Chabros International Group: A World of Wood

Author :

Paul W. Beamish, Bassam Farah

Pages :

16

Product Type :

Case

Reference # :

9B10M100

Teaching Note :

8B10M100

Institute:

Ivey Publishing

Setting:

Lebanon;Middle East;North Africa, Medium

Year:

2010

Keywords:

International Expansion; Market Entry; Growth Strategy; Exports, Entrepreneurship, General Management/Strategy, International

Summary/Abstract:

The Chabros International Group case examines how a Lebanese multinational wood company confronts a drastic drop in its largest subsidiary's sales after 2008's global economic crisis. Antoine Chami, Chabros's owner and president, was reviewing his company's 2009 end-of-year financial statements and, in particular, a 30 per cent drop in sales in Dubai. In 2007, a year before the global economic crisis, Chami had invested more than $11 million to acquire and expand a sawmill in Serbia to meet Chabros's growing lumber sales demand. With a much higher capacity to produce lumber and a much lower probability to sell it, Chami had to decide what to do to overcome this challenge. Should he close parts of his Serbian sawmill? Should he try to boost his company's sales to use all of his sawmill's available capacity? If so, should Chabros try to increase sales within the countries where it already operated (UAE, Saudi Arabia, Qatar, Oman, Egypt) or should it expand into a new country (Algeria, Bahrain, Iran, Iraq, Jordan, Kuwait, Libya, Syria, Tunisia)? Would Morocco, among other countries, be the best country to expand into? Was it the right time to embark on such an expansion?