Disclaimer: This article and its content do not disregard the fact that women are not the only victims of sexual harassment. Any person, male, female, transgender or other, can be subjected to harassment and has the right to be protected, irrespective of that person’s gender, sexual orientation, socio-economic status, religion, beliefs, nationality, political views or occupation. However, this article tackles the issue of sexual harassment directed at women, with an emphasis on sexual harassment in the workplace.

“The harasser slipped his hand under my skirt. I directly jumped and ran away,” said one woman describing her ordeal in a survey for this article.

The above is just one case among enumerable accounts from victims of sexual harassment in Lebanon, where statistics on assaults are not registered in legal records because as of yet, there are no measures taken against this form of abuse. According to Human Rights Watch, Lebanon has proven to be anything but progressive when it comes to protecting women’s most basic human rights, such as the right to be protected from sexual assault. Its definition might slightly vary from country to country, but sexual harassment is globally construed as any physical, verbal or nonverbal act of a sexual nature that violates a person’s integrity or privacy resulting in said person feeling bothered, threatened, disrespected or harmed. Sexual harassment is not exclusive to Lebanon, yet the Lebanese Penal Code does not punish it. This effectively makes sexual harassment a social norm that women in Lebanon simply have to deal with. “We are brought up and socialized in a way that constantly reminds us that men are more dominant than women,” explains American University of Beirut sociologist Karma Bibi. “Women have fewer rights and are seen as weaker, and this is socially reproduced all the time,” she adds. Two major factors contribute to the prevalence of sexual harassment in Lebanon: the lack of legal initiatives and the socialization of Lebanese citizens. Women are still not guaranteed protection from sexual harassment in public, which is all the more reason why the private sector in Lebanon should enforce values and regulations that would protect employees from this form of abuse, setting an example to the rest of society.

The United States State Department’s website has a specific section on sexual harassment policy that clearly defines sexual harassment and states the rights and responsibilities of employees in the workplace. In contrast, the Lebanese Ministry of Justice and Ministry of Labor websites do not state the criminalization of sexual harassment in public or in the workplace in any clear section or article. Under France’s Penal Code, proven cases of sexual harassment can be punishable by two years’ imprisonment and a fine of 30,000 euros ($34,000), a hefty penalty that can serve to deter harassers. Yet Lebanese officials do not seem to be concerned by this, nor do they seem to even be aware of the abuse taking place under their noses. The need for government action became particularly clear after news broke in early 2014 of the resignation of Nassif Qaloush, Governor of Beirut and the North, following the release of a YouTube video showing him attempting to sexually assault a female employee in exchange for a contract renewal.

Yet Ghassan Moukheiber, Member of Parliament for the Change and Reform Bloc, is looking to change this alarming status quo. In May 2014, after consulting with legal experts, Moukheiber drafted a law to criminalize sexual harassment. The proposed law dictates the appropriate measures to be taken by authorities in cases of sexual harassment and racial discrimination in Lebanon. It is comprised of clear sections on criminal provisions, victim protection, disciplinary measures, prevention and employee regulations. Moukheiber believes that: “Victims do not have a real basis to prosecute [harassers],” and in his proposition to Parliament, he explained that taking advantage of the absence of a law becomes worse when the victim experiences social or professional subordination. However, the bill has not yet been voted on in Parliament. Earlier in 2014, Parliament did pass a law criminalizing domestic violence that had been pending since 2010. A Lebanese judicial source told Executive that the government at the time wanted to tame public outcry over the stalled bill, and, in turn, approved it. However, the legislation sparked backlash from activists who decried the removal of a clause condemning marital rape after some politicians and religious figures had criticized it.

Legislation: toothless or absent

In Lebanon over the past five years, drug-related crimes have increased by 200 percent, the murder rate has doubled and cases of reported theft have risen 18 times; despite the extremely high incidence of sexual harassment, most officials feel they have their hands full. Although Colonel Johnny Haddad of the Internal Security Forces (ISF) claims that 99 percent of sexual harassment cases are “solved”, Moukheiber states that to this day, “no reliable data [on the subject] exists.” He believes that Lebanese authorities possess neither the proper legal tools to resolve sexual harassment nor the political will to fight it. According to Haddad, sexual harassment cases are prosecutable under articles of the Penal Code relating to indecent actions. However, such articles can be misleading; for example, Article 507, which imposes a penalty of imprisonment with hard labor for a minimum of four years for anyone who coerces another person to commit or endure an obscene act, can be interpreted in different ways and does not dictate the criminalization of sexual harassment specifically. However, Haddad insists that not one report of sexual assault goes uninvestigated: “The [harasser] will get arrested and will be transported to the prosecutor’s office who will press charges. He or she will later be charged and sentenced by a judge for the crime,” he says. Despite this claim that sexual harassment cases are always dealt with, one cannot deny that there are loopholes. ISF records reveal that only six cases of sexual harassment have been reported as of March 2016, most of which, Haddad says, are related to incest specifically and not sexual aggression against another person in general. A 2015 study by the World Bank shows that only one in five MENA countries have a law criminalizing sexual harassment in public and in the workplace.

The prevalence of sexual harassment in Lebanon is not only a direct consequence of the lack of political will to criminalize it, but also a result of certain long-established social norms that promote all forms of sexism. The pre-assigned gender roles for men and women in Lebanon play a part in shaping perceptions in society and in the professional world. AUB’s Bibi told Executive that the roles men and women are expected to play in our society are reinforced through education: “Don’t we always tell women to look good and presentable?” she asks. “Don’t we always tell men they’re allowed to look at pretty women but are not allowed to touch them?” She elaborates on the fact that the more our society puts barriers and limitations on one’s actions, the more one will be intrigued to explore what he or she isn’t allowed to do. “We are told to refrain, refrain, refrain,” Bibi declares. “[If] a man knows he cannot reach a certain woman, one way to release that frustration is by sexually harassing her.” 

Some NGOs are contributing to raising awareness on the issue of sexual harassment in the hopes of reforming societal norms. ABAAD, an NGO advocating for gender equality, launched a ‘Men’s Center’ where men who are prone to violence against women are able to seek treatment from psychotherapists. This is an example of an initiative that could potentially result in change. Some 500 beneficiaries have received treatment since the program’s 2011 launch. In addition, in February of this year, a website called HarassTracker was launched, where victims of sexual harassment and assault can report the details of the incident, such as the location of where it occurred, which in turn will be placed on a map. The members of the group who created the website, from both France and Lebanon, came up with the initiative in order to collect data for later campaigns that will fight for the right of women and other vulnerable social groups to be protected from harassment.

According to the World Bank, one in five MENA countries have a law criminalizing sexual harassment in public and in the workplace | AFP

Making the workplace a harassment-free zone

The presence of socially-reproduced gender stereotypes in Lebanon also adds an extra barrier for women who wish to find their place in society and climb the professional ladder free from sexual harassment. With the absence of legal initiatives and social pressure, few Lebanese companies in the private sector resort to taking matters into their own hands by implementing ethical guidelines they feel would protect their employees. The Lebanese offices of L’Oréal, a leading company in beauty and cosmetics, do have a code of conduct that presents a set of guidelines dictating how employees are expected to interact with each other and the community at large. L’Oreal’s Human Resources Director and Ethics Correspondent in Lebanon Tony Hayek speaks of the importance of ethical practices in the workplace: “To make sure employees understand our code of ethics, we hold a yearly interactive training round through which employees are exposed to different situations and are required to know the right thing to do in each case,” explains Hayek. In addition to L’Oreal’s attention to ethical issues, diversity and equal pay, the majority of the top managers at the company are female, creating a healthy work environment based on meritocracy.

According to the International Labour Organization (ILO), such initiatives are mostly developed in large companies that have global policies encouraging diversity and equality. However, L’Oreal’s policies are not the norm and many large local corporations do not have clear rules in place to reprimand employees who engage in sexual harassment. “We do not have a specific policy against sexual harassment in the workplace,” says Rania Jamal, the Head of Planning, Staffing & Employee Relations at Fransabank Group. Although the bank advises employees to report any breach of conduct, Jamal explains that most of the employees at Fransabank would hesitate to speak up in the fear of harming their reputation or jeopardizing their job. “Of course I know it could happen,” says Jamal when asked if she’s aware of the possibility of sexual harassment taking place at the bank. Jamal recalls her own experience with sexual harassment when she was employed at another well-known Lebanese company. The director who assaulted her has never been punished. She says, “I still hear stories about him flirting with women.” According to research conducted by the ILO on the recruitment processes in Lebanon, smaller companies are generally less progressive when it comes to the protection and advancement of women in the workplace. A survey conducted in 2015 shows that the majority of employers did not have a “well-developed gender sensitive human resources program.” Although some companies are institutionalizing measures to support women’s rights and careers, not enough data is available to make a determination on how effectively the private sector is currently adopting measures to protect its female employees from sexual harassment.

A 2013 survey by the Thomson Reuters Foundation, which examined 22 Arab countries for violence against women, women’s place in society and attitudes toward a woman’s role in the economy, revealed that Lebanon was ranked the 16th worst country for women because of discriminatory employment laws and the absence of laws criminalizing sexual harassment in the workplace. The idea of social, political and professional reform may seem far-fetched, but with Moukheiber’s draft law awaiting a vote in parliament and the rise of civil society groups championing the issue, the debate around sexual harassment is coming more to the fore in Lebanon. However, the big question regarding sexual harassment remains how to address the apathy on the issue permeating from Lebanese society’s most influential decision makers.

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No woman should have to take it. Sexual harassment is one of the many prevalent issues Lebanon has yet to solve. Not only is it not reprimanded by the Penal Code, but sexual harassment is the product of socially reproduced gender discrimination indoctrinated through education or lack thereof, so much so that it has become an inevitable reality of what a woman will go through in our country. While government officials are neglecting the need to eradicate sexual harassment, it is time we become our own leaders and put an end to it.

With MP Ghassan Moukheiber’s draft law criminalizing sexual harassment still pending in Parliament (see Prosecution of sexual harassment), Executive urges economic, religious and social influencers to push for the law’s enactment and to create a well-rounded campaign that highlights the inequitable repercussions sexual harassment has on a woman. The campaign will include clauses from each think tank upholding the need to favor the law by confirming the sociological and mental effects sexual harassment can impose on a woman, which inhibit the latter from climbing the social and professional ladder.

Parliament is not our only target; we must forward the campaign to stakeholders who represent mainstream economic entities in Lebanon and invite them to join the campaign. This will help enforce sexual harassment prohibition into the code of conduct of Lebanese companies and offices to protect employees subjected to sexual harassment and discrimination in the private sector. Devising a plan to assess companies on gender-sensitive codes of conduct will also help make the workplace a safer environment. Once the assessment list is finalized, it must be publicized to inform people which companies did not instill a nondiscriminatory code of conduct and boycott it if they wish. This approach would encourage companies who do not have an inclusive approach to implement it, or least do so out of fear of reputational damages.

In 2013, a photograph portraying a woman with a bag over her head being pulled back with a belt attached to her neck was released to celebrate the collaboration of luxury handbag designer Johnny Farah and photographer Joe Kesrouani. The photograph immediately sparked outcry and women’s rights activists called for a boycott of Farah’s products. Although the designer issued a statement explaining the reason behind the photo, he ultimately changed it due to consumer pressure. 

Of course, campaigning for better protection and safety of women goes beyond the law. We must not forget that real change can only come with proper awareness. First and foremost, it is crucial to introduce gender-sensitive education in schools where activities and exercises can challenge students’ reasoning and expose them to different situations regarding issues of gender. Teaching gender equality in schools provides a base for students’ understanding which they will then carry into their lives beyond the educational system. In addition, students should be taught about the prevalence of sexual harassment against women in society, different ways to prevent it and the cruciality of consent. Secondly, Executive urges educational institutions to partner with NGOs to arrange seminars to shed light on sexual harassment from local experts’ points of view armed with real-life experiences and developed knowledge on the subject. Third, the media should grant NGOs airtime by inviting them onto primetime shows or by teaming up with ad agencies to create fairly-priced awareness ads in order to maximize their visibility and influence. We know that social efforts should not be limited to organizations because change starts with each individual. Harassers should be punished  and exposed at every level; be it through public shaming, scolding or sharing experiences on social media platforms, the word on sexual harassment should always be out in order to familiarize people with its prevalence and allow it to become a common cause. One way we can raise awareness is by creating support programs through which anyone who is harassed can share their stories as well as give and receive advice. Earlier this year a website called HarassTracker was developed to help people identify where sexual harassment occurs and to collect the received data for upcoming campaigns fighting sexual harassment. Ultimately, however, the onus is on society to educate men not to harass women.

Change in social behavior cannot happen overnight, especially not in a society that puts women in secondary societal and economic positions and portrays them as the weaker sex. Equality is at the heart of national progression, and as long as we are dealing with prejudice, women will not find their deserved place in society. Sexual harassment in Lebanon must become a thing of the past.

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Lebanon has missed several opportunities to grow its nascent oil and gas industry at an ideal pace, but now regional developments threaten not just further delays, but also permanent losses unless the country acts to protect its national interests.

The new urgency stems primarily from two principal events. The first was last summer’s discovery of the giant Zohr gas field off Egypt’s northern coast by Italy’s ENI, a find estimated by some to have doubled the North African country’s natural gas reserves overnight. It also significantly increased the likelihood of commercially viable deposits in nearby offshore acreage belonging to Cyprus, Lebanon and Israel. This has sparked renewed interest in this section of the Eastern Mediterranean basin from major international oil companies.

The second event – in part at least a consequence of the first – was the Cypriot government’s approval in late February of a two-year extension for an ENI-led consortium to conduct exploration and production in Blocks 2, 3 and 9 of Cyprus’ exclusive economic zone (EEZ), the first and third of which are adjacent to Lebanon’s EEZ. Apart from general location, these blocks also share similar geology with Zohr and other Egyptian and Israeli fields, and undersea hydrocarbon deposits obviously pay no heed to political or other borders, so it’s possible that Cyprus’ Blocks 2 and 9 have reservoirs that extend into Lebanon’s maritime area.

This prospect should be good news for all Lebanese because it offers a chance to share in any revenues derived from any reservoir that may be discovered, even if this country’s energy sector has yet to undertake any production operations of its own. It would also offer an opportunity for Lebanese individuals, companies and government departments to gain experience by cooperating with Cyprus and ENI, helping to prepare our public and private sectors alike for the day when this country starts actively exploring for its own resources. 

Friends without benefits

All it takes to start reaping the early rewards of these happy circumstances is for the Lebanese government to exercise a modicum of self-preservation through a little initiative. The only things missing are a maritime border deal with Cyprus to define the line between the two countries’ EEZs and a Framework Unitization Agreement (FUA) that would establish terms for joint development and exploitation, including the formula(s) for any revenue sharing.

Herein lies the problem; Lebanon and Cyprus enjoy friendly relations, neither has staked out an extreme position in this process, talks on an FUA have made progress and a delineation map was agreed upon way back in 2007. However, the unitization talks have been stalled since 2013, and the map has yet to be ratified. Absent of such agreements, the scope for legal disputes over potential resources will be considerable, exposing the interests of both sides to unnecessary delays, but hurting Lebanon more because it would prevent this country from assisting and learning in the process – and rob its people of revenues to which they are entitled.

No such questions hang over Egypt’s Zohr field, which lies adjacent to Cyprus’ EEZ, because the modalities of any shared reservoirs have already been set by Cairo and Nicosia. Time is running out for Beirut to protect its long-term interests with a similar agreement that would, inter alia, insulate it against any kind of “rule of capture” claim if and when Cyprus starts recovering oil and gas from areas adjacent to Lebanon’s EEZ.

