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Mourad Aoun

LEBANON - Transport

The Movers

CEO, Net Holding

Bio

Mourad Aoun has over 25 years of experience in sales management, leadership, and strategic development. He started Net Holding in 1994 by representing an international network, “Skynet Worldwide Express.“ The group grew to own and manage nine subsidiaries in the express and freight forwarding industry in the Middle East.

"Being a Levant-based company, we were keen on seeing the Beirut Sea Port become a gateway to the region."

How has Net Holding evolved since it was established?

We started off in 1994 with SkyNet, an international express company employing three people. Starting small, we initially grew through more of a personal pursuit than rationalized decisions to build a business providing much needed service in a post-war Lebanon; it was a period of heavy rebuilding and prosperity. I think it was something I was wired for in terms of my desire to build a new business model for freight and express services in Lebanon and the region. We grew organically and started thinking more strategically. In 1998, we expanded our line of services to include freight forwarding. As the freight forwarding side of the business developed, we felt the need to separate the two lines and in 2002 we created Net Logistics, a specialized freight forwarding entity handling air, land, sea freight, warehousing, and logistics. With the two lines of business in place, we set out to widen our reach opening up operations into Syria and developing our Syria-Lebanon business. Meanwhile, we worked on developing our brand regionally. As a young company, you are the product of your environment and you should choose that environment very carefully. We wanted to have scale in the areas we chose and Dubai was a very important growth engine for us. We opened our first sales office there in 2007. By 2011 we were implementing a growth strategy, opening in Jordan, another key market of ours. The Iraqi market soon followed suit in that same year where we established operations in Erbil, Basra, and Bagdad. As Net Logistics solidified its Levant base, we started looking at tie ups to ramp up our front end delivery. In 2008, Net Holding signed on for TNT Express representation in Lebanon, a move that propelled Net Holding to be a major express and logistics player in the region. Today, we number more than 175 employees and our company has been growing steadily at an average rate of 40% per year based on a strategic mix of organic and inorganic growth and a carefully thought out market penetration plan. On the local scene, 2007 represented an opportunity for us to be part of the Beirut Port Free Trade, and we opened up our 4,000-sqm warehouse within the zone that same year. It is a project we believe in, despite several setbacks, mainly due to the volatility of our region.

What are the advantages of the free zone at the Port of Beirut?

Being a Levant-based company, we were keen on seeing the Beirut Sea Port become a gateway to the region; you could say we are foreseeing a mini Jebel Ali Free Zone for Lebanon. With giants like Maersk and CMA bringing large short-transit vessels into Lebanon, we strongly believe in the need for a free zone Levant hub serving Syria, Jordan, and Iraq (Iraq being the biggest market). It is a market that could potentially include more than 50 million people, strengthen economic ties, and facilitate the exchange of goods, capital, and information. We remain very committed to this project despite regional instability, and we are optimistic that things will definitely change given greater stability.

“Being a Levant-based company, we were keen on seeing the Beirut Sea Port become a gateway to the region.”

What sectors of the economy represent the bulk of your clients?

We cater to a wide range of sectors and companies from large multinationals in the oil and gas sectors to specialized tech and telecom firms, right down to retail and individual consumers. In terms of geographic spread, I think of Lebanon, Syria, Iraq, and Jordan as a single market. While freight movement in Syria at this time is almost at a standstill, we are servicing a large Jordan-based Iraqi community that found itself relocating to Jordan due to the drawn out in-fighting in Iraq. We also service a large client base of Lebanese companies operating out of Jordan and Iraq.

Why would Lebanon be a good a hub?

One factor of course is Lebanon’s geographic location. Sea freight coming from Europe to Iraq can go through the Suez Canal and around the Arabian Peninsula, or from the Turkish Port of Mersin into northern Iraq. Beirut, however, offers a much shorter transit line. Lebanon also boasts a high performing and educated workforce of professionals and skilled workers. And, with its strong foothold in finance and insurance services, it is a highly desirable location for regional businesses and multi-nationals.

You offer a wide range of services. Which of these are most significant for your overall operations?

Net Holding provides express services through TNT Express and SkyNet Worldwide Express, and as Net Logistics we provide air, sea, land freight, warehousing, and logistics services. Our services are equally important to us because our individual and business clients need any or a combination of two or more of our services, but the greater part of our business remains in sea and land freight. Our goal is to offer our clients a complete range of cargo and express transport solutions with timely and cost-effective delivery. We have also focused on developing our multi-modal freight forwarding services, benefiting mostly our SME clients as it offers a mix between low-cost shipping and fast, but much more expensive, air transport.

Are you planning to expand into other areas?

Our default position is to look for opportunities of growth in fast growing markets where we can bring in added value. We have been focusing on expanding our Iraq operation. With its huge oil and gas sector, it constitutes a large part of our business.

Why do you lease your fleet?

In order to lower our operational and maintenance costs, we believe that leasing aligns with our strategy of always operating a more current fleet responsive to the changing needs of the market.

What are the challenges faced by the Lebanese logistics sector?

The local Lebanese market will certainly benefit from decentralization. Beirut is still the only major viable business hub in the country, which is jacking up real estate costs in the city, which then translates into higher costs for freight transport, logistics, and warehousing. People aren’t used to outsourcing their warehousing, stock management, and distribution and handing it over to a third party and this, we find, is an unexpected advantage. This lack of consumer maturity in terms of logistics and warehousing options is being faced with a pressing need for businesses to cut costs, and the local market is fast realizing the advantages of third party outsourcing. Another, more serious challenge that has surfaced in the last two years is the situation in Syria. Despite the inherent dangers that being there entails, we are still providing our services within Syrian territory and while we have considerably scaled back our operations, we still maintain our office in Damascus.

What is your outlook for the logistics sector in Lebanon in the near future?

Stability is the be all and end all for our region. We can’t talk about economic prosperity without a more stable Middle East. If we are to dream of claiming, or reclaiming, the title of distribution or gateway role for our freight transport sector, things have to calm down in our region. Borders have to open up and confidence in a long-term, stable political and socio-economic context must be re-established.

© The Business Year – November 2013

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