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The Lebanese who are making it big in Brazil

A clothes shop owned by Jamil Fadlallah in Sao Paulo.

BEIRUT: Jamil Fadlallah left Lebanon in 1979 without any money or legal papers, seeking an escape from the Lebanese Civil War, then in its fourth year.

“All I wanted back then was to leave in any way, since it was not possible to succeed in Lebanon in such circumstances,” he told The Daily Star.

Like millions of Lebanese, Fadlallah headed west to leave behind the economic unrest, political turmoil and long periods of security instability that plague Lebanon. While some émigrés had the support of relatives where they settled, Fadlallah suffered for years in Brazil before finding success.

“In addition to my job in a factory during daytime, I used to work in sewing for hours at night over seven years for me to be able to start with my own business,” he said. “I had to borrow money from some relatives in addition to my salary to start operating independently.”

Having spent 35 years in Brazil, Fadlallah is now the owner of a well-known sports clothes factory in Sao Paulo with over 450 employees and a huge turnover.

“I finally managed to succeed, with all the hard work and persistence I had but I must admit it was not easy at all,” he said. “Leaving your family behind to an unknown future and destiny is the worst feeling ever.”

While Fadlallah says he would have loved to live and work in Lebanon, the dire economic situation prevents him from returning.

“The Lebanese market is too small, and it is hard to make a good profit,” he said.

“We got used to living in Brazil and it is even easier to work there than in Lebanon.”

It is a story repeated across Brazil, reportedly home to nearly 7 million people of Lebanese descent.

Miled Khoury, owner of Sawary Jeans factory in Sao Paulo, left Lebanon over 20 years ago and started his business in Brazil. Khoury was luckier than Fadlallah because some of his family had already relocated to Brazil years before he moved there.

“I was lucky that my brother was already there and has supported me in many ways to start with my business there,” he said. “I am very satisfied with the outcome after 21 years of working in Sao Paulo.”

Following his great success in Brazil, Khoury tried to expand his business to Lebanon in 2005, but blames the political and security unrest for a poor result, which prompted him to end his operations in Lebanon in 2007.

“I opened shops in ABC Mall, Sarba and in Zghorta, but I did not succeed due to the different political and security problems that prevailed in the country at the time,” he said.

Despite finding success in the South American country, Lebanese-Brazilian industrialists interviewed by The Daily Star say doing business in Brazil has its own challenges.

“The workforce in Brazil is very expensive, especially if you want to employ skilled laborers,” Khoury said. “We pay a salary of around $700 on average for each laborer, but the employee costs us no less than $1,400 in reality because we pay part of his national social security fee and retirement plan.”

Khoury added that employers were also responsible for paying an additional month’s bonus salary for each worker, because the law in Brazil forced businesses to pay 13 moths’ salaries instead of 12 per year.

“Moreover, every laborer has the right to take one paid month off,” he said.

Khoury’s remarks were echoed by Fadlallah, who said the labor party ruling the country supported workers a lot and gave them many rights.

“If a laborer is absent for one reason or another, we cannot even complain,” he said.

Fadlallah added that one of the big challenges facing factories operating in Brazil was the difficulty of finding skilled laborers.

He explained that Brazilian women used to work mainly in agriculture in the past. But when the industrial sector started to flourish, these women shifted to work in factories. Fadlallah said that later, many women shifted to other sectors due to the difficulty and 12-hour days of sewing work.

“This is why female sewing laborers cost four times more than any other employees in Brazil,” he said. “They cost much more than sewing laborers in China for instance.”

The labor challenges, on top of a heavy tax burden, have exposed the industrialists to heavy competition from China and the United States.

“The high prices of products in Brazil have encouraged many families to buy their needs from the United States when they travel for vacation,” said Toni Etter, another owner of clothes and accessories factory and retail shops that employ over 350 workers.

With the rising cost of production in Brazil, many industrialists have resorted to importing most of their products from China.

“I used to manufacture most of my products in Brazil, but now we import much more than what we produce in our factory because the quality is better outside and it is cheaper to import due to the high cost of skilled laborers,” Etter said.

“Moreover, we do not have the same technology that they have in China,” he added.

Fadlallah also imports around 60 percent of his items from China.

This growth in imports comes despite high custom duties.

“We import leather jackets from China and customs cost us around 90 percent, while sometimes it even reaches 100 percent,” Khoury said.

“We still make some profit even with all the taxes on jackets because it is a sophisticated product, and it is not easy to produce this item in Brazil,” he added.

Lebanese industrialists operating in Brazil said they did not export their products to Lebanon because their high cost of production impeded their ability to compete in the Lebanese market.

“Moreover, if we export to Lebanon, Lebanese importers will have to incur customs fees, and won’t be able to make any profits,” he said.

But this could change soon, as Foreign Minister Gebran Bassil announced the opening of free-trade negotiations with the South American trade bloc, Mercosur, during his recent visit to Brazil.

Guilherme Mattar, director of the Brazil- Lebanon Chamber of Commerce, said a free-trade agreement between Brazil and Lebanon would benefit both countries.

“Being such a big economy, it would be very important for Brazil to buy more Lebanese products. With a free-trade agreement there would be less import duties, so Lebanese products would be more competitive on the Brazilian market,” he said.

Mattar cited Lebanese wine, which, he said, is of “an outstanding quality.”

“But if it arrives into the marketplace and retail stores at a higher price than the French wine, which have invested so much more in image and are already established in the market, then it gets difficult to successfully promote the Lebanese wine,” he said.

Mattar said that one of the main challenges facing the Lebanese in Brazil was a lack of cooperation among each other.

“I believe that the Chamber of Commerce, Agriculture and Industry must work on boosting cooperation among the Lebanese diaspora by formulating a policy to encourage them to cooperate together,” he said.

A memorandum of understanding was signed over two weeks ago between the Chamber of Beirut and Mount Lebanon and the Brazil- Lebanon Chamber of Commerce (CCBL) aimed at developing economic relations between Lebanese and Brazilians at various levels, especially regarding increased trade and an exchange of experiences and cooperation at the regional level.

It also aims to enhance communication and cooperation in the private sector and to organize delegations to explore business opportunities in both countries.

 
A version of this article appeared in the print edition of The Daily Star on July 28, 2014, on page 5.

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Summary

Jamil Fadlallah left Lebanon in 1979 without any money or legal papers, seeking an escape from the Lebanese Civil War, then in its fourth year.

Like millions of Lebanese, Fadlallah headed west to leave behind the economic unrest, political turmoil and long periods of security instability that plague Lebanon.

It is a story repeated across Brazil, reportedly home to nearly 7 million people of Lebanese descent.

Miled Khoury, owner of Sawary Jeans factory in Sao Paulo, left Lebanon over 20 years ago and started his business in Brazil. Khoury was luckier than Fadlallah because some of his family had already relocated to Brazil years before he moved there.

Despite finding success in the South American country, Lebanese-Brazilian industrialists interviewed by The Daily Star say doing business in Brazil has its own challenges.

Khoury added that employers were also responsible for paying an additional month's bonus salary for each worker, because the law in Brazil forced businesses to pay 13 moths' salaries instead of 12 per year.

Mattar said that one of the main challenges facing the Lebanese in Brazil was a lack of cooperation among each other.


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