The solution is clear: Lebanon needs to re-engage with Cyprus as soon as possible and, when it does, to remain focused and keep its priorities in order. If recent history is any guide, there will continue to be distractions that limit the pace of oil and gas development, including the ongoing stalemate in Lebanon’s political class and various obstacles attached to (and compounded by) the state of war that still exists between this country and Israel. To further complicate the situation, the latter is one of three regional states, along with Syria and Turkey, that have neither signed nor ratified the United Nations Convention on the Law of the Sea (UNCLOS), usually the most reliable mechanism for resolving offshore resource disputes.

No matter. None of this prevents Lebanon’s diplomats and energy officials from getting on with the business of finalizing the necessary arrangements with Cyprus. The politicians may not get around to activating Lebanon’s energy industry as a whole any time soon, but this aspect is a no-brainer: in order to ensure Lebanon receives any revenues to which it is entitled from shared reservoirs, all it has to do is reach an agreement with a friendly country. And although there is no agreement on the tripoint where the EEZs of Lebanon and Cyprus meet that of Israel – leaving an overlap between the Israeli and Lebanese claims – this has no bearing on the rest of the bilateral line between Lebanon and Cyprus, or, for good measure, on the 90 percent or more of Lebanon’s EEZ that is not in dispute with anyone.

Sharing the spoils

Lebanon and Cyprus can accelerate this process by jointly enlisting the support of the United States to help define the aforementioned southern tripoint. The Israeli failure to commit to UNCLOS is a significant obstacle, as is the absence of Lebanese-Israeli relations. At present the only country with the diplomatic heft to ford this impasse is the US, which, through separate discussions with Lebanon and Israel, has already made progress in narrowing the gap between the two sides’ respective maritime claims.

Timely cooperation with Cyprus will also preserve Lebanon’s interests by garnering fuller recognition of our EEZ. The same partnership may allow Lebanon to start collecting revenues from shared oil and gas fields even before its own production begins. Further down the road, if and when Lebanon is producing enough natural gas for export, Cyprus can be an important outlet to crucial markets in Europe and elsewhere.

Of course, it would be nice if more politicians would provide these and other negotiations with all the support and cover they deserve. Most of Lebanon’s political institutions have been hamstrung by partisan wrangling, but parliament still has considerable resources. Having the legislative branch resume its role could be pivotal on this score.

Lebanon is not the first country to face the unique challenges of developing an oil and gas industry during a prolonged period of turmoil, and luckily one of the best examples is Cyprus itself. A third of that country has been occupied by Turkey since 1974 and its political landscape is a raucous one, populated by outsized personalities with sharply different views, and with an economy that is still struggling to regain the ground it lost since the global financial crisis of 2008-2009.

Despite these handicaps, and some decidedly unsubtle Turkish threats, successive Cypriot presidents and their ministers have kept their eyes on the prize, methodically laying the groundwork for its future as a modern oil and gas producer and, quite possibly, as the region’s premier energy hub. Successes at home have been matched by effective diplomacy abroad, integrating the tiny country into an interlocking web of bi- and multilateral partnerships that give it a voice on the regional stage. In addition, far from acquiescing to the continuing division of the island nation as an insurmountable obstacle to this process, Cyprus has turned the tables by holding out future energy revenues as an incentive for reunification.

These attitudes have allowed for meaningful progress across the legislative and regulatory spectrum, encouraging investments and partnerships that even now are fleshing out the infrastructure and support systems for a thriving oil and gas sector. Even more importantly, they have demonstrated the effectiveness of dialogue and cooperation, showing a way to break the cycle of conflict and instability that has gripped much of the region for so long.

That may sound like a lot of ground for Lebanon to cover if its energy sector is ever to catch up with those of Cyprus and other neighboring countries, but the facts are not quite so bleak.

Before the current political stalemate spread into virtually every nook and cranny of the Lebanese public sector, parliament and cabinet designed and even began to install many of the necessary administrative and legal structures, including a suitably empowered Lebanese Petroleum Administration to oversee the sector. While not quite “plug and play,” most of these can start functioning as soon as the right levers are pulled and crucial pieces of enabling legislation are passed. Therefore, while it is probably too much to hope that Lebanon’s deeply divided politicians will act with unity of purpose any time soon, if and when sufficient numbers of them get serious about serving the people they are supposed to represent, the right tools for the job will be close at hand. 

Finally, Lebanon should also strongly consider joining the emerging club composed of Cyprus, Egypt, Greece and Jordan. Apart from the technical and economic advantages to be gained, the various cooperation agreements linked to this grouping give each member greater influence over how the Eastern Mediterranean’s energy resources will be developed. Signing on would radically enhance Lebanon’s standing, and while the immediate goals of such membership would be economic, the resulting relationships would do much to promote regional stability. That, at least, would offer some hope that all of the peoples in the Eastern Mediterranean might one day know both peace and prosperity.

Roudi Baroudi is CEO of Energy and Environment Holding, an independent consultancy based in Doha, Qatar.

The post What lies beneath appeared first on Executive Magazine.

Financial markets have rallied significantly from mid-February to mid-March, supported by several events including, but not limited to, the G20 summit, the Chinese National People’s Congress meeting, the expansion of the European Central Bank’s (ECB) quantitative easing and the Federal Open Market Committee’s March session being more dovish than expected.  So what’s next for global financial markets?

Short-to-medium term, it now seems that we are due a slowdown in the markets, given that they have already rallied from the year’s lows.

“In a context where it is difficult to imagine that there is much left in central banks’ tool box, especially the ECB, that now pushes for fiscal measures, we believe that a correction is likely as investors will focus on fundamentals,” explains Christophe Barraud, chief economist and strategist at Market Securities, who, according to Bloomberg, ranks as top forecaster of the United States and Eurozone economy in 2015.

Highs and lows

It is indeed difficult to imagine what more the ECB could do, given that Germany will likely be opposed to further easing and, as suggested by the ECB statement on March 10, it is now time for governments to implement structural reforms.

In the US, overwhelming economic pessimism is dominating the 2016 presidential campaign, whether from an economic or geopolitical standpoint, which should lead markets to come down from current highs.

Furthermore, Marc Malek, founder and portfolio manager at Conquest Capital Group, highlighted that we are now witnessing a bubble in government bonds which is “why you are seeing these desperate actions.” So it is hard to see equity markets rally sustainably, with all else remaining constant, without first seeing a market correction.

The consequences for the world economy if China starts to falter and the Chinese central bank fails to successfully intervene will cause further turmoil to the global markets, as it has in the last year.

Whether a global market slowdown or a bigger correction is imminent, it is essential to differentiate the impacts on financial markets between regions.

In fact, unlike the Eurostoxx 50 index, the Dow Jones Industrial Average finally turned positive on the year (+0.4 percent year to date, as of March 29). We’ve also seen the Standard & Poor’s index outperform in the US over its European counterparts YTD (the S&P has outperformed the Eurostoxx by 7.7 percent YTD as of March 29, with S&P -0.5 percent YTD, and Eurostoxx -8.2 percent YTD), which has been the trend in recent years. This gap might widen even further this year, given that, as Barraud maintains, “political uncertainties surrounding Spain, Ireland, Greece and Brexit will be a drag.” This is in addition to a stronger euro which will be weighing on European equities, the ECB running out of tools, and a Europe that is facing the largest migration crisis on the continent since World War II. This trend is also reflected in Bloomberg’s company earnings expectations for 2016, with S&P forecasted to outperform Stocks Europe 600 by 4.4 percent.

The ECB believes it’s time for governments to implement reforms | AFP

Meanwhile, in the US, the correction might be less pronounced. It’s an election year and if Hillary Clinton becomes president, as is widely predicted, this alone should help US equities. This is because Hillary is a well-known figure worldwide with a somewhat predictable policy portfolio (despite being market negative for sectors such as healthcare and banking). Donald Trump, on the other hand, is a much more unpredictable figure who will not bode well for the markets, unless he presents a very precise and efficient economic program.

Furthermore, the Federal Reserve is turning more dovish, with only two rate hikes expected, rather than the predicted four, which should also help US equities rally.

Investment advice

So where should one invest their money today, given the pessimism in which we started the year and given that equities have already rallied from year lows? It depends on duration. Short to medium-term it seems that US equities are a safer bet than Europe for a long position, while Europe is probably a good short, or hedge to a long, as it is a good time to “sell the news”.

Going back to fundamentals, and picking cheap stocks who are disconnected from their fair value, whether buying undervalued defensive sector names (healthcare, staples) for the more conservative ones among us, or even buying the dip in cyclical names such as European banks, could make much more sense for a longer-term horizon investment. Personally, I wouldn’t buy European luxury names yet, given the sector’s exposure to and correlation with China, but note that most European luxury names have low earnings expectations for Q1 already. Nonetheless, whichever the index or sector, investors should not wait for the absolute bottom, as many have unsuccessfully been trying to do for the last three years, given that, despite the market volatility, the trend has been upwards. Moreover, momentum trading (buying when markets rally and selling when markets are going lower) has probably hurt more than it has profited investors, due to the extent of the moves and the fear to re-initiate a position too early, while the long volatility trade is most likely also over.

The best way to look at the markets and invest today is on a relative-value basis, the old adage: studying the fundamentals and buying undervalued assets and equity. In fact, Domenico de Sole, the chairman of auction house Sotheby’s, emphasized that there was a notable “slowdown in the art market today”. From speaking to art collectors, it does seem like US and European buyers are somewhat waiting for prices to stabilize, galleries to give decent discounts, and some top-level buyers are even expecting a correction in the New York May auctions. There is no better opportunity to invest than when the market slows down and asset prices have dislocated from their fair value.

The post Money talk appeared first on Executive Magazine.

The most common ecosystem disturbances are fast and furious. Earthquakes. Floods. Fires. Not so Circular 331. The initiative by Banque du Liban (BDL), Lebanon’s central bank, provided a long-awaited capital injection into the country’s entrepreneurship ecosystem. But it’s a disturbance more akin to climate change than a meteor strike. Organisms long part of the ecosystem are adapting to the new disturbance, and it’s acted as a draw to bring new biomass into what is still a relatively small space for the startup-minded.

In late March, central bank Governor Riad Salameh indicated Lebanese banks had committed $243 million to the ecosystem, around half of what 331 makes available (i.e., 3 percent of commercial and investment banks’ Tier 1 capital, an amount that grows year-on-year as bank profits increase). To date, only around $50 million has been deployed.

While Executive heard no shortage of complaints (some of them contradictory), no one the magazine spoke with for this article feared the money would go uninvested. The newness of the idea and associated processes as well as the ecosystem’s relative immaturity, several interviewees say, are among the factors hindering a more speedy deployment. After all, according to Executive’s research on the topic and an engagement with the country’s new Startup Ecosystem Think Tank, Lebanon is the only example of a central bank orchestrating and executing a policy to nurture an entrepreneurship ecosystem (as opposed to a country’s executive or legislative branches of government taking such a policy initiative).   

Clearing the backlog

Prior to 2010, venture capital (VC) and private equity (PE) funds were not doing much in Lebanon. Between launching in 2006 and losing two of its key investors four years later, entrepreneurship organization Bader’s Building Block Fund (BBF) invested in — and quickly exited — exactly one company. And it wasn’t even Lebanese. A local bank’s attempt at a VC fund in the same time period folded before deploying a dime. The only success story during these years was the 2008 launch of Berytech Fund I. For two years, Berytech basically owned VC and PE space in Lebanon. A competitor emerged in 2010 with the birth of Middle East Venture Partners (MEVP), which launched its own MENA-focused fund that same year and took over management of the BBF, currently known as the BBEF.

Combined, these three funds totaled around $23 million. Post-331, both Berytech and MEVP raised new funds focused mainly on Series A investments with a combined total value of $120 million ($50 million for Berytech and $70 million for MEVP). Berytech has deployed around $20 million (announced in one batch in December 2015) and MEVP $29 million, representatives of each tell Executive. Both Berytech Fund II Manager Paul Chucrallah and MEVP Managing Partner Walid Hanna say that these deployments are largely backlog investments, meaning the deals are not exactly new, but neither had the cash available before 331 to make them. Aside from that commonality, the two men have divergent views on the months and years ahead.

Chucrallah says he’s comfortable doing one or two investments over the next few years and is not overtly concerned about deal-flow in the ecosystem. Hanna, on the other hand, focuses almost exclusively on pending pipeline problems in a 30-minute conversation with Executive. “The problem is Lebanon is very small and [existing and new] VC funds are competing for pipeline that doesn’t exist,” he says.

Concerning fund efforts to fill the pipeline in the future, both point to Speed@BDD, to date the country’s only startup accelerator — an ecosystem component meant to help early-stage companies mature at a rapid pace. Berytech Fund II and MEVP’s 331-compliant Impact Fund each invested in Speed, and both Hanna and Chucrallah say they’re hoping for more capital soon. In October 2015, the central bank’s 331 point person, Marianne Hoayek, told Executive that Speed would be receiving investment from local banks with a 100 percent guarantee (even safer than the standard 331 guarantee of 75 percent). She explained that the central bank was giving banks 100 percent guarantees if they invest in ecosystem components like accelerators. Hoayek was not available for an interview for this article. Hanna says Speed’s investors are still pushing for 100 percent guaranteed money. Chucrallah was less specific on how the funds were lobbying the central bank for more capital for Speed. “Whatever happens, we will take it,” he says.

Closing a gap

Seed funding for startups – a need angel investors meet in many other markets – was largely lacking in the first two years after 331 was published. While Speed pumps $30,000 into the companies it accelerates, it became the only game in town after AltCity’s Bootcamp – a pre-accelerator, meaning they nurture entrepreneurs from the idea stage, earlier than the ventures Speed accepts – stopped doing equity investments in late 2015. That won’t, however, be the case for long. Lebanese entrepreneurs – and twin brothers – Ghaith and Abdallah Yafi found success abroad and returned to the country with the goal of raising their own VC fund after doing some angel investments in 2013, they tell Executive.

By the end of April, they say, they plan to formally launch a seed-stage focused fund, dubbed B & Y Venture Partners, making use of around $40 million in 331 money. As the Yafis spoke to Executive in late March, they explained the exact fund size was still being finalized as the fund’s 20-plus investors were busy putting final signatures on the fund’s legal documents. When it launches, it will have a temporary advantage of being the sole seed-only fund catering to the Lebanese market. Moreover, the Yafis describe it as a “hybrid” fund, meaning between $10 and $15 million comes from private investors and will not have the same limitations as the $40 million in 331 money local banks have contributed.

“We understand private investors today will not invest in a fund where only the banks are subsidized,” Abdallah explains. So, he says, they adjusted the risk-reward profile to draw in non-bank money. The fund is charging a 25 percent carry instead of the more common 20 percent. “But we’ll only take 20 for ourselves and 5 percent will be channeled to our private investors,” he says. Based on simulations the fund managers have run, this can translate into better returns for investors on fund liquidation. For example, if the fund achieves a return of 20 percent, the reward incentive structure gives private investors “a bump from 20 percent to around 32 or 33 percent,” or a 50 percent increase, Abdallah says. The banks accepted this structure because the private money will be invested strictly outside of Lebanon and “at a slightly later stage” than the 331 money.

B & Y may not for long be the sole seed-only fund in the market. Other new players are looking at early-stage opportunities including Cedar Mundi Capital. The fund has an appetite for seed investments, according to Bassel Attieh, co-principal at Cedar Mundi and executive VP at Kuwait’s International Financial Advisors KPSC. Attieh speaks to Executive in a short email exchange, and explains that Cedar Mundi is a joint venture between International Financial Advisors and Spain’s Alma Mundi Ventures. The fund, Attieh explains, received central bank approval in October 2015 and hopes to raise between $50 million and $70 million. He adds that “at least nine banks and one financial institution have firmly committed so far.”

