phone numbers, he estimated that just for his own firm of 25 employees, changing everything involved could cost as much as $10,000.

It has been known for years that Lebanon’s six-digit phone numbering is no longer sufficient and as network managers at Ogero confirmed, the system-wide change of the prefixes will have to take place eventually. Compared to the inestimable total cost that the nation’s phone users would have been forced to bear due to the September switch, the sudden cancellation of the public awareness campaign last month was certainly a minor problem. What remains is the question why the decision for a two-phased changeover had been taken in the first place.

Marketing US-based higher education to Lebanese students became an executive matter for ambassador Jeffrey Feltman when a tandem of private sector college road shows converged on Beirut last month. Held consecutively at the Moevenpick and the InterContinental Phoenicia Hotels, the two road shows represented 37 US colleges between them, all vying to draw Middle Eastern students to their campuses.

As he praised the virtues of US colleges and the quality of degrees they offer at an opening press conference, Feltman also intimated that American ambassadors worldwide have received a “directive from the State Department to assist in promoting US education to international students”.

While US diplomacy banks on the cultural good will that they expect visiting students to develop towards America despite not really resolved obstacles Middle Eastern youngsters face in obtaining US student visa, American colleges also have a substantial financial interest in attracting international students. “On average, 600,000 foreign students are enrolled every year in US, spending $13 billion annually. International education has become an industry in the United States,” said Tarek Elshayeb, associate director for international student services at Plattsburgh, a college affiliated with the State University of New York.

The colleges self-financed their participation in the road shows, said the managers of US Education Group and Linden Educational Services, the two competing companies which organized the events. Each school participating in her fair had paid $11,500 for going to five Middle Eastern cities, said Linden’s president, Linda Heaney.

Annual costs of undergraduate studies at universities in the Linden fair were predominantly in the medium $20,000 to $40,000 bracket, as the biggest names in the education business usually stage their own shows. “We do small programs for select universities that are very committed to international students,” Heaney said.

As for return on their investment, admission officers at the fair emphasized that they were looking at their promotion work as “sowing seeds” without strict recruitment targets for each stop on the trip, but some were avidly goal-oriented. “We want to increase enrollment and I want to find at least five students from Lebanon that would enroll. If we can register 25 students during this entire tour, I will be a happy camper,” said Ashraf Al Zawaideh, assistant director for international admissions at the University of Bridgeport.

Every summer, in Lebanon, beer sales increase by 30%, proof, if any were needed, that the Lebanese like to crack open a cold one at the beach. In fact, according to Almaza, we apparently like a very cold beer on the beach – served straight from a special Almaza “sub-zero cooler” at -2 degrees Centigrade and so, since the beginning of June, beach resorts across the country have been serving the famous green bottle from one of three hundred sub-zero coolers distributed gratis by the company. A genuine breakthrough in beverage enjoyment or just another weapon in the annual beer wars?

One thing is certain: as the mercury rises, beer sales competition heats up. Since the overall beer market is not growing much, despite an increasing variety of cheap, obscure, often high-alcohol-content brands, competition is especially fierce. According to Almaza Marketing Director Francois Mourad the market is growing by only 3.5% a year. A sizeable portion of that growth can be attributed to the non-alcoholic beer market, of which Almaza has a share greater than 70% according to Mourad.

Although Almaza controls around 70% of Lebanon’s beer market, it isn’t resting on its laurels, said Mourad, because it expects the Government to sooner rather than later cut the 40% duties on imported beer – possibly as part of the Euromed agreement with the EU – and open the floodgates to a wider range, and higher numbers, of imported beer.

Meanwhile other beer importers continue trying to hammer away at Almaza’s market dominance. Abiramia Bros., a company that imports Effes from Turkey, Fosters from Australia and Budweiser from the United States, says it is spending $350,000 on marketing this year, including a “massive ad campaign” which includes sponsorship of two motor races and advertising on billboards and radio. It is also increasing the sales percentage in cash money it gives to its five distribution agents as an incentive for them to boost sales.

The company’s marketing director, Abdou Younes, claimed that the company’s beer sales were growing by 25%-30% a year, which imply it is eating into Almaza’s market share. For its part, Heineken is trying to wean clubbers off ready-to-drink (RTD) beverages such as Bacardi Breezer by presenting Heineken in cooler bottles “You don’t see many people drinking beer in nightclubs,” noted Mourad. “You see them drinking RTDs. That’s why we are distributing Heineken in aluminium bottles designed by a Japanese designer.”

Beirut’s budding investment banking landscape is in process of new diversification as Byblos Investment Bank is embellishing its ranks while other banks are reported to be looking newly into this area of activity.

