WELL-EARNED RETURNS

Lebanon 2016 | ECONOMY | INTERVIEW

TBY talks to Eddy Cherfan, CEO of AC Holding, on diversification, government support of energy projects, and ambitions for abroad.

Eddy Cherfan
BIOGRAPHY
After gaining experience in channel and product management, Eddy Cherfan was appointed CEO of Cherfane, Tawil & Co. (CTC) in 2006 at the age of 25. Under his leadership, the company has achieved regional expansion throughout Syria, Jordan, the UAE, and West Africa, as well as horizontal diversification, together resulting in a fivefold increase in revenue. His involvement in the daily operations of CTC’s parent company, AC Holding, keep him close to the products and markets, leading to the integration of key expansion initiatives in renewable energy and energy efficiency at the heart of the group’s development strategies.

AC Holding has moved into other sectors and industries. How has this shift strengthened your position in the Lebanese market?

Our strategy has been to diversify our investments as much as possible and to reach as many markets as we can, so our results have magnified in a positive way. Some of the sectors we heavily invested in, such as the technology sector, have witnessed an oversaturation in many product lines, causing timid growth in the past years. This has prompted us to venture into new areas where there are more possibilities for growth and where we can play a more advantageous position. This move has signified great results for the company and we plan on moving forward with this strategy.

How is this oversaturation in the IT sector pushing you to explore new areas?

The business is moving from hardware to software and from devices to solutions; hence, we are investing in these two segments through cloud-based applications and hosting services, offering cloud-based software as well. The slowdown in economic activity and the shifts in the IT and technology sectors have pushed us to explore new markets that we otherwise would not have penetrated. The market is slowing down and that is why we look at different types of approach, mainly in hosting services.

How is your business in the real estate sector currently faring?

The real estate sector at the moment is going through complicated times. There is a slowdown impacting the entirety of the sector. The demand side is low and has shifted away from the middle- and high-end developments to smaller developments, but we remain cautious nevertheless, since we do not know how the market will evolve in the next year. That is why we only have one project at the moment, which will be delivered soon. We have kept working indirectly with most developers operating in the market through our commercial business in projects involving renewable energy and such, but that is about everything we are doing in the real estate sector at the moment.

The central bank recently launched the NEEREA program to grant subsidized loans on energy projects. What have been the benefits of this program?

There are many projects pushing for a wider use of renewable energies in the country, but NEEREA is definitely the one with the biggest exposure. We are approaching clients who have space for solar panels and we use the law enacted by parliament to connect them directly to the grid using a net metering system. We are also channeling these customers toward subsidized loans offered by the central bank through NEEREA, so they can benefit from an interest rate of 0% for the first two years. What makes this scheme even more attractive is that the total investment is recovered in a period of four or five years.

What are your current plans for expansion outside of Lebanon?

The holding's operations abroad account for 70% of our revenue. Right now, we consider Africa the place to be, particularly Ghana and Côte d'Ivoire, where we have expanded into various businesses, including the trading of commodities. In Ghana, we are present in the sports betting business with 100 licensed centers around the country. This is an interesting case because it is outside the scope of our regular business, but we have done extremely well so far. We also want to explore real estate, healthcare, and education in African countries. We are optimistic of what will happen in Syria once things get better and the reconstruction process starts. We have not left the Syrian market even during the conflict and are hopeful about the future.