Like B & Y, it will have a hybrid structure, with around 10 percent of the fund’s capital raised “committed by the founders of the fund” and not restricted by 331. “The fund will be investing between $500,000 and $1 million in Seed Stage opportunities and between $1 million and $5 million in Series A&B opportunities,” Attieh says, without specifying how much equity the fund will be asking for.

Cedar Mundi announced its first ticket of $1.5 million in December, investing in ChefXChange, an online portal for finding private chefs. While it will help close the seed funding gap, Cedar Mundi is arguably also the kind of adaptation BDL was hoping for when drafting 331. The managers are foreigners whose expertise will theoretically benefit the entire ecosystem, and their first investment – which has a Lebanese expatriate co-founder – is only now moving its headquarters to Beirut in order to receive an investment under 331. Cedar Mundi has “nine other active deals in the pipeline.”

When Executive last spoke to BDL’s Hoayek in October, she said there would soon be two or three seed-focused funds on the market. Reporting for this article, Executive heard rumors that five new funds would begin operating soon. One, Azure, will focus on fashion with a digital component as was first revealed in Executive in November. The magazine was unable to reach the managers for this report. Executive could not reach the four other funds that will allegedly be launching soon.

VC funds, of course, are not the only funding source for Lebanese entrepreneurs. As noted above, angel investors play a prominent role in seeding startups in other markets. However, as Theo Khoury of AltCity’s Bootcamp explains, “There isn’t an angel culture in Lebanon.” Bootcamp has not seen much interest from angels in the startups it’s incubating. That is not to say there are absolutely none in the country. Sami Abou Saab, Speed’s CEO, says the accelerator has piqued the interest of at least four high net worth individuals, three of whom offered investments which respective startups have yet to accept.

Investing in human capital

Although Circular 331 does not actually include the word “technology”, it mandates that banks (and the funds managing their 331 money) invest only in startups that rely “on knowledge economy and support of creative intellectual skills (Intellectual Capital).” In the field, it is being interpreted as a “tech-only” initiative and there are no shortage of complaints about human capital deficiencies in coding as well as software and application development. Startups can’t grow without the right talent, so the lament goes.

While Lebanon has private coding crash courses — such as Teens Who Code and Le Wagon, founded in 2014 and 2015, respectively, and SE Factory, a Bader and Nawaya Network initiative launched in March — there’s a new player on the market making use of the aforementioned 100 percent guarantee offered by BDL. Also launched in March, Torch offers a free, three-month coding course with an eye on both servicing and helping further develop Lebanon’s startup ecosystem. Co-founder Youssef Jalloul explains that Torch aims to graduate coders with ideas for startups (and would take a 4 percent equity stake in any young companies it graduates) but concedes many coders “don’t have an entrepreneurial mindset.”

He says he expects many graduates to simply look for better jobs in the fields they’re interested in than the ones they have now. Jalloul explains that some of Torch’s first batch of students studied computer science but could only find work answering phones in call centers. Even if Torch does not itself produce a high volume of startups the way Speed and Bootcamp are expected to, Jalloul still sees the program adding value to the ecosystem through these talent investments. He adds, while giving Executive a tour of the company’s expansive top-floor office, that Torch may add startup incubation to their portfolio of services as they certainly have the space.

Scaling up

On its naturalist foray into the ecosystem, Executive also finds an adaption at the UK-Lebanon Tech Hub. Initially focused on accelerating early-stage startups (and taking them to London for international exposure), Director Nadim Zaazaa tells Executive that future acceleration cycles will focus on more established startups looking to scale their operations. Part of the reason, he says, was a feeling at the Tech Hub that Speed and Bootcamp are helping the early stage companies well enough. The initiative, brokered by the UK and Lebanese governments, has a two-year lifespan. Asked if that’s also something that might mutate soon, Zaazaa smiles and says “April”, in reference to an event the Tech Hub was planning at the time of the interview in March.

New market, new model

Flat6Labs, an accelerator founded in Cairo in 2011, will be launching in Beirut this summer, CEO Ramez Mohamed tells Executive. This news comes on the heels of back-to-back announcements in 2015 and 2016 at Arabnet, a regional technology conference hosted in Beirut, that the company would be coming to Lebanon soon. Mohamed says Flat6Labs has been in contact with Arabnet, its local partner, and the central bank for one year. And, unlike in other markets, Flat6Labs in Beirut will not be an accelerator, he says. Rather, it will be a fund but will offer startups in which it invests the same sort of accelerator services it offers in other markets. He adds, however, that because the company will not be registered as an accelerator, it will not be seeking a 100 percent investment. Flat6Labs’ Lebanese fund will total $20 million, Mohamed says.

Elephant in the room

One factor neither the ecosystem nor the central bank can control, however, is the regulatory framework in which the system is operating. Lebanon’s capital markets are laughable, says Henri Asseily of Leap Ventures, which is managing a $71 million Series B fund, and the legal procedures for setting up a fund and making investments are cumbersome and time consuming, he adds.

Since Lebanon actually lacks a law governing venture capital and private equity funds, all funds in this country are legally registered as holding companies. Asseily adds that the risk aversion of pre-331 investors into startups produced complicated term sheets that also make it difficult for Leap to make follow-on investments into existing startups. He says Leap is eyeing two big investments that, if they go through, would mean the fund is more than 50 percent deployed. And aside from the legal troubles, Asseily is worried there is not enough series B money in the system. “We have to go bigger,” he says.

The post A stroll through the ecosystem appeared first on Executive Magazine.

When hiking through an aging natural forest, did you ever accidentally burst your foot through an old log and see the wood fibers crumble while bugs and worms scuttle away into the moss or wiggle around your hiking boot? That is a moment to not only gaze at the young shoots, but also appreciate the secrets of an ecosystem’s functionality. Effective decomposition is vital, contradictory as this may sound, to every functioning ecosystem. It liberates resources for re-composition into new uses and, eventually, new structures.

Another characteristic of a successful ecosystem is its ability to respond to disruptions and function with resilience. All ecosystems, science says, are exposed to disturbances. They can range from your boot interrupting the decomposition of that rotten tree to a volcanic eruption that spews an ocean of hot ash for miles around. Either event will disrupt the ecosystem and change it but even a mass destruction event might not eradicate it; when Mount St. Helens blew in 1980 in one of modern history’s most devastating volcanic outbreaks, no one was more surprised than the scientists observing the area after that violent event to see how quickly new plants broke through the cover of ash and how tenaciously life grew back in the surrounding mountains in the United States’ Pacific Northwest.

Natural environments will not deliver this resilience if they are put together by a landscape designer. Both the sheer number of constituents and complexities that are encapsulated in an ecosystem, and the unpredictability and specificities of external variables that are testing its resilience, make it a thankless task and fool’s errand to try and construct a perfect biological ecosystem; and quite probably this is equally true for business environments.

Judging acceleration

Because digital ecosystems are human-driven and thus exposed to Murphy’s Law even more than they follow Moore’s law, it stands to reason that their resilience will only be proven after they have withstood the impacts of external disruptors and risks from new tech to politics, geo-economic forces and climate change factors. Developing and proving this resilience, however, is not a short-term task.

In the days of the New Economy, when the media buzzwords were incubator and cluster (instead of accelerator and tech hub), every aspiring economy, including the Lebanese, was talking about emulating the US information technology revolution by having their version of a Silicon Valley. Shortly thereafter, however, the burst of the New Economy bubble eliminated countless dot.com ventures (London-based fashion site boo.com, which failed in 2000, was one of the bubble’s top destroyers of Lebanese investor money). The massive disturbance, in ecosystem terms, taught investors and entrepreneurs important and hard lessons of decomposition and set the digital economy back to square one of the long journey to real profitability.

In the current iteration of the innovation ecosystem concept, the digital economy has shown that the lessons of the dot.com crash did have positive impacts. But this neither means that the current system is perfect in any way nor that it has already reached full maturity or resilience.

A case in point for yet-to-be-proven value propositions are the accelerator programs. According to the 2016 report by the Seed Accelerator Ranking Project (SARP), a research initiative by US-based scholars Yael Hochberg and Susan Cohen, proliferation of accelerator programs in the US in the past few years has resulted in the emergence of hundreds of programs that do not meet the criteria for calling themselves accelerators. “Even within the group of programs that meet the criterion of an accelerator – a fixed term, cohort based program that includes educational and mentorship components and culminates in a public pitch event or ‘demo day’– there are differences on many critical dimensions, including program structure, management, goals and, most importantly, efficacy. For an entrepreneur considering an accelerator program, finding reliable data regarding the performance of programs is difficult, and there is much confusion and debate regarding how ‘performance’ should be measured for an accelerator,” Hochberg and Cohen write in their report, which was published last month.

Entrepreneurs need more transparency on the performance of accelerators because the exercise is prone to incur a high cost in form of equity. “Equity is an entrepreneur’s most valuable currency, so the non-monetary benefits such as mentorship, network and exposure to future investors are an important part of the decision to attend a program,” they note.

Another scholar, visiting fellow at the Brookings Institution Ian Hathaway, concludes from his research that startups which graduated from “top programs” achieved milestones in fundraising and gaining customer traction. “However, these positive effects dissipate when looking at a broader sample of accelerators: many programs do not seem to accelerate startup development, and in some cases may even slow them down,” Hathaway cautions in a contribution to Harvard Business Review.

While these scholarly findings derive from research into US-based accelerators – whose numbers according to Hathaway have skyrocketed from 16 in 2008 to 170 by 2014 with a flattening of the curve since then – the positive implications and the cautions very likely apply to international programs, with the extra remarks that international programs are still younger and much less researched than their US peers. From the Middle East, at time of writing, only two accelerators in Arab cities met the criteria for inclusion in the Global Accelerator Network (GAN) list of members; one in Cairo and one in Jeddah.

Growing with diversity

According to Hathaway’s paper Accelerating growth: Startup accelerator programs in the United States, there are indications that accelerators bring benefits to participating companies and broader startup communities despite little systematic research having been done because of the newness of the accelerator programs. “Regional development leaders need to recognize that ideas, talent, capital and a culture of openness and collaboration are all vital to regional startup communities, which are best thought of as innovation ecosystems involving complex interaction among entrepreneurs, investors, suppliers, universities, large existing businesses and a host of supporting actors and organizations,” he advises.

The recommendation resonates with what Executive has experienced as stakeholder in complex interactions that are shaping and are expected to sustain an innovation ecosystem in Lebanon. Situated outside of the narrow network of organizations and actors with vested interests in running the system, the magazine has for years been committed to analyzing entrepreneurial companies and the system itself, as evidenced by the magazine’s role in the Global Entrepreneurship Week and our annual selection and recognition of the top 20 entrepreneurs starting in 2012.

Thus when examining the current state of development in the Lebanese innovation ecosystem we opted to review perspectives from both stakeholders and companies. We moreover looked at both intrinsic factors such as the latest new investment funds that have entered the supply chain of funding companies in the stage of formation, and at extrinsic and intangible factors that play a role in Lebanon – mindful of the insights regarding complexity that real-life ecosystems afford us.

The first thing that emerges from the Top 20 selections since 2012 is a strong correlation between the Executive list of top entrepreneurial ventures and the company names which one encounters as winners in competitions, funding events and highly rewarding exits. Just to give one reference, the companies Diwanee and Shahiya, which achieved notable exits in March and November of 2014, were recognized by Executive as Top 20 Entrepreneurs in 2013 and 2012, respectively. Fundamentally, companies recognized by Executive as entrepreneurs have since their Top-20 listing created positive impacts in areas from health-tech and fintech to communications, software, entertainment and beyond that to developments in the agriculture, environmental and alternative energy sectors.

For our present reality check on the evolution of the Lebanese innovation ecosystem, we turned to three companies from the Top 20 Entrepreneurs in Science and Technology, which Executive had recognized in November 2014. We selected companies working on three hot topics, namely cyber security, economic data and renewable energy.

One of the companies – cyber identity protection vendor myki (see interview here) – has participated in several startup competitions and acceleration exercises abroad; the two others – Economena Analytics and Sharp Minds (interviews here and here) – have pursued their growth without the use of acceleration programs. Their choices have also differed in financing: Sharp Minds and myki have negotiated fundraising rounds in 2015; Economena has chosen to seek no funding in 2015.

When it comes to their view of the financing environment, the verdict is two-and-a-half-thumbs up between the three companies. The experiences of all three validate the progress that has been made possible by Circular 331 and the gradual diversification of the funding landscape through the formation of additional providers (see story here). The comparatively minor hiccups that still mar the funding side are a certain lack of transparency – as Economena’s Tamim Akiki points out, no such thing as an annual report on Circular 331 has been produced – and cumbersome bureaucratic requirements, which both applicants and fund managers confirm to Executive on or off the record.

Three thumbs are also pointing skywards in terms of access to talent. All three companies speak highly of their human capital; Antoine Saab and Nadia Moussouni at Sharp Minds tell Executive that they found top-notch talents among fresh graduates at local universities and among people in the labor market. “We have been very lucky to find true talent among people who came back from abroad but then found themselves in the crisis in Lebanon,” Moussouni says.

For myki, being located in Lebanon at their present stage of development was an advantage that was too good to give up even in exchange for an investment when this would have come with a requirement to relocate to another country. According to myki’s co-founder Priscilla Elora Sharuk, the benefits of having a strong local network and market knowledge were non-negotiable.

While all three firms confirmed the value of their involvement in the growing Lebanese innovation ecosystem, there were also thumbs-down verdicts in important areas. The insufficient size of the local market made all three firms scoff at the possibility of focusing their growth strategies here. Moreover, using Lebanon as sole operational base is not a proposition from the perspective of a self-respecting tech startup.

As other young entrepreneurs like the goggle-with-heartbeat-monitor producer Instabeat (Top 20, 2012) and automatic-guitar-tuner maker Band Industries (Top 20, 2014) have also found out, Lebanon is not a place for prototyping a hardware device and the industrial logistics are at best cumbersome. This important deficiency seems to have informed decisions of aspiring companies such as myki and Sharp Minds to the point that the latter established a subsidiary to set up what Saab describes as testing & certification and quality control center, plus logistics hub in the city of Burgas on the Bulgarian Black Sea coast.

With respect to the values and lessons of organic development, the entrepreneurship environment is clearly benefiting from the diversity and engagement of its people. Taken all together as a batch of corroboration, the experiences of the entrepreneurial teams both validate and challenge the Lebanese innovation ecosystem.

The post Tech entrepreneurs update appeared first on Executive Magazine.

There is a tremendous link between what Lebanon needs in terms of information, transparency and planning, and what improved data can help deliver. In this context, Executive followed up on developments at Beirut-based data services provider, Economena Analytics, with company founder Tamim Akiki and deputy chief executive Amani Kandil.

E   What has happened with Economena since Executive interviewed you for our entrepreneurship report on tech companies which was published in November 2014?

Tamim Akiki (TA): October 2014 was when we launched our flagship product, the Economena User Station. Starting with the launch, we have seen some good uptake of our services from the market. We signed up several more clients in Lebanon, including banks and universities. In the year 2015, we improved the product a lot and added new features, including a cool feature called Tables. This feature facilitates visualization of data from different sources and allows clients to manipulate data to see different rankings and changes. This is a first in Lebanon and it is completely dynamic.

E   Was the development of data and tools your main focus in 2015?

TA: We also launched the Lebanese Economic Outlook survey. We published three editions of the survey where we poll our clients and other economists in the local market about the outlook for the economy to try to separate the good sectors from the bad sectors.

E   Did you take steps in relation to overall business development?