The movements in the community of specialized bankers are loosely related to changes triggered by last year’s merger and acquisition operation between Bank Audi Group and Banque Saradar. While the merging banks at the time had indicated that they would aim to avoid staff redundancies, banking analysts suggested that the investment banking operations of both sides would be likely to have some overlap, since three entities would have to be consolidated – Audi Investment Bank, Lebanon Invest, and Saradar Investment House (SIH).

The re-structuring of the Audi Saradar Group’s investment banking operations led to the formation of Audi Saradar Investment Bank under chairmanship of Lebanon Invest founder, Marwan Ghandour, and with Ramzi Saliba as general manager. Four bankers of the old SIH team, who had initially stayed on with the Audi Saradar Group, felt that they could find more room to deploy their talents if they would leave Audi Saradar and thus recently parted from the group on reportedly very amicable terms with a golden handshake and with plans, according to finance insiders, to set up their own investment funds.

The setting free of investment banking talent caught the attention of at least one bank interested in creating an investment banking subsidiary and was also welcome news at Bank Byblos Group which jumped at the opportunity to upsize the team of one-year old Byblos Invest Bank. Byblos convinced three of the migratory investment bankers to choose BIB and on July 1 appointed former SIH head Joe Issa-El-Khoury to the position of general manager at Byblos Invest Bank.

According to Bank Byblos Group’s vice chairman, Semaan Bassil, BIB is poised to develop investment banking activities out of Lebanon for Sudan, Algeria and Syria where the group is presently active, and for Abu Dhabi where a new operation of the group is to be established soon. “The group believes that the excess liquidity available in the Arab world will be seeking investment venues and we aim to play, through BIB, a leading role in channeling those funds into rewarding investments,” Bassil told Executive.

It was a busy month for Lebanon’s wine producers, six of whom – Chateaux Musar, Kefraya, Ksara, Clos St Thomas, Massaya and Cave Kouroum exhibited at the biannual Vin Expo in Bordeaux, arguably the world’s premier wine fair. Back in Lebanon, July 27 saw the committee of the Union Vinicole du Liban (UVL) elect a new committee, one that for the first time represents all producers. Elsewhere, the advent of new EU export regulations is expected fast track the establishment of the much-needed and long-awaited National Wine Institute. The implications for the sector are significant. “Export is the future,” said Charles Ghostine, Managing Director of Chateau Ksara. “If we want to achieve better prices, we need a regulatory framework to underpin confidence.”

At Vin Expo, Chateau Kefraya, which took the opportunity to show the greater wine world its new premium white Casta Diva also, according to marketing manager Emile Majdalani, made exciting in roads in penetrating the non-Lebanese on trade in France as well as stirring up interest among buyers from the Russian and Scandinavian markets. “These contacts were more concrete than during the past exhibitions and offered the possibility to finally initiate an extension of our distribution to the entire French market,” he said 

Massaya, which for the time being at least is not part of the UVL, exhibited with its French partners the Brunier brothers from Chateau Vieux-Telegraph and Californian maverick wine producer Boony Doon.

The three-nation alliance reportedly caused much interest, being as it was a departure from the usual generic national or regional stand. “We got all the interest,” said Massaya’s Ramzi Ghosn. “The others were all know producers.  and more importantly our quality was endorsed by being on the same stand as the French and Californians. The wine industry is very conservative and such alliances are not common.” 

Elsewhere, Cave Kouroum seems to have emerged from its legal battle with neighboring Chateau Kefraya and established itself as one of Lebanon’s most adventurous producers. At Vin Expo, the winery in the heart of the village of Kefraya, won seven awards including, two golds.

Following on the heels of an April conference which saw 127 applicants from around the world bidding to develop 100 of Syria’s top tourist sites, Sadallah Agha al-Qala, Syria’s Minister of Tourism, gleefully opened the “Syrian Tourist Horizons Forum” July 5 in Damascus.
Naturally enough, the two-day event was meant to highlight some of the country’s recent (and anticipated) achievements in the sector: 9,000 new hotel beds will be added each year by 2010 at which point tourist revenues are expected to reach $6 billion annually ($2.2 billion was earned in 2004 al-Qala told the conference). And despite what the minister referred to somewhat euphemistically as “bad publicity,” the first five months of 2005 saw a 55% jump in package tours of Western tourists coming from mainland Europe – a stat that was used to justify the prediction that 3.6 million tourists will have visited Syria by year’s end, or 600,000 more that 2004.
One of the main speaker’s at the conference, however, Intercontinental Hotels Group CEO Chris Moloney, signaled at least one problem the sector faces mostly unrelated to politics or economics – an aspect that may ultimately harm the sector’s long-term prospects for growth far more than any immediate questions about the current regime’s stability or lack of stability.
“I urge you to carefully consider the unique experiences which Syria can offer compared to other destinations….. Pay attention to that aspect because it is extremely valuable and fragile,” said Moloney.
Of course, hewing to such advice may not be that easy: Outside the conference hall large, glossy displays for future developments in Palmyra, Tartus and Latakia looked more like the sorts of hotel and recreational developments found in Dubai or Las Vegas. Already, in fact, 19 of the April projects that were approved have broken ground, with some promising to bring the first real taste of the five star life to points across the country.
According to Nashaat Sanadiki, Chairman of the recently formed Federation of Syrian Chambers of Commerce, the danger of “overscale development” – development which overwhelms the natural beauty and charm of an area rather than adding to it – is both real and, he hopes, manageable.
“My view is that I would like to see Syria takes it’s share in tourism, but without harming our texture and social life,” he said. “We can do that without resembling Dubai… [but] that means we cannot sacrifice our desert area, for example, to convert it all in to 5 stars resorts.
“Where will the average Syrian go after all?”

