HOLD ON TIGHT
TBY talks to Mazen Moussallem, Chairman of Level 5 Holding, on the recent evolution of the group, expanding the regional footprint of its franchises, and anticipated changes in the media landscape.
BIOGRAPHY
An AUB graduate, Mazen Moussallem began his career in 1992 at Trust Advertising as a Media Manager. In 1996, he moved to Espaces, a leading media house in Beirut, where he worked as Commercial Director, before joining Antoine Aad in 199 to found Tree Ad. In 2004 Tree Ad was acquired by Level 5 Holding, a Beirut-based holding company established and led by Moussallem. Since then, Moussallem has continued to lead as the Chairman and General Manager of both Level 5 Holding and Tree Ad’s Chairman.What has been the biggest transformation for Level 5 Holding in the past two years?
We moved forward with the Orchid Batroun 27,000sqm four-phase project to open new outlets in the hospitality sector. The first phase was a beach lounge opened in July 2015, while the second one an event and wedding venue prepared for June 2016. Left to finish over the next couple of years are the third phase, a restaurant cluster, and phase four, a chalet housing development for seasonal rent. In the retail sector, we are currently further boosting the presence and the market share of Eden Park and opening the fourth POS in ABC Verdun. Finally, our media division is still the backbone of our business and constitutes 80% of our operations. We have continued expanding in outdoor by acquiring a 4X3 network that we rebranded as Douze, and investing in LED screens within Beirut City. We also signed an exclusive agreement with prestigious French group Le Figaro, with which we had a representation agreement for the Levant and that we have taken to a higher level by representing it exclusively for all GCC countries, including its online arm, CCM Benchmark, which it acquired in November 2015. We finally signed a franchising agreement with Madame Figaro, France leading women's fashion and social magazine as a joint venture with Special Magazine for the Lebanese market.
How has Lebanon's economic slowdown affected the advertisement industry?
Advertising is the pulse of the economic activity and you can measure the economy of a country by checking its advertising health and status. Since the economic recession started in 2012, the turnover for advertisement in the country has dropped every year. An unfortunate part of our industry is that companies tend to difficult advertisement expenditures first, as it is easier than firing employees or cutting other expenses. The second major challenge is the awful payment periods that we are facing in the advertising industry, which have increased from about 45 days after invoicing when I started 24 years ago to typically 120-150 today, which presents a great challenge for the economic development of our business.
Do you plan to take the French franchises you acquired in Lebanon to other countries in the Middle East?
For the Eden Park brand we only plan to develop it in Lebanon. For Mauboussin, we acquired the franchise for the entire Middle East and faced some significant problems in Kuwait, which led us to close our store there. Although we are well established as a group in Lebanon, we do not have the capacity to open alone in the Middle East; hence, we need to partner with a strong partner there to be able to develop Mauboussin in the region. The experience in Kuwait showed us that we cannot go in alone with this concept and need the backing of someone with sufficient knowledge of the local markets in the GCC. Dubai and Saudi Arabia are definitely the most suitable platforms to expand in the Gulf.
What impact will the plan to have full fiber-optic coverage by 2020 have on the local media and advertisement landscape?
It will transform the entire media scene, starting with TV as we do not receive it through fiber optic as they do in Europe and the US. The cable operators will have to change their business model and it is going to be a major transformation in the audiovisual scene. The current boom of digital media is also threatening traditional media, who need to evolve and adapt or else face bankruptcy. I always give the example of Le Figaro, which was able to cope with the digital revolution and even increase its distribution and total reach through its various platforms. This is a fantastic way of going through these changes—identifying the audience we should aim our digital and print segments toward.
HOLD ON TIGHT
TABLE OF CONTENTS
Focus: Lebanese-French Relations
Let’s be Franc
Lebanon shares a close relationship with its former colonizer, both in terms of economic relations and cultural identity among Lebanese. In spite of hardships like the presidential power vacuum and Syrian war next door, the bond is only getting stronger.
read articleFocus: Tripoli Economic Free Zone
The Tripoli Transformation
The Tripoli Special Economic Zone (TSEZ) is one of most ambitious projects in Lebanon at the moment. With an initial cost of USD27 million, it is meant to provide an alternative to the heavily centralized economic activity in Beirut, a new gateway for investments and trade to settle in northern Lebanon, and will transform the image of a long-neglected region.
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Dr. Freddie Baz, Vice Chairman & Group Strategy Director, Bank Audi
TBY talks to Dr. Freddie Baz, Vice Chairman & Group Strategy Director of Bank Audi, on the bank's increase in profits, dealing with currency devaluation, and working to turn the economy into an export-driven one.
read articleReview: Insurance
Life is a Rollercoaster
Unlike many emerging markets, Lebanon enjoys a relatively high insurance penetration rate and strong life segment, buoyed by compulsory lines and bancassurance. Competition remains fierce, however, and reform aimed at encouraging consolidation looks far off.
read articleInterview
Max R. Zaccar, Chairman of Commercial Insurance & President of the Association, Insurance Companies
TBY talks to Max R. Zaccar, Chairman of Commercial Insurance & President of the Association of Insurance Companies, on the resilience of the sector, increasing the already-high penetration rates in the country, and remaining one of the strongest insurance companies in the region.
