COVID-19 Measure: Read Full Magazine Here. Even though predictable and preventable, for the past 22 months, Lebanon has been reeling from a wrenching economic crisis, one the worst crisis in history, impacting the livelihood of millions of citizens in Lebanon.
By the time the financial, economic, political and social crisis erupted in October 2019, the economy was facing four extraordinary challenges. First, public sector debt had reached such elevated levels that a default had become a question of when, not if. Second, the banking sector, having lent three-quarters of deposits to the government and central bank, had become functionally bankrupt and increasingly illiquid. Third, the productive economy had experienced virtually no growth for an entire decade — a development with acute socio-political implications. Finally, and perhaps most importantly, the country was politically rudderless.
The government and public servants that where in charge when the crisis hit in October 2019 became impotent to such an extent that it lacked willingness and international and local community trust to deliver on any of the reforms required as a condition for foreign direct investments and support.
More importantly the explosion of August the 4th at Beirut port, the resignation of Diab’s government and the covid pandemic have worsened the crisis and it’s alarming security consequences and socioeconomic / Education and hospitalization sector implosion.
Most recently, the international community at large and every Lebanese is on watch to see whether Prime Minister Mikati and president Aoun are going to form a government and if formed will it succeed to create enough confidence? Lebanon’s sectarian history is rife with conflict. An economic collapse provides a perfect habitat for a return of violence especially after the recent August events in Khaldeh and the explosion in Akar on August 15th 2021.
GDP has collapsed to by 70%, Brain drain is frightening, the social security CNSS is bankrupt and the unemployment rate has increased by 250% at least since October 2019.
As a result, the auto market new car sales recorded a decline of 90% if we compare 2015 to 2020.
As such, in an exclusive interview, Nicolas Antoine Boukather explains to BUSINESS LIFE how A.N. Boukather Holding is facing this existential crisis and leading by example.
Established in 1927, Boukather holding with activities in Lebanon and the U.A.E and soon expanding to the GCC, is diversified into the sectors of mobility, real estate and agriculture. They represent in Lebanon exclusive distributor of premium automotive brands, namely Ford, Mazda, Opel, Piaggio, Vespa, Aprilia, KTM, Bajaj, Stromer and Otokar in Lebanon.
The grandfather of Nicolas, Nicolas Boukather Senior became a pioneer car importer to the Middle East. He was among the first entrepreneurs ever to imports motor vehicles from the United States of America to Lebanon, Syria, and Iraq in the 1920’s. His early success transferred to his son, Antoine Boukather, who was one of the first distributors back then to introduce Mazda in 1968.
Now with more than 50 years since the relations with Mazda were initiated, and almost over a 100 years since Nicolas Boukather involved the family in the Auto trade business, ANB, with both Anthony and Nicolas Boukather Sons and Grandchildren to the founders, has become one of the most dynamic, trusted, and valuable mobility distributors.
Nicolas Antoine Boukather is currently the Chairman of the board of A.N. Boukather Group Holding and the CEO of FOREST a family office for real estate services.
He’s an alumni of Harvard business school, holds an Entrepreneurship Masters from HEC- Paris, a BA in Economics from the American University of Beirut, and graduated from Notre Dame de Jamhour college.
When he rejoined the family business in 2004, Nicolas with his twin brother Anthony took the leadership of the company and succeeded in implementing new strategies leading to growth and innovation, while sustaining the family driven enterprise culture and core values of integrity and transparence.
Nicolas is also member of the board of trustees of the children cancer center of Lebanon and general secretary of its board of directors, member of the board of YPO-Lebanon, Endeavor and HEC-Paris Alumni.
BL: How was A.N. Boukather Group established?
Nicolas Boukather: The company started in 1927 when my grandfather Nicolas Boukather started to import cars from the United States of America when he came back from America. He was one of the first importers of cars like NASH, Rambler and AMC vehicles to the region.
BL: What are your company's main products?
Nicolas Boukather: At the moment, we are involved into three different sectors based in Beirut: 1-Mobility 2- Agriculture 3- Real Estate and we have operations in the United Arab emirates and expanding in the GCC.
BL: What’s the purpose of ANB in the mobility sector?
Nicolas Boukather: The purpose of A.N.B. is to put a genuine smile on the stakeholders face and customers. This is what we are doing by providing consistently excellence in customer service. We decided to go all the way from buses to cars to 3 wheelers and then 2 wheelers, importing the best price to quality ratio the world has to offer, from different regions of the world (America, Japan, Europe and India) of premium automotive brands, namely, Ford, Opel, Mazda, Bajaj, Piaggio, KTM, Vespa, Aprilia, Stromer and Otokar in Lebanon and beyond. Along with accessories and apparels of motorcycles and now we are launching new ventures of electrical bicycles and electrical scooters to accompany innovation in the field of mobility. We are providing mobility solutions, and premium after care, for anyone who would like to enjoy moving forward. This is why our motto in mobility is “Enjoy Moving Forward”.
