How one man made a fortune from the rubble of Syria’s long war

Fighting has reduced whole neighborhoods of Syria’s third-largest city to ruins. The acres of scrap metal left behind are now being melted into rebar by a steel plant to rebuild demolished homes.

The plant is owned by Samer Foz, a tycoon who built a fortune out of a war that shattered his country.

In a country many businessmen fled as fighting raged, Mr. Foz stayed. He dealt with many sides in the conflict, distributing wheat to Islamic State-held territory and to Kurdish-controlled land. Running businesses that ranged from pharmaceuticals to cement, he stayed close to the government as well, and has lately has been doing business with it.

Mr. Foz has managed the rare feat in Syria’s wartime economy of getting rich without getting sanctioned. As a result, he has become the Assad regime’s most important conduit for business deals.

Mr. Foz plans to build skyscrapers on land in Damascus the regime forcibly acquired from opposition members. Earlier this year, he became the majority shareholder, alongside the government, in the capital’s luxury Four Seasons hotel, where foreign officials stay as they try to provide humanitarian aid and uphold a diplomatic presence.

Along the way, the 45-year-old Mr. Foz has run afoul of the authorities in Turkey, and his relations with the regime have led some diplomats in the region to question why he is able to remain free of Western sanctions.

For the next stage of his career, Mr. Foz wants the furnaces of his Homs steel plant to be a cornerstone of Syrian reconstruction even before a political settlement. He is seeking to enlist foreign investors and donors who generally shun Syria so long as President Bashar al-Assad holds power.

While U.S. entities are barred from making new investments in Syria as a whole, European companies are allowed to do business with Syrian individuals who aren’t members of the government, the armed forces, the Assad family or otherwise designated for sanctions. Last year Mr. Foz’s umbrella company, Aman Group, sponsored an international trade fair in Damascus.

Sipping tea around midnight at a Beirut restaurant with his bodyguards keeping watch, Mr. Foz, who rarely gives interviews, said he was motivated by national interests, not just his own. From sugar production to car assembly and real estate, he said, he aims to draw refugees back to Syria by creating thousands of jobs.

“Once you have made enough money, you begin to think about what you can do for your country,” Mr. Foz said, glancing at text messages brought by an associate with a cellphone. “If I don’t think about reconstructing my country, who will?”

It isn’t possible to estimate Mr. Foz’s net worth, and he won’t disclose it, but Syrians say he has become one of the country’s wealthiest men, with interests that include—in addition to steel, hotels and housing—the manufacture of pharmaceuticals, sugar refining, auto assembly, water bottling and gold mining.

It is an empire he built up after returning from study abroad to a family business his father had started. Mr. Foz’s steel plant employs more than 1,000 Syrians, about 100 Indians and a handful of Russian experts.

Jihad Yazigi, an analyst who has followed Mr. Foz’s career closely as editor of the Syria Report, a Beirut-based business site, is among those who charge that his business empire offers a financial lifeline to the Assad regime.

“If Western governments and companies start dealing with Foz, they will have taken advanced steps toward normalization of the regime,” he said.

Mr. Foz said he needs to work with the bureaucracy to some extent to do business in Syria but denied he was closer to Mr. Assad than other businessmen in the country. The government didn’t respond to questions about Mr. Foz.

The businessman, compact in stature with blue eyes and slicked-back hair, said he tries to stay away from the public eye. “The less you appear,” he said, “the fewer mistakes you make.”

Born in 1973 in the Mediterranean coastal city of Latakia, the son of a pharmacist, he grew up during a time when the ruling Assad family introduced policies to stimulate the economy, spawning an urban business elite. In 1988 his father, Zuheir, established a business called Foz for Trading, which evolved into the Aman Group that is now the center of the family operation.

Samer Foz studied at the American University of Paris in the early 1990s and says he also took courses at Boston and San Diego universities. Though France gave him “the best years of my life,” he said, it was the U.S. that stirred his ambitions. “In the U.S., you can go very big. In France you can’t,” he said. “Everything is petit, petit, petit.”