read articleInterview
HE Arthur Nazarian, Minister, Energy and Water Resources
TBY talks to HE Arthur Nazarian, Minister of Energy and Water Resources, on the potential offshoots from oil and gas explorations, the country's National Energy Efficiency Action Plan, and attempts to increase renewable energy consumption.
read articleInterview
Wissam Zahabi, Chairman, Board of the Lebanese Petroleum Administration (LPA),
TBY talks to Wissam Zahabi, Chairman of the Board of the Lebanese Petroleum Administration (LPA), on making the investment climate attractive for foreign companies and becoming self-sufficient in energy.
read articleFocus: Sovereign Wealth Funds
Gas Pipe Dreams
Despite excitement over exploration of Lebanon's hydrocarbons, the creation of a sovereign wealth fund, which was included in legislation, has yet to take place. The country faces several obstacles in its path to creating and properly managing a fund.
read articleInterview
Pierre El Khoury, General Director, Lebanese Center for Energy Conservation (LCEC)
TBY talks to Pierre El Khoury, General Director of the Lebanese Center for Energy Conservation (LCEC), on the development of energy efficiency in Lebanon, awareness of energy conservation, and the country's 2020 renewable energy goals.
read articleInterview
Dr. Fady Gemayel, President, Association of Lebanese Industrialists (ALI)
TBY talks to Dr. Fady Gemayel, President of the Association of Lebanese Industrialists (ALI), on the group's work to promote industrialists, new developments in terms of industrial cities, and the future of industry in the country.
read articleFocus: Industrial Cities
Industrial Solution
Domestic and regional events have stifled Lebanon in building a strong national industry to protect and sustain its economy. Four proposed industrial zones throughout the country may provide it with the economic backbone it so desperately needs.
read articleInterview
Marianne Hoayek, Director of the Executive Office, Banque du Liban
TBY talks to Marianne Hoayek, Director of the Executive Office of Banque du Liban, on the roots of the Circular 331 concept, bridging funding gaps throughout the startup lifecycle, and the country's growing knowledge economy.
read articleRoundtable
Thinking It Through
On June 12, TBY and the American-Lebanese Chamber of Commerce (AmCham) organized a roundtable titled “Startup ecosystem sustainability: fostering cooperation to drive entrepreneurship." The participants discussed the impact of Circular 331, an initiative by Bank du Liban, the Lebanese central bank, to inject a potential of USD400 million into the local enterprise market and guarantee 75% of banks' investments in startups and startup support.
read articleFocus: Infrastructure for the startup ecosystem
The New Star
Startups are ubiquitous in Lebanon despite the difficulty of starting a business and the lack of services available to new businesses. However, a number of actors, both public and private, are innovating the environment and allowing startups to fulfill a greater role in the country's economy.
read articleFocus: Maritime Exports Bridge
Bridging The Gap
The conflict in Syria has wrought serious damage on the Lebanese economy, effectively closing off the country's trade routes through Syria. However, a new program geared at balancing the price disparities between land and sea transit is poised to help Lebanese industries.
read articleFocus: Real Estate
A Stimulus For The Rest Of Us
The real estate market in Lebanon is nothing like it used to be. The sector has slowed considerably, and demand has shifted from the traditional center, Beirut. However, stimulus packages from the central bank over the years have proven beneficial for all parties involved.
read articleInterview
Armand Pahrés, President, Lebanese Pharmaceutical Importers Association (LPIA)
TBY talks to Armand Pahrés, President of the Lebanese Pharmaceutical Importers Association (LPIA), on the development of legislation in the sector, boosting further innovation, and opportunities for Lebanon to become more self-sufficient in pharmaceuticals.
read articleFocus: Incentives for pharmaceuticals in Lebanon
Pharma Land
Lebanon has always been the region's leader in all things health related. Its pharmaceutical industry is no exception, and the country's incentives for international pharma companies to operate, manufacture, and distribute in Lebanon are only getting stronger.
read articleInterview
HE Elias Bou Saab, Minister, Education and Higher Education
TBY talks to HE Elias Bou Saab, Minister of Education and Higher Education, on the ministry's initiatives to improve the education system, ensuring access to education for Syrian refugee children, and reversing the brain drain in the country.
read articleInterview
Mohamed Harajli, Provost, American University of Beirut (AUB)
TBY talks to Mohamed Harajli, Provost of the American University of Beirut (AUB), on his upcoming plans for the university, the key role played by the AUB alumni, and fostering an entrepreneurial spirit among students.
read articleFocus: Programs to school Syrian refugee children
High Marks
Proportional to its population, Lebanon has taken in significantly more Syrian refugees than any other country. With the country now facing the problem of placing the tens of thousands of Syrian children in school, international donors and local and foreign organizations are making educational support a priority.
read articleInterview
Joseph G. Jabbra, President, Lebanese American University (LAU)
TBY talks to Joseph G. Jabbra, President of the Lebanese American University (LAU), on embracing technology at the university, the challenges of Lebanon's brain drain, and the importance of having international links with other institutions.
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