THROUGH THICK AND THIN

Lebanon 2017 | ECONOMY | INTERVIEW

TBY talks to Hubert Fattal, Chairman & General Manager of Fattal Holding SAL, on staying one step ahead of history, the importance of diversification, and remaining as nimble as possible in good times and bad.

Hubert Fattal
BIOGRAPHY
Hubert Fattal has been the Chairman and General Manager of Fattal Holding SAL since December 2015. He previously held several positions in the family company, which he joined more than 20 years ago. He graduated from Parsons School of Design in Paris and Goldsmith College of Fine Arts in London. The combination of his hands-on commercial experience and creative background and lateral thinking skills have given him a solid yet unconventional approach to the business.

What have been the milestones and achievements for Fattal over its 120 years?

Several milestones and a few turning points have marked our journey. Founded in 1897 in Damascus by our great-grandfather, the company succeeded in overcoming the hardships of WWI and WWII while first establishing an office in Beirut in 1926. In fact, the first exclusive agency that we acquired goes back to 1918, with sewing needles. By 1936, we had acquired several multinational agencies, including, among others, Bacardi Martini, Unilever, Bayer, and Schering. From the 1950s onwards, the golden age of Lebanon, the company witnessed an important period of growth by acquiring several more top firms in various industries. In 1965, our offices in Damascus were shut down, forcing our grandfathers to bravely continue their mission in Lebanon. The Lebanese civil war was yet another hit the company had to overcome with exemplary resilience in the 1970s. The 1980s saw the creation of Fattal Holding with a new era of technological advancement and further diversification of industries, on top of a rapid development of commercial representations. In 2000, we started to expand across the MENA and beyond, namely in Egypt, Algeria, the UAE, Jordan, Iraq, and France.

Are you planning further expansion to new markets?

Although our DNA is Levantine, we want to expand further in the MENA. We already have several suppliers in the aforementioned countries who would like to venture with us into new territories. These opportunities are all being studied. Especially in our turbulent part of the world, these expansions must be carefully assessed based on risks and opportunities and with full due diligence. While the size of a given industry might look attractive in a certain country, the regulatory environment could make it difficult to do business. We ventured into Sudan and had to withdraw due to severely adverse factors, although we know how to handle tough situations. On the other hand, we still have room for diversifying our lines of business where we operate. Understanding the dynamics of a country facilitates this. Nothing can be as precious as experience in the field and full knowledge of a consumer's habits and attitudes.

The group handles a large product portfolio. Is the key of your success in diversification?

Yes. That said, our diversification has been within the distribution mission itself. You see, in order to succeed in what you are doing, you need to be specialized, especially when the competition among distributors is intense. Our diversification is in our industries and geographies. We operate in seven independent lines of business, each having its own expertise and success drivers, structured in totally independent entities. FMCG is different from healthcare, and beauty is different from medical equipment or office equipment. Diversification balances risk and contributes in overcoming industry downturns. For example, when the pharmaceutical sector is hit, beauty or FMCG is there to compensate, and vice versa. Our industry diversification gives us a strong leverage across various distribution channels, from modern trade accounts to pharmacies and other channels. For instance, our FMCG brands benefit from the strong ties we have in the pharmacy channel, while our small home appliances benefit from our strong ties with the FMCG modern trade accounts. In terms of industries, FMCG and healthcare represent 80% of our business. We aim to reach a turnover of USD1 billion in the short-term. Although Lebanon still represents more than 50% of total turnover, our affiliates are steadily growing in various industries. With Iraq hopefully recovering soon and our resilient teams on the ground there, our growth objectives will be even more ambitious. We will never let go, irrespective of the country challenges.