TA: We have invested a lot in our outreach and in the optimization of our platform, some of this based on client feedback. We also grew our revenues in 2015 by around 35 percent. In organizational terms we established two new businesses, an offshore enterprise which helps our foreign clients, who represent two thirds of our revenues, and a joint stock company. For the coming year we are looking to sell more subscriptions to the United States, breaking into the academia sector.

E   What happened on the team development side? How much did you grow?

Amani Kandil (AK): We did not grow much, in Lebanon that is, but we have focused on developing our team. We added a team in Nepal that helps with data extraction and we now have one team member in Egypt as well.

TA: The reason we invested in the Nepalese and Egyptian teams is also because we are focusing on developing our coverage this year. We are going to add a lot more countries with extensive coverage to help existing clients in Lebanon save costs in their expansions and coverage. Thus the banks that are investing in Egypt as a growth market will now have access to a full Egyptian database at Economena. We also did a lot of stuff internally [to upgrade our team’s capabilities] and Amani is now managing the business altogether.

E   How did that feel, to move into this responsibility?

AK: The nice thing about working here is that it is not a one-person responsibility. It is a shared responsibility. So [being deputy CEO] is just having a fancier title.

E   How large is the Economena team now?

TA: We are 12 full-timers here, five in Nepal, one in Egypt and one sales and marketing in the United States.

E   Did you do any fundraising in 2015, and specifically did you approach any venture capital funds for Circular 331 money?

TA: We did not but we are currently in negotiations with two different parties to raise money or finance part of our expansion into the Gulf Cooperation Council and the US. This would mean either specific financing for our sales and marketing expansion into the US and the GCC or an investment into the core business, which would possibly be through Circular 331. We expect to obtain funding in 2016.

E   Was there a reason why you did not seek to obtain equity finance from local VCs in 2015?

TA: We wanted to wait and see. Circular 331 was issued in August 2013 and has not been in effect for a very long time, so we wanted to see how the relationships between the VCs and the startups develop. Our business is more of a long-term value proposition and we want to be very careful about who we are working with.

E   When someone asks you if you are a startup or an entrepreneurial company, how do you describe yourselves?

AK: As an entrepreneurial company, not as a startup.

TA: One of our key advantages is that a lot of our business is based on contracts that are ongoing and will be ongoing for several years into the future. At the same time, our core product, the Economena User Station, is still very early in its life cycle, so it is a startup project by itself.

E   How large do you see your growth potential in the next three to five years?

TA: Our five-year business plan through 2020 foresees annual revenues of $3 million to $5 million from subscriptions and the Economena User Station. A large part of that revenue will come from North America and effectively international markets, excluding the Middle East. The Middle East will contribute approximately one third of our revenues.

Can you tell us in closing how much in terms of investment amounts you will be shooting for in your fundraising in 2016?

TA: We are looking for anything between $500,000 and $1 million in 2016.

The post Economena Analytics appeared first on Executive Magazine.

Antoine Saab and Nadia Moussouni are the entrepreneurs behind Energy24, a power storage solution which they claim is suited to solving the most challenging electricity supply problems. Since being recognized as a Top 20 entrepreneurial company by  Executive in 2014, their company Sharp Minds has added a solar energy component to its electricity storage product.

E   What has happened at Sharp Minds since we met in October 2014 to discuss the Energy24 project for the Executive Top 20 Entrepreneurs?

Antoine Saab (AS): First, 2015 was a year of stabilizing a version of one of our products. We reached a point where we technically finalized this V1 and moved to another product, version two, in a process of continuous development.

Nadia Moussouni (NM): We perfected V1 and have included all the controls that will help people avoid doing stupid things with it; it is almost unbreakable.

AS: The second issue on which we worked in 2015 was funding on both the equity and the debt side. We reached a deal with CreditBank under which our customers can finance their Energy24 units and made an agreement on our credit lines with the same bank. Also on the debt side, we signed a deal with Kafalat to obtain the highest possible financing amount available under the Kafalat Plus program. On the equity side, we closed our first round of funding through Leap Ventures. The year was basically fundraising.

NM: We finished 2015 with enough funding to look forward to further acceleration and started recruiting. Compared to being only two to three people at the end of 2014, we have since increased to almost 15 and we will be about 50 people by the end of this year.

E   How far has the solar component developed in 2015?

AS: Our portfolio is now almost 50-50 between solar and storage. Half of our customers have storage units only, the other half have batteries plus solar. Since we offer hybrid solar, the half [of our customer base] that has hybrid solar is injecting enough power into the grid to compensate for what the other half is using. If you want, our customer base is grid-neutral in this way.

E   How much has your customer base expanded?

AS: We had a growth rate of about 300 percent year over year between the end of 2014 and the end of 2015, and we think that we might reach about 400 percent this year.

NM: We currently don’t have any salespeople and are only selling thanks to our reputation.

E   But you told me that this is going to change soon.

AS: We are now building our sales force. We have rented a 700sqm office in Sin el-Fil where we will soon be moving. Besides the 15 people that make up our current team, we have just hired five to six people who will join us to build our sales force, starting April 1. Today I signed a lease for our first outlet in Sidon which will be operational on June 1. By the end of 2016 we expect to have two outlets toward the south, in Khalde and Sidon, and one in the Bekaa, plus our outlet in Sin el-Fil. In 2017, we will hopefully tackle Keserwan and North Lebanon.

E   What was your experience in raising funds?

AS: I first have to say that I think that Banque Du Liban (BDL), Lebanon’s central bank, has done a great job. I have looked at how many countries handle startups and I think [BDL Governor] Riad Salameh has really done amazing business. [Circular 331] is a bold move and an approach that many other countries should follow.

NM: In administrative terms, the system in Lebanon is a bit tedious and quite complicated. It took us a year to finish the paperwork. But overall we are very happy with the deal we have made. It gives us a completely new perspective and opens up prospects for reaching much larger numbers much faster. We think we will be able to develop products and are already developing products that can go global. This would have been just an impossible dream without the investment into our equity.

E   This was the investment by Lebanese venture capital firm Leap Ventures?

AS: Yes. It is a relatively small investment but as you know, as a startup you should neither over-raise nor under-raise funds. We got offered lower funding, which we didn’t accept and got offered higher investments, which we did not take; we took exactly the funding that we viewed as adequate. We expect Leap to announce the size of the investment soon and want to leave it up to them to do so.

E   Are you already strategizing for the medium-term future?

AS: Absolutely. From the growth that we are seeing and the way we are looking at the market and how it is developing, we think that this company has a good chance of becoming a very large business. By the seventh year we will probably have had a couple of fundraising rounds, perhaps three. Pessimistically speaking, we believe that the company will be a $300 million business [at year seven]. At that level we don’t see a problem replacing the funding [guaranteed under Circular 331] 331 with traditional investors.

The post Sharp Minds appeared first on Executive Magazine.

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Identity protection is a huge and ever growing need in the knowledge economy. Ki, which was initially conceived as a hardware authentication token for password storage by its founders Priscilla Elora Sharuk and Antoine Jebara, is a Lebanese solution for identity protection. Executive caught up with Sharuk to see how the startup has progressed since we last met.

E   When we met to evaluate Ki for the 2014 entrepreneurship list, you were about to travel to Helsinki for an accelerator program called Startup Sauna and were a bit worried about the Nordic temperatures there. How was your experience as a budding Lebanese entrepreneur there and what has happened since?

PES: I survived the cold and the program was wonderful. It is one thing to gain credibility here and an entirely different thing to get it abroad, especially when it comes to a field like identity protection. Seeing the concept given credibility by people who have worked in this space internationally and hear them say ‘you are onto something big’ gave me the guts to come back and say that this deserves to be done all-out. From that point I went full-time myki, which is how we renamed ourselves from Ki for legal incorporation reasons and also to make it more personal. The biggest thing that happened since was a massive pivot from hardware to software.

E   In what way?

Ki was a hardware device, a token where I would swipe my fingerprint and select the service from a screen [for storing passwords]. Prototyping and editing the tokens here [in Lebanon] would take time and we found that it was very difficult [for logistics reasons]. In addition, our market research showed that people understood the value of the product but said they didn’t want to carry an extra token in their wallet. So we thought, why not take the same technology and incorporate it into the one item that you always have with you – your mobile phone.

E   How did the change to a software solution impact your business proposition and costs?

We are now totally focused on enterprise software as a service – SAS. This represents different challenges from hardware solutions but it is definitely easier to manage the challenges on the software side rather than dealing with the manufacturing which is a very difficult thing to do, especially when you do not have enough talent around you meaning that you have to outsource [manufacturing]. Not having to produce hardware devices means that I am free.

E   Production of the tokens in Lebanon was never on the table?

It was never an option.

E   What were the main challenges that the shift has brought?

One of the biggest challenges that we noticed in the region is education. Once people see the product they ask, ‘when can I have it?’ But can I say that people understand the value and the risk of a cyber breach in MENA as much as they do in Europe and the United States? No.

E   Do you see limits of growth and is it your strategy to serve mainly the MENA market or do you want to go global?

No, we are not focused only on MENA and of course we want to go global. We would like to be the leading identity management platform on the market.

E   You have succeeded in gaining equity participations, one of which was announced last month. Can you tell us who the partners are and how much capital they are injecting?

The investment is for $600,000 and comes from B&Y Ventures here [in Lebanon] and BECO Capital in Dubai.

E   The participation is equal between the two?

Yes. We initially wanted to go with one investor but because Dubai is an important market for us, it was strategic for us to have an investment from Dubai and say this is an entry into a new market and access to a new network and more support for the team. Until last year, we were two [people], Antoine and myself. We have since grown to seven. So it is moving at a pretty rapid pace and when we talk about moving global, we are starting here as a test market and then into Dubai and then Europe, the United States and the rest of the world.

E   Was the equity deal driven by Circular 331 or outside of the framework?

The B&Y part of the participation is part of the 331 framework; the BECO portion is not, because it is money coming in from Dubai.

E   Do you already anticipate undertaking later funding rounds?

When doing that round we were looking at an 18-month runway but we already have two VCs who are saying, ‘When you raise again, we would like to be a part of it’. One of them is a Lebanese VC and the other is a Silicon Valley-based VC.

E   Where do you see myki’s future?

A multi-billion dollar company.

E   You want to be a multi-billion dollar company?

We will be a multi-billion dollar company.

E   Moving along that road, where and at what valuation do you expect to be in five years?

That is a very big question. If you ask me where I will be in five years and ask me about a value, that is a question I cannot answer but I know that it is going to be massive. That is what I work for.

The post Locking up the key appeared first on Executive Magazine.

When Lebanon-based Fattal Holding, agents and distributors for numerous global brands in six countries of the Middle East and North Africa region, celebrated the 80th anniversary of their partnership with consumer goods multinational Unilever, the occasion was auspicious enough to bring Unilever Chief Executive Officer Paul Polman to Beirut. Executive used the rare opportunity to squeeze an interview into Polman’s hyper-busy schedule.   

E   I would like to start with a macroeconomic question. Multinational producers of fast moving consumer goods (FMCG) are affected by global economic challenges more and earlier than other types of multinationals. How is Unilever dealing with macroeconomic challenges across the globe?

At this point in history, whether we like it or not, we have to deal with an economic system that produces slow growth and many companies are challenged by that. In Europe there is deflation and a geopolitical environment which is seeing more conflicts than we have in a long time; the [Middle East] is unfortunately one example, but there are many others too.

Then we have the effects of climate change which are coming through at an increased rate. All of that causes a social dissatisfaction that we also have to deal with, and all these forces don’t make it easy.

If you think of that at a high level, of what you can do if you are in my position, the first thing is to be sure that your organization is driven by a strong purpose because the stronger your purpose is, and the more people are aligned with it, the more it will permeate these short term volatilities.

The second thing you need to do is be sure that your organization has a certain level of agility. It is now much more difficult to anticipate all these changes that are going to happen. With a company like Unilever, it means creating four different business units; we are more decentralized, driving decision making down, delayering organizations.

The third thing to do [in tandem with creating] agility, which is the ability to react quickly, is to build up resilience. Agility and resilience have to go hand in hand if you want to be a top performing company. So as a company we spend a lot of time building that resilience and one of the ways in which we do that is to look at our leadership development and what type of leaders we need.

E   In their governance, companies today are looking more and more at bottom-up approaches, embarking on inclusive visions and missions, as compared to a top-down approach. How successful were you in migrating Unilever to this culture?

Changing the culture is the most difficult thing for a financial market to understand and it’s also the most difficult thing to do. In many companies, the top level implements something and thinks the rest of the company will behave which is not true; it takes a long time. For every layer in the company, you will need a year to change the culture. And culture is also influenced by many other things. What is happening is that people are looking for a deeper level of job satisfaction. They are discovering that happiness comes from positively influencing others and leaving the world a better place.

When we moved to the Unilever Sustainable Living Plan [ed.: a transformation project aiming to double the business while improving environmental and social impacts], I took a year to first be sure that our internal organization was aware of what we are doing, because they had to be comfortable with the idea. We don’t incentivize people too much which is interesting, it is not in our bonuses or something like that. We just expect people to join us and the more people join us and are there for that reason, the quicker we can advance our cultural journey.

E   Lately we’ve witnessed a shrinking emerging market which contributed to 57 percent of your revenues a few years back. As an executive committee, when you submit your strategy for the next year to the board, to what extent is the board reasonable or unreasonable in terms of market expectations?

In fact we don’t make forecasts for one year; I don’t think they are very useful. You have to continuously work with the board and make them part of the change process that you are applying in the company. As CEO I am part of the board myself. Board members come from a broad variety of backgrounds, from their knowledge base or region of origin, and they only meet six times a year. Because this world is changing so fast and there are many issues, such as cyber security, digitization of society [and] changing emerging markets, you have to spend a lot of time educating and updating the board [on issues such as] why we have the Unilever Sustainable Living Plan, and why this is our business model. The board, on its end, has to be very confident in the CEO and his management team; after all, the main responsibilities of the board are succession plans, governance and protection of the culture. A lot of the other things are actually delegated to management but the way we work is to engage them as if they are part of the company; I believe this is the best way.

E   To what extent do you think shareholders have taken note of the environmental, social and governance (ESG) concerns as factors in evaluating their investments and do they assess you on your ESG?

The answer is, not enough, but the positive thing is, increasingly so. For example, there is an enormous divestment movement worldwide in the financial markets on carbon. So if you take this specific topic, carbon and climate change, the financial committee has been majorly aware. The reason is that if you want to stay within the two degrees [of global temperature increase] which was a clear signal in Paris, this basically means we have to leave in the ground about two thirds of the carbon stock that has been discovered. These are now called “stranded assets”, so all of a sudden the financial markets are interested.

The other reason, on the business side, is that people are starting to discover that the cost of not acting is becoming higher than the cost of acting. A good example is the insurance companies. Over the last ten years [insurers] paid $2.7 trillion more in response to natural disasters than the normal average; 14 of the last 15 years in history have been the hottest years on record, [and] the sea level has risen. Some people are starting to see this as enormous risk that needs to be dealt with. [Also,] the costs of mitigating [climate change risk] are coming down rapidly because of technology; solar is a good example. You have forty countries in the world where green energy is already cheaper than fossil energy.

So we need to change some things like market mechanisms. We need to price in carbon, we need governments to start developing rules and regulations, we need subsidies in many parts of the world to accelerate this process and the financial markets are taking notice of all this.

The other reason why ESG investment is going well is because 75 percent of the money that is invested by these institutional investors is your or my pension money; it’s the money of us all and society is starting to wake up to the need for change. So the ESG investment itself is the fastest growing. People are subscribing to the UN Global Compact and Principles of Responsible Investing (PRI). We are definitely on the right curve and for good reasons; my main concern is how fast we are [acting]. [To achieve] what we signed in the sustainable development goals and [at the COP21 conference] in Paris, we have to accelerate.

