TBY talks to Zafer Chaoui, President & CEO of Château Ksara, on milestones of the company, export markets, and further investment plans.

What have been the milestones for Ksara in the past two years?

Château Ksara has substantially increased its production to 3 million bottles per annum since 2010. Our restaurant has also become a real masterpiece after its expansion and now attracts a huge number of visitors. The worldwide economic crisis and the war in Syria has affected the wine sector similar to that of most other sectors of the economy. The decline in the number of tourists coming to Lebanon has reduced local consumption. Château Ksara had foremost focused on the local market before expanding to exports; however, both markets are complementary. The world is big and Lebanon's production is small, yet it is excellent. We have a great potential for growth and excellent opportunities lie ahead of us.

Which countries do you mainly export to, and what new markets are you looking into?

Our regional exports are to Jordan, the UAE, and Syria, which was an important market for us. However, with the current situation there, our sales have dropped considerably. Europe is our traditional market, particularly France, the UK, Germany, Switzerland, and Scandinavia. We also have small sales in Russia and Belarus. In the Far East, we are targeting China, Japan, and possibly India soon.

How are the Lebanese wines perceived abroad?

Our wines enjoy an excellent reputation abroad with, in my view, one of the best qualities for value in the world. We do not have high-end wines with price tags over €1,000 per bottle. Our prices range is from €6 to €40, and at these price levels our wines are highly appreciated.

“We are privileged by a reputation and a market size that puts us at the top of the wine producers list."

What trends can you identify in the local demand for wine?

The number of Lebanese wine producers has increased tremendously bringing the market to a safe, positive, and constructive level of competition. Such competition stimulates demand and creates awareness. There is a clear trend to replace hard drinks by low-level alcoholic drinks. For example, the increase in consumption of rosé is impressive. It is increasingly consumed in summer. At the beach, it is even taking a share of the beer consumption market. Today, if you go to the beach on a Saturday or a Sunday, the number of people drinking rosé wine would amaze you. This is a sector that has taken off very well and is still far from saturation. We can produce and sell more whites and rosés; however, we are restricted by the quantities and varieties of available grapes. For red wines, our production is very much appreciated and their taste is similar to the Bordeaux wines from France with the same variety of grapes and a certain similarity in the climate.

What do you believe needs to be done to further boost and develop the wine sector in Lebanon?

The Ministry of Agriculture and the Chamber of Commerce are aware of the importance of the wine sector. Although their financial assistance is limited, they are doing their best to help. The Ministry of Agriculture financed the Lebanese Wine Day in Paris on May 14, 2013 and will do the same for the Lebanese Wine Day in Berlin in 2014. We are currently negotiating with the Chamber of Commerce for a contribution to the participation costs in the ProWein International Wine Fair exhibition in Düsseldorf. The Managing Director of the International Organization of Vine and Wine (OIV) has been officially invited to Lebanon with a delegation to seal the relation between the OIV and our country, while the Director General of the Ministry of Agriculture, Louis Lahoud, has been appointed Representative of Lebanon to the OIV and Vice-President of the Economy and Law Commission.

What weight do technological advances have for Ksara?

Château Ksara invests in the most sophisticated and modern equipment. We have nothing short of any other producer and, although we will never be a big producer at the international level, we will continue to produce excellent wines that are well appreciated locally as well as internationally.

What investment plans do you have in mind for 2014?

We will be signing shortly an agreement for the commissioning of a new warehouse facility of 2,600 sqm. This will be our main investment for 2014. We invest in pallets and oak barrels on an annual basis and renew our equipment whenever needed. Our winery is located in the heart of the Beqaa Valley. The name of the location is Ksara, situated 45 kilometers east of Beirut. Our main offices and warehouses are located in Beirut. Our warehouses are supplied on a daily basis with a buffer stock to protect us from any shortage due to road closures in the winter because of snow or other unexpected accidents. Needless to say, the majority of restaurants and supermarkets are located in the outer Beirut area, which makes it necessary for a company of our size to cover distribution in Beirut as well.

What plans do you have to further consolidate your strong position as a key player in the wine sector?

In Lebanon, we are privileged by a reputation and a market size that puts us at the top of the wine producers list. To maintain this privilege, we need to permanently invest in our equipment, in our storage facilities, and in the quantity and quality of our grapes. We will continue to do so and we will remain the market leaders in Lebanon.

© The Business Year - September 2013