How has AVE's global strategy evolved over the years?
Founded in 1904 in Brescia, Italy, AVE is among one of Italy's oldest and most prestigious manufacturers of electrical equipment. We were recently included among the top-100 Italian companies, a milestone that recognizes our long history and dedication. Our core business includes home automation, hotel automation, and wiring devices for residential use. Outside of Italy, our main presence is in the MENA region, followed by Eastern Europe. We have branch offices in Dubai, Belgrade, Amman, and others, and local factories in Tunisia, Romania, and Lebanon. AVE's philosophy is to bring a local, valuable product to the markets it serves. The medium- to low-end market is mostly dominated by Chinese products, which are cheap but of questionable quality. We can deliver the best combination of quality and price to markets like Lebanon. The Tunisian market, where we have been present for 25 years, represents one of our great success stories. We started through a joint venture with local partners with a minority share of 20%. At present, we employ 400 people in Tunisia and represent 85% market share. We are also the second-largest player in Libya. Following our success in Tunisia, we decided to increase our presence in the Lebanese market. AVE is running an industrial plant in Lebanon and has a 51% market share. The project called Meta Lebanon is a joint venture with A&G Holding, a Lebanese company.
Why did you decide to invest in Lebanon?
Investing in Lebanon might seem like a risky move to international companies. After careful assessment of the security risk, we determined it to be a safe investment. Instead of buying our own buildings, which is an expensive venture in Lebanon, we preferred to invest in machinery and projects. Nevertheless, Lebanon presents a set of interesting opportunities for us. It is a strategic location to serve the Levant region and post-war reconstruction in neighboring countries. Moreover, thanks to the FTA between Arab countries, everything produced here is easily exportable. We are already the number-one brand in Jordan for medium- to high-end market, but we are looking to grab a bigger share of the low- to medium-end market. Our partnership with A&G Holding was one of the main reasons this project came to light. A&G Holding is a group of retailers and wholesalers of electrical material in Lebanon. AVE's conditions for A&G Holding to enter the joint venture were not easy at first, as A&G Holding was asked to invest EUR1.5 million (USD1.6 million) as a know-how fee. However, thanks to AVE's good reputation, A&G was able to raise capital and enter the JV. Our cooperation is mutually productive: AVE brings in international know-how and a large structure, while A&G contributes with logistics expertise and local know-how. An important point in common for our businesses is the strength of family ties. The choice of Zahle for the factory location reflects different exigencies. Zahle has a constant supply of electricity, which is a great plus in Lebanon. Unlike Beirut, costs of properties and labor force are cheaper and Zahle offers all the amenities and the security of a proper city. The city is strategically located, not far from the Syrian border and just a short distance from Beirut.
What are your goals and expectations for 2019?
The factory opened in May 2019, and we have already pre-rescheduled orders with companies in Jordan and Syria. Our long-term goal is to become the market leader in Lebanon and Jordan. An important priority is to lobby the government to protect Lebanese products by imposing import duties on low-quality Chinese goods. A project of this sort will greatly benefit Lebanon on various levels, from job creation to offering a high-quality product. It is important that the government shows its support.