E   To which extent can a company like Unilever be an agent in reinforcing this commitment to the ESG?

A company like Unilever reaches two billion consumers a day in 119 countries and has a value chain that influences tens of millions of people who are directly or indirectly working for us. So we have a longer term view. To implement the sustainable development goals (SDGs), it’s going to cost the world between $2 trillion and $3 trillion a year. This is a low investment compared to the global economy and certainly one that would be a good payout to eliminate poverty in the most sustainable and equitable way, but the overseas development aid from all countries is $140 billion – so where is the money going to come from? It has to come from the private sector.

It’s also really difficult now to depend on the governments alone because most of the institutions that have been designed to deal with the global issues of governance were designed at Bretton Woods when 85 percent of the world’s economy was in Europe and the United States. I am talking about the IMF, the World Bank and the OECD. Today it’s so difficult to forge global agreements when governments come together because we haven’t figured out what the governance is in this increasingly interdependent world, and we are living off a system that is over 70 years old. Business needs to step up because there is no business case in enduring poverty. We need to be sure to forge what I call these partnerships for the common good. When developing the SDGs we insisted on goal 17 which is about partnerships, but these are not partnerships working together on products or on technology; they are partnerships for the common good. If we can rise to that level, we can solve any problem; we just need human willpower which is actually a renewable resource. That is why I often say we need more leaders and we need more trees.

The post The Uni-leader appeared first on Executive Magazine.

Back in 2003, T-shirts with the slogan: “Sushi: Traditional Lebanese Dish” were spotted being worn by young fashionistas across Beirut, illustrating the glowing success of this staple Japanese dish in Lebanon.

Thirteen years later and the Lebanese passion for sushi does not seem to be ebbing away. On the contrary, the estimated number of restaurants serving sushi in Lebanon has to date reached close to a hundred individual outlets.

The early years

Japanese cuisine has been present in Lebanon, to some extent, since the 1980s. First through the restaurants Tokyo in Manara, which was operated by a Japanese woman, and Nippon Mare in Jounieh, according to Nicolas Rebeiz, partner and managing director of the seafood and sushi restaurant and supplier Oceanus, who adds that these restaurants were not focused on sushi.

Aref Saade, owner of Tropical Bamboo, a company which offers supplies, consultation, menu development and recruitment for Asian cuisine restaurants in Africa and the MENA region, recalls that when he returned to Lebanon from Saudi Arabia in 1992, sushi was not common in Lebanon, despite it being a global trend. At the time, Chinese cuisine was more in demand.

Slowly, says Saade, young expats returning to Lebanon from Canada and America who had tried sushi abroad began asking around for it, prompting restaurateurs to open their eyes to this opportunity. In 1995, Boubess Group decided to open a Benihana restaurant in their Commodore Hotel and utilized Tropical Bamboo’s services, serving sushi as well as the teppanyaki that Benihanas are globally known for.

The takeoff

But it was with the opening of Le Sushi Bar in Ashrafieh that the sushi craze took flight.

Mario Junior Haddad, who hails from the cinema business, decided to open Le Sushi Bar in 1998 out “of a passion for food” and because there were no restaurants at the time “that focused solely on sushi even though it was an international trend.” He explains that his concept was a bar where people would sit around the chefs and be served sushi that had been prepared in front of their eyes.

Haddad recalls that restaurant openings were not as common as they are today, so people flocked to Le Sushi Bar to discover the new outlet as well as the new concept, generating quite a buzz. “It hit a chord as well because the place was unusual and worth discovering,” says Haddad.

Five years later, in 2001, Yabani opened on Monot Street, then an area booming with clubs and bars. This stylish underground outlet, designed by the renowned architect Bernard Khoury, cemented sushi’s appeal as a trendy cuisine, explains Ramzi Adada, Yabani’s general manager.

For the love of rice and raw fish

Indeed, these days sushi in Lebanon can be found on many a menu, including international cuisine restaurants or coffee shops, and can even be consumed alongside your argeeleh in a Lebanese café or bought pre-packaged at some local supermarkets.

Rita Ekmekjian, co-owner of the sushi restaurant Tsunami which has four outlets across Lebanon, says that when they first opened Tsunami in Kfardebian, Faraya, in 2003 (the outlet was closed two years later when they moved to the busier area of Ashrafieh) there were only nine sushi restaurants in Lebanon. Today, she estimates the number has grown to 75 pure sushi outlets in Lebanon. If you include the cafes and catering companies which serve sushi, as well the individual branches of chain sushi outlets, Adada places this number at 150.

These sushi outlets are mainly concentrated in Greater Beirut and Mount Lebanon with only a few outlets in the North and South of the country, says Alain Haddad, sales manager at Royal Gourmet, a wholesale supplier of fish used in sushi (mainly salmon), adding that his company only supplies two sushi outlets in Sidon, for example.

Supply and demand

In parallel with the increase in outlets serving sushi is the increase in suppliers of dry goods and raw fish used for sushi. “At first there was only us supplying the ingredients, the consultation, menu development and chefs for Japanese restaurants from 1992 to 1998 when we stopped our supplying activities in Lebanon to open Shogun,” says Saade who currently owns two Shoguns in Lebanon and a few others in the region while running Tropical Bamboo in the countries where Shogun is not in operation.

Le Sushi Bar’s Haddad estimates there are 10 to 15 suppliers of sushi related items today, refuting the popular notion that only one or two companies supply all sushi restaurants in Lebanon. Saade adds that existing food product suppliers also began importing sushi related products when they saw the increased demand for them.

Adada explains that, just as with any other cuisine, choice of supplier would depend on the ingredient, adding that at Yabani they sometimes work with different suppliers for the same ingredient so as to ensure a continuous supply and also to maintain good relations with all suppliers.

Sushi for everybody

Sushi has indeed become one of the most prevalent foods in Lebanon. According to Saade and Haddad, one of the reasons for sushi’s popularity in Lebanon is its perception as a healthy cuisine. Ekmekjian explains that sushi remains a global trend and since Lebanese generally follow trends, they continue to enjoy sushi. She adds that since traditional Lebanese cuisine includes raw meat, the idea of eating raw fish was not too much of a transition, culturally speaking.

Adding to sushi’s popularity is its availability across all income brackets, with restaurants serving maki as low as a dollar a piece and as high as ten dollars a roll for the rarest items.

As Le Sushi Bar’s Haddad puts it: “I think it overflowed the boundaries of the elite; everybody wanted to eat sushi, and this is why a lot of places have mushroomed at all levels and they are all working.  It’s democratized, just like burgers,” he says in answering the question of why sushi is so popular in Lebanon.

Having sushi for a dollar a piece, especially when raw fish is involved, sounds risky to many. However, as Saade puts it, not everyone can afford the high-end variety while everyone wants to enjoy sushi. “People want to eat sushi and those who can’t afford it will go for the cheap option of a dollar per piece,” he says adding that in all cases, consumers’ main concern should be hygeine and cleanliness when it comes to consuming raw fish.

Saade, who is also the treasurer of the Syndicate of Owners of Restaurants, Cafes, Night-clubs & Pastries in Lebanon, says that at the onset of the food safety inspections in restaurants initiated by Minister of Health Wael Abu Faour, along with the Ministry of Health and Boecker and GWR Consulting (two companies specialized in food safety), hard work was put into ensuring that Lebanese sushi restaurants were in line with hygiene standards, organizing food safety and preparation seminars across the country as well as encouraging them to send samples of their fish in for inspection.

Cutting corners

While low cost sushi and maki might not make you ill, there still is often a big difference in the quality and taste between them and the more expensive sushi.

To begin with, restaurants can decrease costs by using lower quality dry ingredients, such as substituting Japanese rice with Egyptian rice, according to Saade, or using Chinese dry goods (such as seaweed or vinegar) which are also cheaper, according to Fady Achkar, co-owner of Mitsu-Ya, a high-end sushi restaurant in Gemmayzeh.

Such lower end restaurants can also use larger quantities of rice, avocado and cucumbers than raw fish, thereby appearing generous but stuffing clients with the cheap items, explains Rebeiz. Another cost cutting technique which some restaurants employ is to use frozen instead of fresh fish, explains Adada.

Achkar, who also supplies major supermarkets in Dubai with packaged sushi, calls sushi made from frozen fish “fast food” and explains that it relies on four main and comparatively cheap fish. “They use crab sticks or imitation crab, mayonnaise, avocado, cucumber, treated tuna which comes in fillets, salmon and frozen shrimp, which people love. But, you have to stick to these four products. There is nothing wrong with it, but it’s different quality and not comparable to authentic sushi,” he says.

All fish are not created equal

Even among those four items, the standards of sushi, and therefore prices, differ according to the quality and cut of the fish. The most important factor when it comes to fish quality is its freshness, according to Haddad of Royal Gourmet, who explains that they receive four shipments (by airplane) of salmon per week with some restaurants buying from them on a daily basis. Salmon wholesale prices range from $13 to $20 per kilogram for a whole fish, depending on the cut and country of origin, and around $25 per kilogram if cut and cleaned by the supplier into fillet chunks.

While the restaurants Executive spoke to all said they use fresh fish, a lot of the fish used in Lebanon, especially tuna and eel, is frozen for cost efficiency, although the taste is sacrificed. “A kilo of fresh tuna is $30 to $40 while you can get it at $20 frozen. It is more cost effective that way for them because the fresh tuna is three to four kilograms while with frozen tuna, one can buy smaller portions and defrost them, which is good because tuna can quickly darken and go bad,” explains Haddad, adding that Royal Gourmet sells only fresh tuna, mainly to high-end sushi restaurants with a high turnover.

The type and cut of fish also varies with different prices for the belly and under belly of the tuna, which are the more expensive parts of the fish since they are fattier and less chewy, explains Saade. He adds that while the Bluefin tuna is the best type quality wise, it is the yellow fin tuna that is most used in sushi restaurants because it is less pricy.

Whether it’s from the low or high-end variety, or whether packed with rice or made up of only slices of raw fish, it seems the sushi craze is in Lebanon to stay, rivaling hummus and tabbouleh as some of Lebanon’s favorite foods.

The post Sushi nation appeared first on Executive Magazine.

Walk into most restaurants serving sushi in Lebanon and you will almost certainly not see a local rolling up your makis. Though the majority of sushi chefs in Lebanon hail from the Philippines, Vietnam or Thailand, there are two or three restaurants that boast Japanese chefs preparing your Japanese meal.

Restaurant owners Executive spoke to all agreed that hiring a Japanese chef for their sushi restaurant is simply too expensive. “In Lebanon, the salary of a non-Japanese chef is around $1,000. If I hire a Japanese chef, whose salary is much higher, how can I compete with the restaurants around me who don’t have Japanese chefs and pay them much less, given that our other expenses are the same? It’s just not cost effective for us,” explains Shogun owner Aref Saade, adding that a Japanese chef would likely find it hard to deal with the way Lebanese eat their sushi all at once mezze style instead of the slow, piece by piece style that Japanese culture is used to.

Moreover, Ramzi Adada, Yabani’s general manager, suggests that Japanese chefs are expensive because the quality of life in their country is so good that they don’t feel pressured to seek employment abroad.

Tsunami co-owner Rita Ekmekjian says that a typical sushi restaurant employs around 10 chefs, so bringing them all from Japan, knowing that the average salary for a Japanese chef is $5,000, is simply not feasible.

Fady Achkar, whose restaurant Mitsu-Ya is one of the only sushi restaurants in Lebanon that employs a Japanese chef, believes it’s an expense worth investing in. “Ok, they are much more expensive, but when people invest $1.5 million to make a sushi restaurant, they should definitely invest in a Japanese chef. At the end of the day, I don’t go to a restaurant to check out the artwork,” he says.

When asked why Lebanese chefs are not employed as head sushi chefs in Lebanon, the answers among restaurant owners varied. Some believe that, perception-wise, Lebanese customers are more confident in the chef’s skills when they see an Asian chef behind the sushi bar rather than a Lebanese, regardless of their rolling skills. 

Others insist that Filipinos, for example, understand fish better than the Lebanese since they live on islands and have many Japanese restaurants in their country.

Restaurant owners interviewed say it would be easier for them to get Lebanese chefs for their sushi outlets as they wouldn’t have to do paper work for them in terms of sponsorship, but for the time being, Asian chefs remain in charge of sushi restaurants.

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Berytus Nutrix Legum, or Beirut as cradle of the law in its Latin expression, has lost all meaning in times such as these, when our national institutions have become decrepit due to the decay of the political culture of the ruling class. As a result, local authorities (municipalities and federations of municipalities) are one of the few remaining legitimate institutions in the country, making it even more crucial, for the future of democracy in Lebanon, to hold the municipal elections in their due phase.

It is in the name of democracy that Beirut Madinati (Beirut My City) has emerged as a political campaign to run in elections for the Municipal Council seats in Beirut. The negligence of past municipal councils in managing local prerogatives and taxpayers’ money has for many people engraved the idea that municipalities have little to no power and that decisional mechanisms strictly lie at a national level. This is simply not true.

The Municipal Act governing the organization of municipalities in Lebanon (Decree-Law 118 dated 1977 and amendments) lists an impressive set of prerogatives. The “Municipal Council shall be in charge, without limitation” of the budget, loans and donations, as well as “planning, improving and expanding the streets, establishing gardens and public places… establishing shops, parks, racing places, playgrounds, toilets, museums, hospitals, dispensaries, shelters, libraries, popular residences, wash houses, sewers, waste drainage and others” and much more in terms of transportation, economic development, education, culture and heritage.

With over 800 million dollars in budget surplus admitted by the present mayor of Beirut in Executive magazine in December 2014, and regardless of the transfers of the problematic Independent Municipal Funds, very little was actually invested in the city’s livability and the well-being of the people.

Committed to responding to the needs and necessities of those living, working, studying and transiting in the capital, Beirut Madinati has presented an alternative to those inefficiently running the city, in order to restore the municipality’s prerogatives. To that end, this political campaign, led by independent and non-partisan citizens and supported by a multitude of experts and specialists, has developed a comprehensive municipal program and vision for the city.

Concretely, this will mean establishing a suitable working relationship with the governor (or mohafez), the actual head of the executive authority in Beirut – a unique configuration unlike the other municipalities in the country. What is considered by many an obstacle to implementing projects in Beirut in fact simply represents the result of a lack of political will in building professional institutional bridges between the different offices that should be cooperating for the benefit of public interest in the capital. If elected, a Beirut Madinati-led Municipal Council would adopt decisions and regulations in line with the current law and legislation, aimed at achieving local human and socio-economic development, all of which do not constitute any grounds for obstructive strategies by the governor who is bound by law to enact the public good.

On the level of economic development, a Municipal Council run by Beirut Madinati elected officials would work on confronting the growing rate of unemployment and urban poverty. In the short term, the Municipal Council would institute a lasting communication channel with inhabitants’ representatives through existing condominium committees and to-be-established neighborhood committees, thereby voicing priorities and specific needs in terms of social and economic development.

In the long run, throughout the six year mandate, improving basic infrastructure in areas such as roads, traffic safety and housing needs, highlighting cultural and natural landmarks (Dalieh for instance), restoring public spaces and green areas, and establishing community centers and public libraries will create jobs in both public and private sectors and stimulate the local economy and cultural enhancement. The municipality will also contribute to reducing the cost of doing business in the capital, especially for young entrepreneurs and start-ups in strategic sectors (tourism, technology, ecology, etc.) through the provision of quasi-free and subsidized working sites. Commercial streets with local shops, merchants, craftsmen and artisans will be supported through urban design planning strategies providing sidewalks, parking spaces and a comprehensive public transportation system that will greatly improve access and mobility to these areas. Fiscal incentives, lawful and possible within existing mechanisms, will also relieve some costs for the private sector entities sharing the municipality’s vision for a sustainable and greener Beirut.

