Interview with Dr Fady Gemayel, Chairman of Gemayel Frères, President of Association of Lebanese Industrialists
Do you feel the effect of the current situation in the country and in the region on your operations and to what extent?
Lebanon is very much affected by what is happening around us. Statistics show that 56% of our economy depends on exchanges with other countries. With what is happening around us, many sectors are definitely affected. Nevertheless we have a very resilient private sector which has proven year after year that it can confront the situation with great commitment. It has not been easy, we have been facing several crises, such as our road closures to the Arab world, namely with Syria and Jordan. We have had several problems. Nevertheless, our exports are still holding on; they have gone down in 2014 by 7% which is a lot but compared to what is happening it shows the resilience and the flexibility with which our Lebanese firms are catering to their markets. They are always trying to remain where they should be despite all of the difficulties.
For Gemayel it is the same, we are part of the industrial community. We are a company that is now 86 years young and we are trying as much as possible to continue despite the fact that we are in a difficult country. We are still trying to export from here and to interact with all of our customers. A couple of years ago we acquired a company in France, not the Gemayel Frères but family members so we now have a presence in Europe which in a way consolidates our presence and can give us more sustainability in our drive because we are in a difficult region as I said before.
What is the main role of the company that you acquired?
It is a paper making company. We produce paper and we sell in France. We export a bit out of France as well.
We want to be a genuine one stop packaging supplier, supplying our customers with all of their needs.
Apart from this acquisition, what have been the major developments since our last interview?
We are continuing our drive in the innovative projects that we are introducing. Our sister company Solicar has gone on a very aggressive program of renewal. Major investment has been made so that we can also cater to additional and more sophisticated products that are in line with our business strategy which is focused on the dedicated added value products. To cover our customer requirements we are a one stop packaging company in Lebanon. We want to be a genuine one stop packaging supplier, supplying our customers with all of their needs. We are proud that we are equipped to do that and we are not hesitating to continue in doing what it takes to do it. Maybe since our last interview, I can tell you that we had a major fire at Gemayel Frères. It was a very unfortunate fire, an important one but fortunately we were operational again within a week. Our team did all that was possible to continue. This shows our commitment to our community here and to our presence. We are a company that believes in this country and we want to continue against all the odds. This is the case of most of our industrialists actually. The private drive is keeping this company alive.
Can you tell us about the products?
In our paper operations the company is Solicar, we produce a very nice white top paper which is used for packaging material and it is sold to prime international companies. It is a sophisticated product so to speak. It is the upper end of the product mix that you can do in the paper industry. Here we are proud that we have a heritage in the industry. Gemayel Frères introduced recycling to Lebanon in 1929 and we are also privileged to have a dedicated team who have the proper competences. Some years ago we sponsored students at the Lebanese University with the Grenoble Paper School which is a very well-known university worldwide. We sponsored a program for a master’s degree in paper technology. Seven people graduated from that program and our group has the privilege of collaborating with three of them. There is specific know how in the country that allows us to be producing innovative and excellent products. We put our heart into selling our products in the best possible way to ensure the best service to our customers.
What are the major challenges you face?
The major problems that we are facing in the country as a whole are enough to deal with! Of course as far as the paper industry goes, we are very much dependant on energy costs and this is not easy for us. This is why we tried to circumvent that issue by focusing on specific products allowing us to be present even though charges are very high. For sure we are hoping that in the future with regards to the resources that we are promised to be present here, we are hoping that this will be a game changer. The cost of energy is really hitting the energy intensive sectors. This has forced Lebanese firms to focus on value added products so that they can go ahead and continue despite this problem. We are all hoping that with gas being available and with the oil resources being available this will be a game changer and we will be a good place to be producing these products. Furthermore, we have also had problems reaching our export markets by the traditional way of land shipping. More and more of our products are now going to the world via the sea. You know that we have a very strong container shipping line, it is the third most important worldwide and it is Lebanese. It is a strong asset to Lebanese exporters. I am proud as President of the Lebanese Industrialists that our products are genuinely and aggressively reaching the most demanding countries. If you look at the statistics, you will see that our products, even in the very regulated industries such as food, are seeing increased exports to the USA, Canada and Europe. Furthermore there is a successful presence of Lebanese industrialists operating all over the world. I cannot avoid mentioning the Lebanese industrialists as a genuine partner for all international groups in a region where stability is not available. Many of us industrialists have become experts in managing crises, so we are really genuinely strong partners for international groups who want to be present in the region. This is what we are trying to do as an Association of Lebanese Industrialists. On several occasions I have tried to put forward the fact that Lebanese industry is not only about good products and not only in the food industry, we are very aggressive in switchboards, electronics, automation, medicine, and several other demanding sectors, but also that all of these successes have been done by people who have continued to work despite the fact that they receive no aid or assistance to continue. It is the private sector’s initiative that allows these achievements to be made. Of course we do get a lot of moral support from the officials and the Ministry of Industry and the BDL is subsidising interest rates in part for investments but other than that it is all dependent on the resilience and determination of the Lebanese industrialists.
What is your strategy for Gemayel Frères? Where would you like to see the company in a year or two?
I am advancing the fact that all of our Lebanese companies and those particularly that have gone through all of the head aches and problems, making sacrifices, are well placed to be serious, credible partners and play a strong role regionally. This is what I would like to be done for all of the industrialists.
Of course I see that our company should also do that. I hope that Lebanon will become a place where international groups want to be present. Lebanon is a small country but it is open to the world and the Lebanese diaspora is very much present in Africa, in the Middle East, in the Gulf and even in the US and Europe. Lebanon as a hub is not only Lebanon as 10,000km2. We have an extension and a network that is very much useful for these international companies. Lebanese industrialists are excellent partners for groups who want to be in this part of the world where stability is lacking and the Lebanese counterpart has become experts in managing a crisis.
Concerning our group, we have always shown a lot of commitment to what we are doing. We are trying as much as possible to continue and to prosper despite the situation here. We are very much present here as a one stop packaging place. We are providing our customers with all of their requirements concerning packaging. We have a full line of products. We are also hoping to increase our exports of our specific and focused products which we want to have present in the international markets.
Which markets in particular?
We are interested in exporting more and more to the European markets.
What about the exports to this region?
We are exporting wherever exports are possible. We have done our internal homework so that our products are of excellent quality to be exported to Europe. We have been ISO certified since 1998 and our drive for exports is for the quality markets, for the high end products. We are dealing here and supplying international groups with their needs in terms of promotional items and in terms of packaging all throughout the MENA region. Some of them deal with us through their European headquarters and we have the platform to be able to handle all of these requests and to supply on time every day despite all the odds.