|Laying tile, from Lebanon to Syria and back again - mosaic business looks to Grow on the web|
|Plans include a new shop in Beirut's Downtown area, set to open this summer
Tony Assi is quite a resourceful young entrepreneur. In 2000, he launched what is arguably the country's most popular e-commerce site, aldoukan.com, which specializes in Lebanese merchandise. Then, in June 2003, he created a line of mosaics called Mosaic Marble.
What makes this latest venture interesting is that it involved opening a small factory - in Syria. Assi said that he decided to locate the factory there in order to take advantage of Syria's low production and labor costs.
However, soon afterward the decision was made to relocate the factory to Lebanon, because the raw materials that they use are much cheaper here. "In Lebanon marble costs 25 percent less than it does in Syria, due to the high custom duties there," Assi said.
Assi said he got involved in mosaic production after receiving countless inquiries about them on the Aldoukan Web site, particularly from South Africa, France and Greece. Assi started out by sourcing mosaics from the local market, but seeing that they had huge potential, decided to get into the production side of things. Since opening a factory in June last year, unit sales have increased by almost 10 percent every month.
He added that just 10 percent of sales were generated from his two e-commerce sites, aldoukan.com and mosaicmarble.com. "In this field, the internet is not a really good tool," he said, adding that the vast majority are sold through Aldoukan's agents abroad. "Most of our customers are from South Africa, Greece and Russia - they love mosaics in Russia, especially the ones with Christian motifs," he said. "We also have a lot of customers in Saudi Arabia and Kuwait."
To accommodate the growing demand, the factory's workforce went from five to 65. Even so, Assi said that productivity was way below the break-even point, partly because the workers cut the small fragments used to create mosaics by hand. The factory currently produces the equivalent of 400 square meters per month of mosaics. The aim is to more than double output to about 1,000 square meters. Assi is looking to purchase Italian machinery that would "increase production and introduce new lines." About $400,000 is being invested in the new factory, which is scheduled to open in mid-April, in Beirut. That is on top of the $150,000 already invested in stock and the factory in Syria.
For the moment, sales have been restricted to exports simply because the company has not established a channel through which to sell locally. Interestingly, all orders are delivered by a courier service - despite the high cost of about $6 per kilo - because customers "want them immediately," Assi said. Given that the mosaics weigh anywhere from 22 to 150 kilos, transportation costs alone end up being $132 to $900. The best-selling mosaics are priced at around $700 and are roughly two square meters in size. However, prices range from $100 for small decorative pieces to $10,000 for large floor installations. Assi admitted that his designs are not original, but replicas of popular geometric patterns and paintings.
In an attempt to introduce the line to the local market, Marble Mosaic is opening a gallery Downtown. The 110-square meter gallery, will open this summer. "About $100,000 is being invested in the shop," Assi said. He added that the plan was to "open a shop in each town in the country" provided the Downtown outlet does well.
Beirut,04 05 2004
The Daily Star