The Beirut Madinati campaign is out to convince the 470,000 Beirut registered voters to upset the power balance at the local level through their vote. By focusing on dealing with the daily problems of the people in the capital through responsible, transparent and participatory means, the campaign aims to purge the realm of local governance from controversial and divisive issues that capture the entire attention and interests of both the March 8 and March 14 political formations and beyond.

It is time for an independent generation of political militants to step up in order to tend to the basic concerns of the citizens that keep being disregarded by those in charge (the waste crisis being the most recent illustration). Beirut Madinati aspires to contribute to the emergence of a new Lebanese breed of respectable and upright policymakers, achieving a better future for the next generations in Beirut and the country.

The post Beirut Madinati appeared first on Executive Magazine.

“Pity the nation that eats a bread it does not harvest,” wrote Gebran Khalil Gebran back in 1934. Lebanon, which today imports up to 80 percent of its food needs (according to a yet to be published report prepared for ESCWA,) is far from harvesting its own bread and is in dire need of redesigning and modernizing its agriculture sector.    

While it is unlikely Lebanon will ever be 100 percent food sufficient (producing enough food items to feed its own people) due to a variety of reasons ranging from its small size to the high cost involved in reaching that level of sufficiency, the potential to be more competitive, closer to food self-sufficiency and less food insecure (see Last Word page 104) is too big to be squandered.

Lebanon has a unique climate and topography compared to the rest of the region, allowing it to accommodate the planting of different produce at different altitudes. While the country has 250,000 hectares of agricultural land, only around 70,000 hectares of it is currently irrigated: the rest is therefore not being maximized to its full potential.

Today agriculture contributes only 5.5 percent to Lebanon’s GDP but even within that percentage, a lot can, and should, be done to maximize its impact on the country and on the livelihoods of the people working within that sector. These workers account for 20 to 30 percent of the population and are generally of a low socioeconomic level, according to Isam Bashour, professor of agriculture at American University of Beirut.

The potential is there but it is being buried under a lack of planning and management. Moreover, there is chaos across the farming industry as a result of a lack of regulation and monitoring of anything, ranging from what and how much pesticide to use to the quality of water used in irrigation, to post-harvest control (see overview page 16). 

Before the sector can develop any further, the farming industry needs regulations to ensure the quality and safety of produce: there should be national guidelines and procedures across all levels of the farming process. More importantly, a ministerial monitoring body needs to be put in place to make sure these regulations are enforced, with consequences if they are not. Those in the agriculture sector, from farmers to wholesalers, need to know that “cutting corners” will not be tolerated anymore and consumers need to be able to trust that locally-grown produce, even if not internationally certified, is still safe to eat.

The sector would also benefit from a long-term strategic plan that would outline its development of more modern methods of farming and a more diverse range of produce, instead of most farmers planting the same crops every year, such as potatoes and apples, which is largely what is happening now. This would also make Lebanese produce more competitive within the export market and improve the livelihood of farmers by bettering the ways in which they currently work. The good news is Lebanon already has a five year plan for the development of the agricultural sector. The Ministry of Agriculture Strategy 2015-2019 report has eight courses of action ranging from sustainable development, to modernizing farming, to getting more youth involved in the sector. If this strategy is implemented to the fullest it could mean a lot of positive changes within the agriculture sector. But with a ministerial allocation of 0.5 percent of the state’s total budget, and with previous experience of government-led initiatives, progress is most likely to be stilted or slow.

The developing and reinforcing of regulations, and the creation of a nationwide strategic plan for the sector, is the role and responsibility of the government through the Ministry of Agriculture. But in Lebanon, the private sector and institutions have always had a role to play in the development of the country and agriculture should be no exception.

Already, educational institutions around the country are involved in applied research projects on the utilization of innovative farming techniques in the country. Within the past five years, there has been a rise in private sector entrepreneurial initiatives within the farming sector, whether through introducing new crop varieties to the country or new products derived from existing produce (see profiles starting page 24) or simply the betterment of the quality of existing produce (see Biomass Q&A page 34). These entrepreneurs have demonstrated the opportunities that exist within the farming sector, developing a local and export market for their produce, and have shown us what can happen when innovation and new ways of thought are applied to this sector. 

Such private sector investments should be highlighted and more of them should be encouraged through incentives. Kafalat should be commended for the work it has done in supporting small and medium enterprises, many of which are within the agricultural sector, but similar loans need to be offered for larger-scale operations if they are to grow to a national level.

In short, the agriculture sector in Lebanon has been neglected for too long. If we want to improve our resources and maximize the very real potential we have right here on our soil then it is time to rethink our approach to the sector and to join the modern farming world.

The post A sector worth saving appeared first on Executive Magazine.

Based on our geography textbooks, Lebanese school students grow up learning that Lebanon has a strong agriculture sector with practically each region excelling at growing a certain type of fresh produce – from the citrus fruits in Sidon and Tyre to the olives in Koura, North Lebanon and South Lebanon to the many crops in Bekaa Valley and Akkar.

Once out of school, however, we see that the reality is not quite so simple or rosy. We learn that agriculture in Lebanon contributes to only 5 percent of growth, and that Lebanon actually imports up to 80 percent of its food needs – this according to a yet to be published report acquired by Executive and prepared for the United Nations Economic and Social Commission for Western Asia (ESCWA) entitled “Strategic Review of Food and Nutrition Security in Lebanon”. This situation does not have to be permanent, though, and Lebanon’s agricultural sector has the potential to be modernized and improved, as demonstrated by some efforts on the level of educational institutions and private sector operators.

While it may have been the land of plenty in the 1960s and 1970s – our parents tell us stories of how Lebanese presidents used to gift our fresh produce of citrus fruits to visiting ambassadors – today the agricultural sector is plagued with many difficulties, from a lack of natural resources to a lack of planning and innovation.

Nothing without water

To begin with, Lebanon is a small country with only 250,000 hectares of agricultural land, the rest being mountainous or rocky land. Rainfall is generally the heaviest for three months of the year and, as a result, rainfed agriculture is limited to that period as well, explains Isam Bashour, professor of agriculture at the American University of Beirut (AUB). Meanwhile, continues Bashour, irrigated land, from lakes and some underground wells, amounts to a mere 70 to 80 thousand hectares of the total agricultural land.

The irrigation system in practice is also problematic, as the Strategic Review outlines: “Lebanon’s irrigation system remains traditional, and comparatively inefficient flood irrigation accounts for more than 70 percent of irrigation activity.”

Indeed, Bashour cites the lack of structured access to water for irrigation as one of the main impediments to development in the agricultural sector. “If the country goes into a program that would improve the availability of water through building dams and such, it would reflect positively on the agricultural sector because that is the limiting factor,” says Bashour.

According to the Strategic Review, Lebanon drafted a National Water Sector Strategy in 2012 which would expand irrigation schemes around the Litani River basin and therefore boost agricultural land in the South and Bekaa Valley, although the plan has yet to be implemented due to political deadlock.

Living on fruit and vegetables

While Lebanon’s climate allows farmers the advantage of growing a variety of produce – one could plant bananas at sea level, apples in the mountains and wheat crops in the Bekaa for example – the limited availability of irrigated land causes farmers to go for the produce that they can sell at the highest price while using the least amount of water which, in this case, is fruit and vegetables. “In terms of agriculture in Lebanon, we have mainly fruit trees and vegetables; forget about grains and wheat, we produce less than 10 percent of our needs from those and that’s it. Irrigated land will go to vegetables as farmers make more money from them than they would on wheat and barley, and they need less water,” says Bashour.

Lack of Planning

Fruit and vegetables are all well and good, but lack of planning and coordination at the ministerial level leads to farmers planting the same thing at the same time which causes a surplus. “Planting needs planning on what to grow, where to grow it and what to import, depending on what is fresh in the country at the time in order to protect what we produce. But no one is doing this and the same areas are planting the same products at the same time. This is a huge job but it should be done and the farmers alone don’t know what to do,” says Wael Lazkani, owner and chef of the restaurant Jai – who is an example of restaurant owners that, out of personal initiative, work with local farmers to supply their restaurants. Lazkani explains how he is working with some farmers to use their surplus of certain fruits and vegetables to develop innovative food products. These products, says Lazkani, would have novelty as a competitive advantage, giving the example of his recent work with a farmer to make cider out of his surplus of apples, in addition to the traditional apple jams and juices which the farmer used to make, and his idea to use tomatoes to make chutney in addition to the traditional tomato pastes.

Jungle market

Within the agricultural sector, a mixture of a lack of regulations and weak implementation of existing ones has led to a chaotic market with no certifiable or measurable quality assurance standards to reassure consumers – whether locally or in export markets – of the safety of the food they are eating.

The Strategic Review prepared for ESCWA points to regulations being applied by the Ministry of Agriculture (MoA) on the importation of pesticides and fertilizers and on imported seeds (including certificates of origin and import permits), but generally sees government imposed and created regulations as currently being weak and ineffective.

Mario Massoud, executive manager of Biomass – a Lebanese producer and distributor of organic fruits and vegetables – explains that Biomass had to get their organic farming certification from an Italian certification body with offices in Lebanon, Instituto Medditerraneo di Certificazione (IMC), as there are no government or local certifying bodies for organic produce (see Q&A page 34). Indeed, the IMC has certified all of the organic products produced in Lebanon in line with European Union regulations.

Liban Fruits, which is ISO 2200 (an international food safety management system certification) certified, speaks of the difficulty it faces in convincing local farmers to grow their products in accordance with the ISO 2200. The obstacle, explains owner Elie Maalouf, lies in the chaotic market which leads to farmers refusing to spend the 10 percent extra money it takes to grow the ISO certified way, while their fellow farmers are growing in a haphazard manner – such as using any fertilizers to increase yields or using unsanitary water for irrigation – thereby spending less money but with both of them selling their produce at the same price.

“Today half the vegetables in Lebanon have no taste; this is because there is no regulation or monitoring. Farmers are looking for profitability and are trying to develop big yields at the price of the taste,” says Maalouf, who adds that the solution is to have regulations and monitoring, at the ministerial level, ranging from what pesticides should be used (and in what quantity) to the quality of water used. “When this happens, the quality of the product will improve and prices will be more leveled,” explains Maalouf.

Greg Demarque | Executive

Post-harvest woes

Both Bashour and Gumataw Kifle Abebe, visiting professor of agriculture at AUB, mention post-harvest as another challenge affecting the agriculture sector in Lebanon, leading to unnecessary waste and loss.

“Most of the pre-harvest practices are predictable and relatively easier to manage. In contrast, post-harvest management is more complex as it involves a number of actors at the different stages of the supply chain, with each actor likely to have a varied level of risks and rewards. Post-harvest losses vary depending on product handling, storage and treatment conditions as well as the production region,” says Abebe.

Food for everyone

It is clear that the agricultural sector in Lebanon is aging. As the Strategic Review outlines: “Despite its favorable climatic position in the region, agriculture’s value added in percent of GDP has declined to an estimated 5.5 percent in 2014. This decrease can be attributed to patterns of mass urbanization which already began in the 1950s and 1960s. Back then rural populations constituted around half of Lebanon’s population. Another reason for this retrenchment is likely that public investment targeting the sector’s development remains relatively low, something evident in the share of the budget allocated to the MoA,” which – at 0.5 percent of the total budget – is five times less than neighboring countries.

Despite its low contribution, many believe this 5.5 percent of Gross Domestic Product (GDP) should be maximized to its full potential, if only to be more food sufficient (producing enough food for local consumption) than we are now – not to mention having a competitive edge in export markets. “25 to 30 percent of the people live off of agriculture, plus it’s creating a lot of business. I always give the example of California where their agriculture is very advanced but they produce only 2.8 percent of their GDP; do they stop producing? They keep supporting it because if you kill agriculture, you kill your economy and then you become 100 percent dependent for your food on other sources,” argues Bashour.

Indeed, on aggregate, Lebanon is only self-sufficient when it comes to fruit (147 percent) and almost self-sufficient when it comes to vegetables (93 percent), according to the Strategic Review. However, it imports up to 80 percent of its remaining food needs.

In terms of export, fruit and vegetables constitute the majority of agricultural exports from Lebanon – potatoes being the largest export crop with a 55 percent share of vegetable exports – although export volumes remain low when compared to production and import numbers.

While Lebanon’s size does not allow it to be fully food-sufficient, it could be producing a wider variety of produce and be more competitive than it is now, as the Strategic Review notes.

Back to the future

The essence of what is needed to revitalize this sector, and be competitive with our neighbors, is applied research and development of modern ways of farming, says Bashour. “We have to come up with new ideas and grow different things; we cannot grow what Egypt or Jordan are growing at the same time as them. We have to be ahead of everyone around us somehow by learning more, by applying new technology and by being smarter in production and post-production,” says Bashour.

Farmers should not be expected to do this research on their own, and as such Bashour says it’s the job of the government with the collaboration and input of civil society and educational institutions to do so.

Greg Demarque | Executive

He stresses that research alone is not enough and that outreach, through training and workshops for farmers, is key. “We have to transfer this information to the farmer. Some money is being spent on research but it’s not enough. We need more money and effort for the research and much more on relaying this to the farmer,” emphasizes Bashour. He goes on to explain that the MoA does have outreach offices in farming areas, and has been hiring people – several from AUB – to work with them on outreach, but that more could be done to make it more effective and far reaching, noting that real change will be slow.

Relatively recently, a crop of agricultural entrepreneurs (see profiles starting page 24) have seen the potential in Lebanon’s land, and started working with local farmers on introducing fresh produce or food products which are innovative and unusual to Lebanon, demonstrating the potential Lebanon has for similar projects with the proper research and training of farmers.

Time to connect

Lazkani speaks of a disconnect between the small farmers and end consumers (be it restaurant owners or people in their homes) noting that such communication is necessary to allow small farmers more contact with local market needs, and therefore potentially be able to provide more competitive produce.

Farmers markets, such as Souk el Tayeb or Souk el Ard, are ideal for small farmers or agricultural entrepreneurs testing out the market for new produce, says Lazkani, who visits every week to see what’s new for his restaurant.

Massoud’s Biomass says they started out in Souk el Tayeb, introducing their line of organic fruit and vegetables and getting feedback directly from the consumer. Biomass outgrew Souk el Tayeb, but Massoud believes in it as a platform for small farmers while saying that, in Lebanon, supermarkets are the main places where people purchase food.

Lazkani also admits that chain supermarkets have taken over the way people purchase food all over the world, but takes heart in the relatively recent global trend towards going back to buying local and reducing the size of their carbon footprints.

He has seen this trend slowly take root in Lebanon with more people visiting Souk el Tayeb than when it first started, and as such believes that more farmers’ markets spreading across Lebanon could be beneficial to the country’s farming community.

Going forward

According to the Strategic Review, Lebanon has developed a plan called The Ministry of Agriculture Strategy 2015-2019, with eight courses of action which, if implemented, could go a long way toward improving the agricultural sector in Lebanon.

The agricultural industry has too much potential to be left without attention. “We have many basic points in agriculture that limit us, such as irrigation or limited land availability. But with new technology and the right education and research, these resources can be utilized in a much smarter way,” concludes Bashour. For Lebanon’s sake, let’s hope we do.

The post Lebanon: land of plenty? appeared first on Executive Magazine.

Rooted in a 2007 project to grow organic fruits and vegetables at the Massoud family farm in Batroun, North Lebanon, for their own consumption and distribution to relatives and friends, Biomass has since become one of Lebanon’s biggest producers and distributors of organic products.