BL: What are your family's contributions to Lebanon?
Nicolas Boukather: We strongly believe in the capacity of the private sector to bring their know-how to rebuild Lebanon on stronger grounds and importantly to position the liberal private sector as a pillar for nation building. In our constitution as a family, we have three missions. One of them is to contribute to Lebanon.
Therefore, guided by this mission, my twin brother Anthony who is the Chief Executive Officer of our organization and myself are heavily involved in contributing to Lebanon like our parents and grandparents have contributed before.
Anthony is a member of the board of directors of OumElNour into health care and he is the president of the board of INSEAD Alumni Association in Lebanon and I am a member of the board of trustees and General Secretary of the Children Cancer Center in Lebanon and a member of the board of HEC Paris Alumni.
We attracted to Lebanon the best education that the world can offer, one of them is the masters of Entrepreneurship of HEC Paris to Beirut and by helping cure cancer children and provide a path to recovery to drug addicts.
Lately the business community have entrusted me to become the president of the Business Leaders association (RDCL) and I intend along with my colleagues in the board and members of RDCL to bring the know-how of the private sector to the public sector. We as RDCL are Multi-sectoral, multicultural and national. We believe in Sovereignty, meritocracy, parity, integrity and citizenship and would like to portray these messages inside the public sector which have failed on both so far. Beside from recruiting new members, connecting with the diaspora, mediating between disciplines, policy making advocacy, we will be supporting innovation, job transformation, governance principles, and establishing platform to reinforce exports and attracts FDI’s.
The Rassemblement de Dirigeants et Chefs d’Entreprises Libanais (RDCL) is a group of business leaders of Lebanon. RDCL leads by example for unity, change, engagement and innovation. The country is living existential critical moments, the private sector has been dismantled and many are on the verge of bankruptcy. Our role is to unify the private sector under one roof and work hard to bring the know-how of the private sector to the public sector. The youth of Lebanon have the same aspirations and we will do our utmost to answer these aspirations.
We aspire for a neutral country, protected international resolutions, that becomes the land of cultural dialogue. Once the private sector unites behind this goal, then this nation will become the land of opportunities, and much needed confidence will kick in.
Unfortunately, today, we are living in extremely grave moments in the history of Lebanon, are realistic as well, however will not sit on the bank of the river counting the victims. We will act.
Meanwhile, we urgently need from one side to stabilize the infrastructure of education, hospitalization, fuel, internet, and others and from the other we urgently request a social safety net to support a vast majority of Lebanese citizens living under the poverty line.
BL: What are your values?
Nicolas Boukather: Our family values are the following: Trust, respect, responsibly, integrity, happiness, optimism, tradition and empowerment.
We live our principles every moment and make sure transmit them to the next generation.
BL: How did the blast of Beirut Port impact the sales and imports of new cars, buses and bikes and scooters?
Nicolas Boukather: The impact of the economic crisis that started in October 2017, reduced sales of cars by 90% because there is no access to financing and the limitation in the purchasing power of the Lebanese people. As far as the impact of the explosion of the part, this was huge. The blast was a disaster. It destroyed our capital city, killed 220 Lebanese, many are friends and children of friends. We felt responsible and very quickly we put our warehouses at the availability of the red cross for one year free of charge. We sent all our senior and junior team next day after the explosion to the destroyed area and they contributed in cleaning parts of the destroyed area from the streets and the buildings immediately after the blast. We still provide support to NGOs like Beit al Baraka and Nussaned wherever we can.
BL: You said the car sales went down by 90 percent, what about the sales of other products like motorcycles, bicycles and scooters?
Nicolas Boukather: The sales of vehicles went down but the sales of motorcycles, bicycles, scooters and the three wheelers increased because people are looking for more affordable means of transportation.
BL: Nicolas, what can you say about your company's motorcycles, 3wheelers, bikes and scooters and their relative brands? What is so special about them?
Nicolas Boukather: When we came to think about a strategy in 2007, we thought the best way to reduce risk is to diversify. We started to invest in motorcycles and scooters in the year 2008 when the market was not really existent in Lebanon. Hence, we developed not only the import and sales but also training for customers for them to learn how to drive 2 wheelers. We developed a driving school and a club for people to meet. We also established training abroad for them bring them the best the world has to offer. Therefore, we developed the culture behind motorcycles and not only sales and after sales.
We imported accessories, helmets, clothing in order to make people safe when driving motorcycles. It was a necessity and it is more and more today.
We also developed an in-house assembled motorcycle to be launched soon, it will be called “B”.
3 wheelers are also taking traction, and we are recruiting people as we talk to assemble the BAJAJ RE and MAXIMA that are being used at the moment in rural areas.
