A Key Player in Wine Industry of the Middle East – Château Ksara in 2015

Interview with Zafer Chaoui, Chairman and CEO of Château Ksara, Head of Union Vinicole du Liban

How is the wine industry withstanding the current situation in Lebanon and in the surrounding region?

I would like to limit my intervention to Lebanon because I believe that Lebanon is certainly by far the most important producer of wine in the area. Since we met last time, the number of producers increased a lot. Today we consider that there are about 40 producers in the country of uneven size. Some are quite big, some are medium and some have a small family business. This has brought to a safe, constructive and positive competition among Lebanese wine producers. We believe we are at about 8.5 million bottles per annum today. We have been at about 8 million to 8.5 million bottles per annum for the past two years. So there hasn’t been a huge increase in the quantity produced and let’s face it, our overall production remains extremely small compared to the world scale. The target is quality, niche markets and of course selling Lebanon as one of the oldest wine producers in the world. We enjoy a microclimate which allows us to produce an excellent quality of wine. I would like to emphasise that the ratio of quality to price of Lebanese wine is one of the best in the world.

You are also heading the Union Vinicole du Liban, what are the objectives of the Union?

Château Ksara is the leading producer in Lebanon and I have been a member of the Union Vinicole du Liban since it was established in the 90s. I have been very active supporting my predecessor and dear friend, the late Serge Hochar. We founded the institute together, Serge headed it and I became President of the Union. The Union members should represent about 90% of the total production. We are trying to work closely with the public sector in Lebanon to have modern laws and regulations adapted to the international requirements. Also we try to participate in worldwide exhibitions and events at Lebanese Embassies abroad under the Lebanese flag and as a united producing country. Indeed,  our small production and the positive spirit which prevails among the members, bring us to confront the world as one country under the Union Vinicole du Liban umbrella.

The “Sunset” Rosé of Ksara is by far the market leader in the country.

Can you talk about the development of Lebanese enotourism?

Enotourism was developing well until the Syrian war started four years ago. This war affected tourism in general and visits to some areas of the country in particular. Still, people got used to the situation, proof being the considerable increase of the number of visitors who came to Chateau Ksara during the first three Quarters of 2015, a number which is almost the double of that of year 2014.

What are you doing to attract more tourists?

We need security. This is the golden key for world tourists deciding either to come to a country or not. We are working hard together with our colleagues, with the travel agencies and with the support of our Authorities and of the chamber of commerce to attract tourists to our vineyards. We developed a film about Lebanese wine which is being distributed among the Lebanese Embassies abroad. In the Batroun area, our colleagues have established a wine road map. This is quite interesting because Batroun is small geographically with a few producers there who are offering a combined visit to their wineries. In the Beqaa, the situation is more difficult as the distance between the wineries is bigger and as the neighbouring to the Syrian border creates some reluctances.

Château Ksara is the largest and oldest winery in Lebanon. What have been the major developments since our last interview?

Our range of 14 products is substantial. We are concentrating on these products and trying to develop them to the highest extent possible. Our “Le Souverain” which was produced when we celebrated our 150th anniversary is performing extremely well and being more and more appreciated all over the world. In 2000, as a reminder, we produced “La Cuvée du 3eme Millénaire” which is selling very well. These two wines are the jewels of our production in red wine. Our “Cuvée du Pape” and our “Blanc de Blancs” are exceptional in white wine and I am proud to tell you that a study made recently on the Lebanese market by a most reliable company showed that the “Sunset” Rosé of Ksara is by far the market leader in the country. We are not trying to add new products to our list as we believe that our range is fantastic. We are trying to strengthen the position of each of our products. Concerning investments, we just finished building a most sophisticated warehouse enabling us to absorb the continuous growth in our production. We are as you know producing 3 million bottles out of the 8 to 8.5 million bottles produced in Lebanon every year. We have an aggressive selling policy; the global economic crisis which started in 2008 hits us with our exports. Competition is becoming huge. We are also faced with a weaker euro. This is not easy but we are determined to continue as a market leader who has full confidence in his products.

What are your major export markets?

Prior to the Syrian war we saw a  substantial development in Syria. The increase in number of tourists going to Syria and the restaurants in the old parts of Damascus and Aleppo  brought to a tremendous increase in exports to Syria. Our exports today are roughly 20% of what they used to be. Our main exports go now to Western Europe, mainly France and England. We are working hard to develop the United States and Canadian markets, we have niches in the Far East and our sales to the UAE increased impressively during the last three or four years. The statistics concerning Lebanese wines show that roughly 40% of these wine are exported to 33 to 35 different countries.

What would be your strategy for the company for the medium term?

The strategy of Château Ksara is certainly to consolidate its position as a key player, not only in Lebanon but in the Middle East. We are investing wherever we can and whenever we can to maintain our position and this is paying back.