Packaging in Lebanon

Interview with Dr. Fady Gemayel, Chairman of Gemayel Freres

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The Lebanese economy grew 8.5% in 2008 and a revised 9% in 2009 despite a global recession.  Furthermore, the World Bank estimates GDP growth in 2010 to be 7%.  These numbers are impressive given the current global economic climate.  What are the key factors behind this growth?

Lebanon is a land of resources and we have committed people who are eager to develop when the political situation and stability allows for it.  The past year has been very enabling in this respect and we are proud that in spite of what is happening worldwide we have been able to grow substantially and we look forward to additional achievements.

Is the growth going to diminish?

I am not sure we should expect a decline because the revival in the world economy may allow us to maintain our past growth. 

How do you see the issues of privatization, private public partnerships (PPP), and taxes in Lebanon?  What is the outlook for 2010 for these issues?

Privatization is very important but nevertheless we look as this as a part of a whole where we want to see full economic reform.  We have been part of a program that is very beneficial and depicts the benefits of PPPs and their potential to foster good relationships between entities. As far as taxes are concerned I think we have to realize that Lebanon is privileged to be tax heaven so to speak due to our tax rates compared to other areas.  If the tax rates grow it will be very low but I think we are a very attractive investment destination, regardless.

Lebanon’s GDP in 2008 was composed of agriculture (5%), industry (20%), and services (75.8%).  What is your assessment of industrial development in Lebanon?

“I think there is a lot to offer in the industry sector

in Lebanon and there are a lot of solid long-term opportunities”

.  We believe that companies who have survived the economic and stability problems will be successful in securing opportunities in the future.  We are very confident about the potential and we are proud of the industrial workforce in Lebanon due to their commitment and work ethic.

How competitive is Lebanon’s industrial base compared to other regional players?

We have strong disadvantages in costs, particularly when it comes to energy.  This is one of the biggest problems that we are facing but we hope it will eventually be solved.  Our competitive advantages include our ease of doing business and a solid base in human resources.  We want to focus on value-added activities that allow us to put forward our advantages worldwide. Many firms in the area operating in difficult energy-intensive areas have a strong background in developing despite these conditions and these would be ideal for international investors looking to expand in the region due to their expertise.  There are solid opportunities for joint-ventures and I would like to see Lebanese groups spearhead these efforts for companies in the region.

How would you describe your main competitive advantage?

We have a long history and we started the recycling industry in Lebanon in addition to introducing corrugated cardboard in 1956.  We are proud of our commitment and continuity in the area.  We are a one stop packaging shop in Lebanon that focuses on our exports and quality is a basic ingredient in our operations as we offer solutions to our customers.  In the global market we have a high degree of credibility and this is also an advantage we have. 

Have your exports slowed down due to the global economic downturn?

They have not slowed down but they did not grow in the matter that we wanted them to either. 

What kind of markets are your targeting to develop?

Some of our projects reach Canada and we are proud to export to Europe in addition to countries in the MENA region.  Gemayel exports 15% of its sales and we are trying to increase this number. 

Do you plan to diversify in the future?

“We are seeking to increase our exports and to increase

our sales by 50% in the upcoming years. “

We think we have a strong base in the paper industry and we look forward to expanding in the region and collaborating with other regional players. 

How would you characterize your expansion strategy?

We would like to look for regional and international partners that supply win-win situations. 

Gemayel Freres is committed to quality and service.  What kind of new innovation technology certifications have you been able to adopt?

We are very strong in PLP and POS and this is a constant challenge for us to offer our customers the latest and most competitive solutions.  Our platform allows us to provide innovative solutions and we have a strong dedicated team to deliver these onto the market in a timely matter.