Seemingly unfazed by the bombings, assassinations and political turmoil which are threatening to wreck Lebanon’s summer tourism season, Lebanese  entrepreneur Merhi Abou Merhi chose June to launch Orient Queen, the world’s only cruise on a Lebanese-owned ship.

The ship-owning company Abou Merhi Lines SAL, which owns 17, primarily car-carrying vessels, purchased the roughly 16,000 tonne, 900-passenger “Bolero” cruise ship from Greek-owned Festival Cruises for $9.5 million, according to an annual report on the Website of the Paris-based shipbrokers Barry Rogliano Salles.

The Lebanese company has invested, “more than 10 million dollars” refurbishing the vessel, according to Abou Merhi Lines media manager Karim Gemayel. It was then renamed Orient Queen.

For just over a month now, Abou Merhi Lines has been offering a seven-day cruise aboard the five-star vessel around the Mediterranean – Egypt, Cyprus, Greece and Turkey – at a starting price of $1,050. The price climbs as high as $7,000 for passengers who go for the royal suite, five meals a day, private butler and the constant companionship of “two ladies,” Gemayel said.

As soon as Lebanon’s summer tourist season is over, the Orient Queen will begin offering cruises out of Dubai, before returning again to Beirut again the following summer.

Gemayel said that the weekly cruise had attracted “hundreds” of passengers in its first month, a figure he acknowledged was not particularly high for a ship which can accommodate around 900 people per cruise.

“Promoting the cruise has been difficult,” he admitted. Asked if launching the cruise in the midst of political turbulence and a months-long spate of violence might have been unwise, he said: “The people who conducted the feasibility and profitability studies all suggested we rent the boat out to any European country. We had some very good offers. But we are not in this for pecuniary gain. Our slogan is ‘For Lebanon.’ We are trying to rebuild tourism in Lebanon.”

Salvation, though, may lie in Dubai. “There is a lot of demand in Dubai,” said Elie Nakhal, head of Nakhal Travel, which is selling Orient Queen cruises.  “Dubai will compensate for any losses in Lebanon.” 

Around 60% of the passengers thus far have been Arabs – roughly half of them Lebanese, 30% have been Turks and around 6%-7% Europeans, mostly from Greece and Cyprus, Gemayel said. 

The international cosmetics group, L’Oreal, last month made a strong recruitment pitch and presentation of its Human Resources strategies at the Ecole Superieure des Affaires on occasion of signing a partnership agreement. Aims of the agreement include to enhance networking between ESA and leading companies and to develop the relationship between the business school and L’Oreal Lebanon. 

Under the agreement, which formalizes long-standing collaboration between the two entities, ESA students will study L’Oreal marketing cases and have better opportunities to benefit from recruitment at L’Oreal, said ESA communications director Georges Najm.

For L’Oreal, international recruitment and working with leading business schools is a priority, Jean-Claude Le Grand, the director of corporate strategic recruitment at L’Oreal, told Executive. “We manage the career of the executive personality differently. We promote angry, dynamic young people,” he said. “Other companies don’t dispatch Human Resources staff to recruit on the ground at universities and only a few companies have a strategy to recruit worldwide.”

According to Le Grand, L’Oreal has collaboration agreements with numerous important business schools and spends over 1 million euro annually as direct investment into recruiting, not counting salaries in the HR department. The company, which says it takes five to ten years to build up a L’Oreal manager, seeks to recruit 70% of its managerial staff from career starters. Besides engaging in partnerships with business schools, L’Oreal employs campus business games and internships in its efforts to attract the most talented students to its ranks. “We are not chatting about to war of talent, we are acting,” Le Grand said.