Returning to Syria, Mr. Foz expanded the family business by importing agricultural machinery and cement. Lacking connections, it didn’t grow much. “We were second-rate, third-rate businessmen,” he said.

The outbreak of Syria’s political strife in 2011 changed that. Fighting drove out businesses and left a chaotic landscape that favored nimble entrepreneurs who could stay on the good side of the regime and assorted rebel groups.

Economy on the Rocks

Syria’s seven-year war has hammered the economy.

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More than 500 businessmen were kidnapped for ransom by rebel fighters in the first half of 2012, according to Fares Shehabi, chairman of the Syrian Federation of Industry. As business executives fled Syria, gone were the upholders of Aleppo’s centuries-old soap-making tradition, its legendary chocolatier families and thousands of textile businesses that produced goods such as expensive silks and Christian and Jewish liturgical garments.

The flight of so many business leaders opened opportunities Mr. Foz exploited by dealing with various sides in the Syrian conflict. “I worked for four years with no competition at all,” Mr. Foz said.

Western governments sanctioned some businessmen who stayed in Syria, barring companies and citizens from dealing with them and freezing their overseas assets. They included one of Syria’s most prominent businessmen, Rami Makhlouf, a telecommunications magnate and Assad cousin, who the EU said “bankrolls the regime.” Mr. Makhlouf has unsuccessfully appealed his inclusion on the sanctions list. Other businessmen have been sanctioned for facilitating Islamic State oil sales or financing pro-government militias.

As Mr. Foz’s public profile has grown, several European embassies in Beirut have suggested in meetings among ambassadors that Mr. Foz should be sanctioned for his closeness to the regime, according to Western diplomats. No EU member has formally suggested his name, the first step in the sanctions process. Mr. Foz said he has properly been spared sanctions because he invests in industries unrelated to the regime’s military affairs, and when he distributed food commodities it was as humanitarian assistance.

“If I am sanctioned, the U.N. should be sanctioned,” he said.

Mr. Foz once bought old, vermin-infested wheat from Islamic State, stored it in Turkey, changed the manifest to pass the wheat off as Russian, and sold it back to areas in northern Syria, according to a man in Latakia with a close knowledge of Mr. Foz’s business.

Mr. Foz said the story was false, concocted by rivals to harm his reputation. “This is pure hatred among businessmen,” he said.

Mr. Foz moved his wife and children to Turkey five years ago to shield them from the Syrian rebellion. He gained citizenship in Turkey by investing there.

Syrian businessman Samer Foz seeks foreign investment to rebuild neighborhoods such as this one in Homs.
Syrian businessman Samer Foz seeks foreign investment to rebuild neighborhoods such as this one in Homs.

In late 2013, the body of an Egyptian-Ukrainian businessman who had failed to deliver a $14 million wheat shipment to Mr. Foz surfaced in Turkey. Turkish authorities arrested Mr. Foz on suspicion of having ordered the murder of the businessman, Ramzi Matta, and tampering with evidence.

Mr. Foz was freed in May 2014. He said he was cleared after the second of two hearings. A senior Turkish official said Mr. Foz had put up $500,000 bail.

The official said about six months after Mr. Foz’s release, an Istanbul court sentenced him to four years and two months for evidence tampering. The sentence has been suspended pending appeal, according to the official, whose account squared with Turkish media reports at the time. Mr. Foz denied he faced such a sentence.

According to the Turkish official, Mr. Foz still faces charges related to suspicion of ordering the murder, and he comes regularly to Turkey to attend court proceedings.

Mr. Foz said he travels regularly to Turkey for business. He said he has moved his family to Dubai.

The Syrian conflict’s economic destruction, estimated by the World Bank to total $226 billion through 2016, created a climate hostile to businessmen other than those who spent the war years inside the country nurturing contacts in the regime. Mr. Foz signaled his ascension into the Syrian commercial elite by acquiring the upscale Orient Club in Damascus and a majority stake in the capital’s Four Seasons hotel, bought from Saudi billionaire Prince al-Waleed bin Talal.