Soon after establishing the company, the Massouds found that their farm was too small to meet market needs for more volume and a wider variety of produce. To remedy this, they established collaborations and partnerships with over 40 organic certified farms in Lebanon whereby they supply these farmers with raw material, such as organic seedlings, depending on the particular agreement with each farmer, in exchange for produce.

Today, Biomass covers the entire chain of operation: farming, packaging, sorting, production and distribution in retail spaces. They have four lines of products – fresh produce, fresh eggs, dry grocery goods and frozen goods – with 95 percent of their items produced in Lebanon and the remaining five percent of goods, such as cocoa, quinoa and organic frozen chicken breasts, imported from abroad.

Having been credited with promoting the organic sub-sector in Lebanon, where fresh organic produce now has its own shelf space in supermarkets, Executive sat down with the executive manager of Biomass, Mario Massoud, to understand how their business model works and how organic farming can help the development of the agricultural sector in Lebanon as a whole.

Mario Massoud (Photo: Greg Demarque | Executive)

E   Organic produce, largely due to its higher price when compared with conventionally farmed produce, is still somewhat niche in Lebanon. What drives the price up?

Today there are two main factors which affect the price of organic produce. The first is that the yield at the farm level is relatively low, which is normal for organic but can be improved through modern farming techniques which we should be applying. The scale of the farms is another issue. Today most of the 40 plus farms we work with are small scale farms, from 1,000 to 10,000 square meters, so you don’t have big operators at the farming level operating organic farms. Also, most of the farms are multi-crop farms which reduces the risk of losing one’s entire harvest, but at the same time drives the costs a bit higher. This affects the volume of crops produced, while the more volume is generated, the less costly the product will be.

E   What is your target for closing the price gap?

Today, depending on the season and the crop, the gap varies between 50 to 300 percent price-wise. Ideally, we would like to have a gap ranging between 30 to 70 percent.

E   Are you trying to add more farms to your portfolio?

We are adding three to five farms each year, and many of these farms are bigger in terms of farmed land. But when organic farming was launched in Lebanon, it was introduced to the very small farms so that they could generate value in their farms when competing with the bigger farms.

E   Quality wise, how big is the gap between an organic operation  and conventional Lebanese agriculture? Is there a prevalence of Genetically Modified Organisms (GMO) products used by Lebanese farmers?

I don’t know what conventional operators use and do. In my opinion, conventional farming should be more controlled, and you have different systems for conventional farming that should be used in Lebanon which allow for the use of chemicals and pesticides but in safer ways.

E   How much has the overall market for organic foods developed in terms of total market share?

I don’t have market share but I estimate it to be roughly five per million. I don’t believe that we are in the 1 percent level yet.

E   Can you specify the growth rates here at Biomass?

We’ve been growing at an average annual rate of 30 to 40 percent, which is especially interesting since there is a growing awareness of the benefits of organic produce among consumers. We’re actually producing less than what the market is demanding for organic products.

E   On the margin side, for the farmer, how much can they expect in terms of percentage of the retail price?

It depends on the crop and the season. Today, we buy from the farmers at 50 to 300 percent more than they would sell in conventional farming produce.

E   When you compare that to the cost the farmer has in raising the crop, how high is the cost of entry?

If you have virgin land, which has not been conventionally farmed before, the cost of entry is relatively low. There are no pesticides which means you don’t spend on costly pesticides, so effectively it’s cheaper since the farmer doesn’t pay that much to enter. But since the yield generated is lower, it drives the cost up and the farmer also has to pay for the annual certification fee.

E   Within the distribution chain, there is the component of transportation and storage where you wonder how hygienic they are, especially when you hear all the stories…

Our products are tested when we take them from the farmers and again when the product is sent to the supermarkets. We operate the entire chain.

E   How much did you invest in all this?

The investment is quite big and until today not profitable. Our objective as a company is to grow the organic sector in Lebanon for companies like us to have a space in the food sector and be sustainable and profitable.

E   So how do you balance your financing?

Until today we have raised several rounds of capital to finance the company and have just completed our second round of capital increase. We are also hoping to increase the volume at the production and export level to generate enough volume for us to reach profitability.

E   Where does the increase in capital come from?

From investors. So far we haven’t had any fund related to the company, though we have looked into [private equity] and venture capital funds. But the capital was mainly from private Lebanese and foreign investors who believe in the organic sector. We tell our investors that it is a long term project whereby we are creating an industry in Lebanon that was virtually nonexistent seven years ago.

E   What is the growth potential of the market?

Back in 2010 when we started we were present at not more than 20 stores. Today, we are present in 250 outlets divided between supermarkets, dedicated organic shops, delicatessens, small groceries, hotels and restaurants.

E   How much of the share is specialized restaurants and hotels?

It’s not big; they’re 5 percent of the total market but they are growing. It is expensive to have all organic items in the kitchen, so what we are trying to do is create one dish in the kitchen that is organic or use a small number of ingredients; whatever is most feasible for the kitchen operator.

E   In terms of your exports, what are your current rations and potentials?

In 2015 we exported 60 percent of our supply in value to the Gulf. We try to export to new countries, and exported once to France, but mainly focus on the Gulf. Export is a real issue with the Syrian crisis because of the extra rush on all the air freight cargo space making it difficult to find the space to export. We need this space because our products are fresh and so exporting is quite a challenge.

E   From your perspective, how much of a role could the organic sector play in Lebanon by the year 2020?

We hope to get 3 to 4 percent of the market share, which is six times the growth of my current estimate. I believe there is a lot of room for growth in the organic sector in Lebanon. For the past five years, our role as Biomass was to introduce an organic produce sector to Lebanon and now we are moving on to the next step which is to make it more accessible.

E   At the level of integrated operators that have both farming and distribution, do you have competitors?

We have competitors although we don’t really believe we’re competing since the market is growing and there is enough space for everyone there. There’s a lot of collaboration between these operators, but you have companies other than Biomass producing organic.

E   Over 80 percent of cereals consumed in Lebanon are imported. On an overall agricultural level is there food security?

I think Lebanon can increase the contribution agriculture makes to the overall economy. There is a role for the government, which needs to make farms more modern and in line with international best practices and techniques, such as the use of pest control. I think it will result in a good economic model in addition to serving the Lebanese people’s interests.

E   Are you exploiting yourself? Meaning the opportunity cost of how much more you would have made had you considered a career other than the executive officer of Biomass?

I never thought that I would be in this role, but now I really believe in it and love it. It’s a new challenge for everyone on the team because there’s no organic expertise in Lebanon so we’ve created through trial and error and are learning from our own mistakes. It’s also a challenge for all of us to succeed in what we are doing now and that’s the exciting part. So, am I exploiting myself? Yes, I am.

The post Growing an organic Lebanon appeared first on Executive Magazine.

I’m confused. Every time we write about the country’s entrepreneurship ecosystem, our researchers and fact checkers conduct extensive investigations in an attempt to once and for all classify central bank circular 331 in the right policy framework. They always come to the same conclusion: it’s an equity guarantee. The whole purpose of this policy instrument is to mitigate the high risk of the “valley of death” or when there is a high probability that a startup firm will die off before a steady stream of revenues is established.

With all due respect, the handful of venture capital (VC) funds currently deploying guaranteed capital are not serving that purpose. They’re thirsty for revenues such as private equity (PE) funds, not value creation such as VCs. They’re all looking at ticket sizes of $1 million or more in companies that are past the proof-of-concept stage and starting to see some real cashflows. These aren’t seed tickets and definitely don’t need a guarantee. Don’t get me wrong, growth-stage companies in Lebanon were startups back when the ecosystem was smaller, functioning with little institutional support and starving for capital. They are more than worthy of investment but in a manner that allows limited partners (LP)’s or shareholders to enjoy the risk and rewards that come with financing a limited liability company (LLC).

No wonder funds are complaining of lack of deals. But what about the young companies that have graduated from Bootcamp, Speed and the UK-Lebanon Tech Hub? This equity guarantee is for them. It’s meant to help them and many, many others that are still not even aware that 331 exists to help them make it to the other side of the “valley of death” so they too can one day welcome the big tickets and stay in Lebanon instead of looking elsewhere.

For seed funding to start finding the right targets we need many more accelerators, co-working spaces and marketing tactics to discover and nourish all the remaining scattered talent. There are many excellent opportunities that are equally tech and scalable; in this issue, for example, we bring to you a selection of entrepreneurs in the agro sector.

Banks and investors that make the leap of faith to support accelerators should have the first right of refusal to invest in graduates of these programs and not the other way around. Only those investments are worthy of an equity guarantee.

As 331 money gets allocated quickly, it is not too late to reconsider the structure and rewards of existing funds with special attention to carried interest arrangements. The time is now to give our only working policy its rightful purpose. Let’s reprioritise our goals so that everyone can benefit from a just share in the pie.

The post Enough brand confusion appeared first on Executive Magazine.

Entrepreneurship in Lebanon is typically associated with technology – generally app development or a high tech startup – but is rarely associated with farming and agriculture. Yet, within the agriculture sector, there is a rising number of business people who deserve to be labelled as entrepreneurs. They are introducing new and unusual food products to the Lebanese food market, bringing innovation to the sector and broadening the range of foods typically produced domestically. From unique food products made from fresh local fruit or vegetables, to introducing new vegetable varieties to the country, to raising different types of livestock for the production of new delicacies, each of these entrepreneurs has contributed to some extent to the betterment of the livelihood of farmers within their community and have demonstrated ideas that could go national with some extra backing.

La Ferme St Jacques: Lebanese produced luxury French cuisine

La Ferme St Jacques produces 22,000 ducklings per year

Foie gras, the creamy food product made from the liver of specially fattened ducks, is mired in controversy, with many shunning it because of its links to animal cruelty (it generally involves force feeding a duck or goose to fatten its liver) and yet others still love its taste and associate it with images of Parisian bistros or the French countryside. Globally, 20,000 tons of foie gras are produced per year with France producing 70 percent and consuming 85 percent of that total.

It is for these reasons that it is surprising to learn that La Ferme St Jacques (LFSJ) has been producing this typically French delicacy, along with a line of 42 other duck products, right here in Batroun, Lebanon, since the year 2000.

As LFSJ’s Marketing and Communications Manager Maria Chedid recounts, the Younes family, the company’s founders, thought of the project because they wanted to contribute to the development of the district of Batroun – by potentially creating job opportunities that would keep people in the area instead of them migrating to Beirut, which was the case prior to their venture. Today 80 percent of LFSJ’s 35 employees are from the Batroun are. They consist of workers on the facility itself and some working on marketing, sales and distribution.

The Youneses established La Ferme St Jacques, investing $500,000, secured through personal funds and a loan from Kafalat, into the machinery, hangars and ducks. Chedid says the Youneses built the duck farm and facilities from scratch on land they rented close to the Monastery of St. Jacques, hence their name. As the facility developed, investors joined the Younes family and today there are five shareholders: Ziad Younes, Jihane Feghali, Philippe Grondier, Joe Nasnas and Dory Younes.

Originally, all the ducklings were imported from France with the production of the duck delicacies taking place in Lebanon. Following the July War in 2006, which prevented the company from importing ducklings that summer, they now only import fully mature ducks from France twice a year for mating – as the duck variety common to Lebanon is not suitable for food production, according to Chedid – and the ducklings are then bred and processed in Lebanon. La Ferme St Jacques produces 22,000 ducklings per year with an annual turnover of $1,500,000.

LFSJ covers all parts of the operation, from the breeding of the ducks to the processing, packaging and distribution. Producing 240 kilograms of duck liver a week, the farm started with only this delicacy but has since diversified its line to include 42 products ranging from raw duck fillet to processed duck breast stuffed with duck liver and tins of duck pate.

LFSJ’s competitive edge over the imported, industrially produced French duck products is in the lower price and the artisanal manner in which they work. The ducks at LFSJ are bred according to free range principles and the food products are produced by hand; this, according to Chedid, leads to a better taste than industrially made foie gras. La Ferme St Jacques’s products also have a 30 percent lower selling price than the imported variety.

Aside from their specialized retail store on Rue Du Liban, Achrafieh, La Ferme St Jacques is distributed locally in the hospitality and retail sector. Chedid says the hospitality sector is a stronger market for them locally: “The hospitality sector is stronger because duck is not a part of Lebanese food culture and traditions, and therefore is not bought much from the supermarket, although over the past two years there’s been increased interest in duck products.”

She attributes this increase to the marketing they have been doing as a company, namely through digital and traditional advertising, participation in local food exhibitions, workshops and trainings for chefs on how to use their products.

Regionally, LFSJ has been distributing to Dubai, Qatar, Bahrain, Saudi Arabia, Kuwait and Jordan since 2004 and can be found in most of the Carrefour stores in the Middle East. They are also present in the hospitality sector regionally, with the percentage of hospitality to retail sales depending on the distributor in each country.

Chedid lists being alone in this industry in the region as one of their main challenges. “We are pioneers in this in the Middle East and it is a challenge because we are introducing people to this new variety of duck products.”

Lebanese Treasures Land: From snail slime to gold

Most snails are exported to Italy with less than 1 percent staying in Lebanon

A snail doesn’t seem that powerful as it glides along. But Naufal Daou, general manager of Lebanese Treasures Land (LTL), sees in it the potential to revitalize the Lebanese economy in a similar fashion to what the silkworm did for Mount Lebanon back in the days of the 17th century ruler Emir Fakhreddine.

A year prior to the postponed 2013 parliamentary elections Daou, who was planning to run as a Member of Parliament and who has a background in media, studied several investment projects that would have a social and economic development angle – which he could include on his electoral program – and could generate jobs in rural areas, keeping people on their land and in their homes, thereby lessening the effects of centralization.

In order for the selected project, out of the several proposed ones, to provide real added value, Daou first wanted it to be innovative – so as to not compete in a market already saturated with products like olive oil or apples and not create wasted surplus. Secondly, he wanted to have a readily available market beyond the confinements of a relatively small country like Lebanon.

The choice fell on snail farming thanks both to its compliance with Daou’s criteria and to the added advantage of being easy to produce and even easier to store for up to a year; an advantage when and if export routes close down. Heliculture, or scientific snail farming, is on the rise, according to Daou, with 500,000 tons of snails sold globally last year at an average of 4.5 euros per kilogram, with the number of snails sold expected to multiply by five within the next ten years. Aside from being consumed as a food product in Ghana, Cambodia and many parts of Europe, especially France (escargot anyone?), the slime that snails produce is used in cosmetics and skin treatments globally.

Despite the elections ultimately being canceled, Daou decided to go through with the project as a private sector venture and contacted the International Snail Farming Institute (ISFI) and Euro Helix, both Italian companies specialized in snail farming. In 2014, with an initial investment of $500,000 – spent on trips to Italy for training and introduction purposes, setting up offices here and on establishing the training center for office staff and future farmers – which he says he secured through personal funds, Daou established Lebanese Treasures Land, which would be the Lebanese and Middle Eastern agent of snail farming for both the Italian companies.

Based on the terms of the agreement, the ISFI and Euro Helix would provide LTL with the techniques and basic equipment and would guarantee the purchase of the entire production from the Lebanese farmers, so long as they meet internationally set criteria.

For the Italians, explains Daou, sourcing even a small percentage of their snail production to Lebanon, when it comes to wholesale purposes, is economically efficient as labor is cheaper here than in many parts of Europe. The Lebanese climate is also ideal for the particular snail variety which is the most widely sold wholesale – about 85 percent of the volume of traded snails – the aspersa müller.

The LTL’s central office has thirteen people working on the team, divided between agricultural engineers, marketing, logistics and management. Being an agent or representative, LTL does not have a snail farm under its name, but currently works with 18 farms which are located mainly in the Bekaa, where agricultural land is plentiful, with a recent addition of farmers in Zgharta and Enfeh, north Lebanon. Daou estimates that the 18 farms they currently work with employ around 50 farmers all in all, but says they are adding more farms now that people are hearing about them – mainly via word of mouth, but also through the workshops they host in educational institutions, agricultural NGOs and local municipalities.