The world of mobility is transforming itself to become connected and electrified, and Lebanon and the region has to transform as well. Today, we have launched the electrical bicycles venture in the GCC in Lebanon. Mobility in the world is changing and therefore moving on a bicycle provides freedom, good health, good ecology and it is easy to park. Today, with electrical bicycles, moving is easier, healthier and ecological.
The concept will be called BIKEERA and expect launch very soon.
BL: What are the brands of your bicycles?
Nicolas Boukather: We have all the brands starting from the lower end to the upper end importing them from China – Austria and Switzerland. We have all the range and a big variety including accessories and scooters. The BIKEERA new venture which we will be launching and we have started importing them and we will be distributing them not only in Lebanon but also in the GCC countries. As part of the 2030 vision, the Government of Dubai aims to promote a healthier lifestyle and has built thousands of KM for dedicated biking paths.
BL: What was the reaction of your group with regards to the coronavirus outbreak, would you please elaborate?
Nicolas Boukather: With regards to corona virus, ANB has realized that the nurses and the medical team needed different cars to move to their workplace because they don't want to endanger the health of their families. Consequently, A.N. Boukather immediately provided a fleet of cars free of charge at the disposal of the medical sector in Lebanon.
As far as the operations of the group itself, we have worked using different innovative platforms, to keep our team safe. What I can say today, is that this experience helped us connect even more and solidify the bounds and the processes inside the organization. We also provided all our customers with home services for their cars and motorcycles.
This crisis reinforces the connection between team members as well as with our customers. We were faithfully to our moto: “Enjoy moving forward” despite all difficulties.
BL: Could the crisis be overcome?
Nicolas Boukather: There is the resistance spirit of the Lebanese business community that will drive us to rebuild. During the crisis, people owning houses, cars, businesses deleverage and reduce their debts. Somehow, by deleveraging, people and businesses will pick up again only if the right reforms with regards to the public sector are in place. However, unfortunately, so far, nothing has been done as far as the public sector is concerned. We are facing a political class who is not willing to respond to the demands of the Lebanese people for change. The political system sacrificed our people, our economy, hospitals, justice, universities, schools, army, kids, dreams to protect themselves and their personal interest.
BL: Will all cars be electric by 2030?
Nicolas Boukather: Electrification of cars is kicking in gradually for some time now, it will not happen overnight and with regards to Lebanon unfortunately today with the economic crisis the people can’t afford replacing their old cars with newer one. Moreover, Electric cars need the proper infrastructure and in Lebanon we don't have it so far. In view of infrastructure and regulations in place, advanced countries have a plan and gradually most cars will be electrical soon.
BL: A.N. Boukather is famous for its serious inspection on all its pre-owned vehicles by its skilled technicians to make sure that the necessary repairs have been done according to your specifications, does this keenness and accuracy improve your sales?
Nicolas Boukather: Customer service is key to businesses. We have been praised as the best customer care providers for after sales in the region. An excellent customer experience stands or falls with the quality of the after-sales service. We deliver top-notch service and aim to continue on doing so.
BL: What year did you launch your residential projects and consulting services?
Nicolas Boukather: Very long time ago. Lately, we have built small apartments of sqm 100/125. We have quality apartments for rent today and manage family properties across generations for families.
BL: What are your challenges?
Nicolas Boukather: To rebuild Lebanon for the next generations.
BL: What are your comments on Lebanon's insurance companies during this crisis and currency fluctuations? How did it impact your business?
Nicolas Boukather: The insurance companies are waiting for the reports on the explosion of the port and moreover the funds of the insurance companies are blocked in the banks. We need to create a dialogue between the various disciplines and a discipline of dialogue. This is one of the pillars RDCL is working upon. Some success is being made, but more has to be done. Moreover, we cannot rebuild Lebanon without rebuilding a sound central bank, banking system and restore confidence. This will not happen, without an IMF intervention, and establishing the required reforms. This is what the mafia and the militia are not willing to do, and this is what we are fighting against today.
The road is long, unpaved, but Lebanon is worth this fight.
BL: What about competition?
Nicolas Boukather: Lebanon only bright future lies upon a responsible liberal economy and this is the only way forward.
BL: How do you see Lebanon and your group by the end 2021? Are you optimistic for the end of this year?
Nicolas Boukather: It will only depend on the unity of the people of Lebanon, that will have to engage together, united, indifferently from their religion, sect, region or appurtenance around citizenship. The private sector engagement, maturity, and regulation is a must to rebuild. If the private sector engages and unites, I am optimistic but if it doesn't I am not. We need to run elections on time with credible candidates and in the presence of international scrutiny in order to secure a transparent and fair elections.
BL: What about your character?
Nicolas Boukather: I am a bridge builder.
