NEW WAYS

Lebanon 2015 | ECONOMY | VIP INTERVIEW

TBY talks to Jacques Jean Sarraf, Chairman & CEO of Malia Group, on his strategy at the helm of a diverse group of companies.

Malia Group is a diversified group of companies with activities spanning several sectors. What strategies do you follow in order to create synergies within the group, while at the same time enhancing partnerships with other players in the market?

Malia Group is currently going through a period of transition and restructuring. In 2016, my responsibilities will shift away from being both CEO and Chairman and I will focus on the Chairmanship of the Group. Restructuring at the corporate level will include two CEOs—one for Malia Holding and one for Malia Invest. One will work at the national level given the importance of the market, and the other on the international front. This is in order to centralize our operations to meet the coming challenges in an unstable regional environment. Furthermore, the restructuring includes the appointment of a corporate secretary who will ensure that corporate governance is being implemented now that we have the financial systems in place. As a result of our adoption of corporate governance that we did in consultation with IFC, we have established committees that also include external stakeholders and advisors. We will also be recruiting a CFO in the near future. To ensure that succession planning is set in place, we have a created a family office, headed by an external party, to be ready for the fourth generation. Moreover, we believe that restructuring in such a way sends a positive message to all our stakeholders that will guarantee that Malia Group continues to grow and expand. Furthermore, the restructuring includes a new strategy based on full transparency, and we are planning for an IPO in the near future depending on regional and international factors. It was postponed from 2016 due to the security and the political situation in the region and will be dependent on the situation in the region.

Looking forward to Malia Group's regional and international midterm future, from where do you anticipate the core revenue streams originating?

We believe in investing during times of uncertainty, and that opportunities present themselves as uncertainty peaks. We act as pioneers in different markets and are present where others do not yet have the vision to be. But it's important to properly assess the risks and react to uncertainty in a well-studied manner and with a long-term strategy. The Middle East is undergoing a period of acute turmoil, particularly in the geostrategic areas between the Levant and Iran and in territories in North Africa. There is a near collapse of the old world order and the weakening of the central government in favor of factional rule. This is very similar to what happened in Lebanon. I mention this because, at Malia Group, we have established a system that can actually thrive during times of crisis as we did in the 1970s and onwards. Moreover, we have also continued to invest in Iraq, despite the security and currency challenges faced by the country. This is because we believe that we should smartly invest where there are real and present opportunities. We have recently invested in our pharmaceutical manufacturing business for a presence in Saudi Arabia, and we continue to expand our ICT operations in the GCC and North Africa and have other plans in the pipeline.

What are your main focus and expectations for the year ahead?

We have a three-year plan that essentially includes investment in Lebanon in our pharmaceutical manufacturing industry, Pharmaline, whereby we will be working on the third extension of the plant. And, we're working in technology through MaliaTec, which has become one of the leading mobility, automation, and solutions providers. With MaliaTec, we will continue to expand in terms of brands and products, as well as by territory. Since we are partners and representatives of Honeywell, one of the largest technology suppliers of mobile solutions, we are now expanding our cooperation in different markets. And now we are looking to do the same in certain African markets. MaliaTec is based in Beirut, but has branches in Iraq, Kuwait, Syria, and Algeria. Also, on the regional level, which for us is the Gulf market, we are developing Pharmaline Saudi Arabia. We have already signed the agreement for a long-term 20-year lease in King Abdullah City. We believe that it will be operational in 18-24 months. In parallel, Pharmaline's R&D Department is developing a lot of products specifically for the Gulf market. As for Iraq, we have three exciting new projects under construction, including a new long-stay hotel under the Arjaan by Rotana brand in Erbil, and Magma Square, a Courtyard in Suleimania that includes restaurants, movie theatres, and shops, and a logistics company in Erbil. Our aim is to renew the growth of investment over the coming years. We are ever keen to invest, despite regional uncertainty. We need to reengineer our means of doing business to enjoy greater security for the future, while sustaining growth.

Malia Group has been involved in the industrial production of personal care for 60 years. What challenges and respective opportunities have you encountered while building an enterprise in the Lebanese market?

In the beginning, we focused on personal care in health and beauty but now we are in many other sectors as well. In the personal care business, the challenge today is to develop new formulations and new products, and to perform in a way that the market can absorb them. Over the coming weeks, we will launch a new hair dye for the younger generation, which has an easy-to-use concept. We also continuously reformulate our shampoo formulas and styling gels according to generational trends. This is what basically makes us successful both locally and regionally. Now we are moving outside the region. We are looking to export Cosmaline, our in-house personal care brand, in Africa. Angola is one of our targets and the second target is Nigeria. Africa has a specific trend different from those in the Levant and the Gulf. For instance, in the Gulf there is no high demand for hairspray or styling gel. The highest demand is for shampoos, skin creams, and hand creams. We have to focus on an African range of products. In order to do so, our R&D department works to create new formulas that cater to a diverse clientele across numerous markets.