In exchange for a comprehensive list of services, LTL takes an annual fee of 10 percent of the final production. “What we do is we give the farmers the know-how and training. We also supervise and monitor the farms through visits every 15 days. We organize shipments and often compile snails from different farms into one shipment to cut down costs for the farmers. We also help them secure loans from loan guarantor Kafalat and the banks by preparing their feasibility studies,” explains Daou, who says Kafalat has given loans to 12 of the farms under LTL so far.

A total of 200,000 sqm of land is currently dedicated to snail farming in Lebanon and Daou says that each 1,000 sqm translates into a ton of snails per year, which are sold wholesale at $4.5 to $5.6 per kilogram. Daou believes snail farming has huge potential in Lebanon and says that an added advantage is that a 10,000 sqm snail farm needs only one person to maintain it, so the project has the potential to be a family run business. He outlines the process of snail farming as planting the appropriate vegetation for the snails to feed on, setting a reproducer snail free to roam on the land to reproduce, monitoring them and then harvesting them when mature and finally storing them in a well-ventilated place.

Daou places the initial investment for a 10,000 sqm farm at $70,000 for the vegetation, fertilizer, reproducer snail, the nets, snail pen and other material needed, and says that it generates a profit of $25,000 per year for the farmer.

Currently the Lebanese produced snails under LTL are exclusively exported to Italy, a very small percentage (less than 1 percent) are informally distributed by farmers, at the individual level, to restaurants in Lebanon. Daou says they are working on developing a Lebanese market for their producers under a common brand name which will be found in supermarkets, farmers’ markets and the hospitality sector. “We are currently researching international best practices of doing so because in this way part of our produce could be sold in Lebanon, which could open the market for smaller scale producers who don’t want to export,” explains Daou.

Daou, who has yet to return his initial investment in the project (he estimates he will return it within the next two years) says growth is slow. “It will happen but it will be slow, especially since it is an individual and private sector effort and not a national level one,” he says, explaining that while the Ministry of Agriculture has been helpful in facilitating and providing the necessary paperwork needed for export to European Union countries, it couldn’t support snail farming financially as their budget is too small.

Despite the slow pace, Daou continues to believe in and work for the potential of snail farming to the agriculture sector in Lebanon, and to the Lebanese economy as a whole, one snail at a time.

Franje mushrooms: room for fresh fungi?

Five other “main growers” have entered the market since Hobeika first began his business

It all started six years ago when, on a business trip to a fashion retail exhibition in Milan, George Hobeika came across a workshop on mushroom growing and attended largely out of curiosity.

Despite his main business being fashion – Hobeika has been operating a fashion brand outlet store called Solderie Des Marques in Lebanon since 1996 – the workshop intrigued him enough for him to conduct an informal feasibility study to evaluate the project’s potential in the local market. “I found that there was a high demand in the market for fresh mushrooms, most of which were being imported from the Netherlands with a small percentage coming from Syria,” says Hobeika. He adds that, while there were existing businesses producing mushrooms in Lebanon, he didn’t think they were well developed and he therefore felt that he’d be able to significantly contribute to the market.

With an initial investment of $1.5 million secured through a loan from Kafalat Plus from Kafalat – the Lebanese financial company which provides guarantees for loans to small and medium enterprises – and private investors, Hobeika and his brother Elie established Franje, Agriculture Trading Company sal, in 2011.

They brought the equipment and materials needed from the Netherlands and hired Dutch consultants to work with them for two years, helping them launch the project and set it on the right track. They also signed a joint venture with the Mushroom Office in the Netherlands through which their mushrooms were certified as meeting quality control criteria such as not using fungicides.   

Substantial investment in materials and equipment aside, Hobeika, who took a year and a half long online course on mushroom growing which culminated in exams that he sat for in the Netherlands, stresses that the most important aspect of this venture is the grower’s expertise. “It’s not enough to have a lot of money to invest in the project’s initiation, you have to invest it in the right grower. This is because the quality of mushrooms depends on the skill and dedication of those who grow them. It’s that simple but it’s also that complicated,” he explains, adding that mushroom growing requires patience and precision.

Not magical, but still delicious

Today, Franje employs 15 people full time and has eight 18 sqm mushroom production rooms yielding an average of 30 tons of mushrooms per month. Ninety percent of the production is white button mushrooms, which Hobeika explains are the most affordable for consumers and the most in demand in Lebanon. Hobeika also produces oyster mushrooms and portobello mushrooms, which are mainly sold to French and Italian restaurants. More recently, he introduced shiitake mushrooms to Franje’s portfolio, with Japanese restaurants being his main clients.

Franje mushrooms are distributed in supermarkets, grocery stores, restaurants and hotels with the percentage share of hospitality venues versus retail markets depending on the season, according to Hobeika, who gives an example of retail being more active in the winter when at-home celebrations abound versus hospitality grabbing the larger percentage share in the summer with the wedding and tourism season. 

Five years into this venture Hobeika says he has yet to return his initial investment, explaining that the mushroom business is difficult and growth is slow. At the same time, Hobeika says other operators have entered the market, identifying five as “main growers”. Among them, they have almost saturated the local market needs, and are driving the selling price down. “It is not highly profitable anymore as the selling price of mushrooms has become low and they have a short shelf life of five days maximum. So you end up having to decrease your price to be able to sell your growth, especially since the market is saturated, and you end up hurting the other growers as well,” laments Hobeika, who says that when they first began operating, they were “much more comfortable” as they were almost alone in the market.

According to Hobeika, the Ministry of Agriculture helped form an association of mushroom growers in Lebanon around three years ago, although it did not take off and was later abandoned. “It would have helped us be more organized in terms of unifying the price of mushrooms, and also in applying to and receiving grants from international institutions,” says Hobeika.

Operational costs are also high, with the biggest expenditure being the cost of energy necessary to keep the rooms at the right humidity and temperature level. According to Hobeika, the cost of the compost used, which needs to be imported, is also quite hefty.

Despite these obstacles, Hobeika says he is not discouraged, explaining that since the market in Lebanon is small, they began exporting to Kuwait and Dubai in 2014. He plans to add two more rooms to his business within the next two months with the aim of increasing exports to the Gulf, which he calls a “steady and consistent” market.

Adonis Valley: the road from organic fresh produce to organic food products

25 tons of tomatoes can be turned into three tons of organic sun-dried tomatoes

Adonis Valley, a producer of organic food products (certified organic by the Italian Certification Body, the IMC) was conceived out of Fady Daw’s passion for natural production and agriculture. 

Although his family’s business is in advertising, Daw paved his own path early on by majoring in agricultural engineering with a focus on food processing. He joined the non-governmental organization Green Line, which works to preserve nature, and began working on promoting the organic market in Lebanon as early as 1998 when the term was still uncommon to Lebanese consumers. 

In 2000, Daw, who was initially producing honey, also started growing organic fruits and vegetables alongside the honey. Soon after, he began experimenting with the surplus of his fresh produce and started making organic long term shelf products such as tomato paste and jams, although his operation was small scale and unbranded.

At the same time, Daw started experimenting with innovative food products that were uncommon in Lebanon, and that he could produce using organic products. “The idea for sun-dried tomatoes came in 2005 after I had developed my tomato paste, ketchup and tomato sauce, but all these were traditional items and I wanted to complete the tomato range with something more creative and unconventional. I discovered that in Lebanon we import sun-dried tomatoes from Italy, and I thought that I could easily produce them here, knowing that the kind of tomatoes I use for the paste works very well for sun-dried tomatoes,” recounts Daw.

In 2006, Daw decided it was high time to make his venture branded and official; he received a bank loan and relied on private funds to secure an initial investment of “at least $120,000” to establish Adonis Valley in Fatri, Adonis, in the Mount Lebanon region.

Today, in addition to the traditional organic food products line, Adonis Valley is the only producer of organic sun-dried tomatoes in Lebanon and Daw proudly boasts that some highly reputable chefs in Lebanon favor Adonis Valley products over the imported variety. He explains that his sun-dried tomatoes’ competitive edge is that they are softer and less chewy than the imported ones and so can be consumed on the spot instead of having to be softened in water first.

Another positive factor, according to Daw, is that although the imported and local varieties are sold for almost the same price of $11 per kilogram, his are more cost efficient since he doesn’t soak them in oil, which takes up weight and volume that could otherwise be fitted with more tomatoes.

Today, sun-dried tomatoes constitute 30 percent of Adonis Valley’s total sales. Daw says they have an annual harvest of almost 25 tons of tomatoes which they dry into three tons of organic sun-dried tomatoes. Although the operation started in the Adonis Valley farm in Fatri in 2006, it quickly outgrew its space and in 2008 Daw moved production and the growing of all the tomatoes to the northeastern Lebanese border town of Arsal (Packaging still takes place in Fatri). Other reasons cited by Daw for the move include that Fatri does not get enough sun and labor is more expensive there.

Adonis Valley is based in Fatri, Adonis

Daw calls the business model he follows in Arsal a fair trade one. As a first step, he contracted a farmer called Mahmood, organically certified his land, provided him with the proper organic tomato seedling variety, the right techniques to grow them and guaranteed that he would buy his entire produce at harvest time in return for an agreed upon sum. Daw argues that this process saves the farmer from the uncertainty of whether his conventionally planted crop will be sold or not and the hassle of having to display them in the fruit and vegetable market. Then, he approached a women’s collective where he trained 14 women on the modern techniques of drying tomatoes. Packaging is still done in Fatri.

Daw replicated this model in 2008 with his caper growing and production line, sourcing it to growers and a women’s cooperative in Hermel, and, more recently, around three years ago, with his freekeh (green wheat) production line which he sources in Bint Jbeil, south Lebanon. “This is my [corporate social responsibility] as I am contributing to the development of businesses in rural areas,” says Daw proudly.

In addition to the sourced employees and contractual seasonal ones, which Daw says are “many”, Adonis Valley has four permanent staff members working on management and marketing and an extra five employees who help with the packaging during the summer. 

Adonis Valley’s sun-dried tomatoes are distributed to both the retail and hospitality sector in Lebanon with 60 percent of products being sold to the hospitality sector and the remaining percentage to organic and healthy lifestyle stores across the country. Part of the production is also exported to Dubai and Kuwait. 

Daw is also currently working on the construction of the first certified green building and farm on his land in Fatri and is investing a total of $150,000 into the project which he hopes to launch this summer.

Good Earth Produce: innovation in local production of fruit and vegetables

Good Earth Produce grows 75,000 kilograms of endives per week

When you have built a career around distributing locally grown and imported fruit and vegetables, it seems only natural that you would reach a point where you start considering the possibility of growing some of these imported varieties in your homeland.

Elie Maalouf’s history with fruit and vegetables began over forty years ago with his company Liban Fruits, a wholesale distributor of ISO 2200 certified imported and locally grown fresh fruit and vegetables exclusively sold at wholesale fruit and vegetable markets. In 2000 he launched a distribution company which sold produce to hotels, restaurants and some main retail chains to be able to provide smaller quantities and have more targeted distribution.

Ten years ago, recounts Maalouf, the demand for mushrooms and endives was very high in Lebanon, owing to the wide variety of Italian, and to a lesser extent, French restaurants. This demand, especially for mushrooms, gradually spread from the hospitality sector to consumers’ households.

At the time, all the mushrooms and endives on the market were imported from the Netherlands and France and were quite expensive so Maalouf, together with his son Marc, saw potential. “The demand was high and so was the cost of export, so their selling price was high as well. We saw the opportunity to begin growing them in Lebanon and started the Good Earth Produce in 2011 to grow different varieties and colors of mushrooms and endives,” says Maalouf.

Other than saving on the cost of importing these items, which is a crucial factor, Maalouf believes the locally produced variety tastes better because the products are picked daily and delivered the same day, as opposed to the imported variety which takes up to 48 hours to arrive by air freight.

The Maaloufs invested $1.2 million into securing the necessary equipment and the raw materials for mushroom production and the services of a consultant from a Netherlands based company who remains in daily contact with the production team. They consider the growing of endives to be part of this investment, as endives and mushrooms are basically grown in the same manner – in stacks in rooms with digitally controlled humidity, the only difference being that endives are grown in the dark to prevent chlorophyll from turning it green – and so need the same major equipment such as generators and electronic humidifiers.   

Good Earth Produce has six 700 sqm rooms for mushroom production, which currently produce 30 tons of mushrooms per month, with that number increasing during times of peak consumer demand such as the holy month of Ramadan. “We have the capacity to produce two tons per day but we don’t do so because there is no high demand currently. When you work with fresh produce, you have 24 hours to sell to retailers and the hospitality sector because fresh items have a short shelf life and they might already be staying with them for two days until they get sold or used,” explains Maalouf.

Fresh mushrooms seem popular among Lebanese consumers, with even neighborhood grocery stores selling them, and Maalouf says the market penetration of locally produced fresh mushrooms is around 90 percent (versus imported mushrooms) with around six main mushroom farms growing them in Lebanon.

Endives have not fared as well as mushrooms in Lebanon, despite their earlier popularity. Good Earth Produce is the only company that grows it locally and Maalouf says its market penetration is 35 percent as compared to imported endives. Good Earth Produce currently grows 750,000 kilograms of endives per week but says that it goes up to 2 tons per week when the consumer demand is high such as, again, during Ramadan or the summer months when it is used by wedding caterers.

Maalouf blames the current relatively lower popularity of endives (when compared to mushrooms) on a smaller market, where it is mostly consumed in restaurants or special occasions at home, and on Lebanese consumers’ constantly changing taste in lettuce, which has moved from romaine to endives to lollo rosso and, most recently, to kale.

Still, the fact that there is a local production of endives – sold at $5 per kilogram instead of $7 per kilogram for the imported ones – has had some impact on increasing its consumption in Lebanon. “In the fruit and vegetable wholesale market, the fact that there are local endives at a price less than the exported variety made this product more accessible and caused retailers to be more excited about buying it. The same is the case for the hospitality sector, where you find endives on more menus,” says Maalouf.

Endives and mushrooms grown by Good Earth Produce are sold through Liban Fruits in the wholesale fruit and vegetable market for retail, and they distribute directly to the hospitality sector and some retail chain supermarkets through their distribution company (instead of supermarkets buying them from the wholesale market).

Good Earth Produce has six rooms of 700 meter squared each for mushroom production

In the hospitality sector, Maalouf says many chefs are switching from the imported endives and mushrooms to the ones grown by Good Earth Produce and today they have more than 90 clients among chain restaurants and hotels.

While Liban Fruits does export locally produced fruit and vegetables to the Gulf countries, Maalouf says a negligible number of their clients there ask for Lebanese produced mushrooms and endives. Maalouf explains that it is more efficient for their Gulf clients to import these items from Europe where they are produced en masse, and would therefore be priced lower than the ones at Good Earth Produce, which are produced in smaller numbers than in Europe.

Another reason for the export price variance between Lebanese produced mushrooms and endives and European ones is the higher cost of producing them in Lebanon – where, according to Maalouf, energy is the highest expense.

In considering locally producing niche items – such as mushrooms and endives, Massoud says they first determine how big the local demand is and then balance that against the cost of import to see whether or not it would make economic sense to develop the product in Lebanon. They recently added locally grown kale and colored varieties of cherry tomatoes to their portfolio at Liban Fruits.

Maalouf says they are more successful than they expected with Good Earth Produce, but that one of the reasons we are not seeing such niche items go national is due to the fact that they are not basic food products in Lebanon. “Growing such niche items requires a lot of advance planning because when instability rocks the country, these are the first products that people would stop buying,” he explains.

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