Homs, Syria, once a rebel stronghold, was pummeled in a three-year bombing campaign.
Homs, Syria, once a rebel stronghold, was pummeled in a three-year bombing campaign.

Last year, in Mr. Foz’s most explicit partnership with the regime, he entered a high-profile venture with the government of the administrative district around Damascus. He acquired the right to construct three towers and five smaller units on land foreign diplomats describe as having been expropriated from people who opposed the regime at the beginning of the uprising.

The previous homeowners were paid, but too little to afford units in the towers that will be built, said Western officials working on Syrian affairs. Mr. Foz defended his involvement in the development—formally called Marota City but often called Project 66, after a presidential decree—saying the demolished houses had been built without permission and it wasn’t he who expropriated them.

The government didn’t respond to questions about the project.

Last year, the regime denounced a prominent Syrian businessman named Imad Ghreiwati after he moved to Dubai. Pro-regime militiamen occupied a cable manufacturing plant Mr. Ghreiwati owned and began looting machinery, after which Mr. Ghreiwati asked Mr. Foz to intervene, according to a person familiar with the events. Mr. Foz bought the factory at a deep discount.

Mr. Foz recently landed his first contract with a European-linked company, a deal his employees valued at $250 million. The partner company, Tunisian-based Biomass Industries Associates, will purchase machinery from German sugar producer BMA Group and ship it to a Syrian sugar producer owned by Mr. Foz.

Biomass didn’t reply to requests for a comment. BMA Group confirmed it had a contract to supply the Tunisian company with equipment and was aware the machinery would be shipped to Syria. Through deals such as this one, Mr. Foz hopes to bring foreign investment to Syria without running afoul of the international sanctions that constrain reconstruction.

A sugar plant being built in Syria’s Homs province. Syrian businessman Samer Foz is acquiring German-made plant machinery via a Tunisian company.
A sugar plant being built in Syria’s Homs province. Syrian businessman Samer Foz is acquiring German-made plant machinery via a Tunisian company.

In Homs, which became a rebel stronghold and was smashed into submission by a three-year regime bombing campaign, posters next to the charred remains of housing portray Mr. Assad waving and proclaiming: “Together we rebuild.”

At the Homs steel plant, which was out of commission when Mr. Foz acquired it last year, three of the five furnaces now are operating.

“Reconstruction,” said Mr. Foz, is “about bringing back people and giving them jobs. It’s about getting the wheels turning.”

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The flight of so many business leaders opened opportunities Mr. Foz exploited by dealing with various sides in the Syrian conflict. “I worked for four years with no competition at all,” Mr. Foz said.

Western governments sanctioned some businessmen who stayed in Syria, barring companies and citizens from dealing with them and freezing their overseas assets. They included one of Syria’s most prominent businessmen, Rami Makhlouf, a telecommunications magnate and Assad cousin, who the EU said “bankrolls the regime.” Mr. Makhlouf has unsuccessfully appealed his inclusion on the sanctions list. Other businessmen have been sanctioned for facilitating Islamic State oil sales or financing pro-government militias.

As Mr. Foz’s public profile has grown, several European embassies in Beirut have suggested in meetings among ambassadors that Mr. Foz should be sanctioned for his closeness to the regime, according to Western diplomats. No EU member has formally suggested his name, the first step in the sanctions process. Mr. Foz said he has properly been spared sanctions because he invests in industries unrelated to the regime’s military affairs, and when he distributed food commodities it was as humanitarian assistance.

“If I am sanctioned, the U.N. should be sanctioned,” he said.

Mr. Foz once bought old, vermin-infested wheat from Islamic State, stored it in Turkey, changed the manifest to pass the wheat off as Russian, and sold it back to areas in northern Syria, according to a man in Latakia with a close knowledge of Mr. Foz’s business.

Mr. Foz said the story was false, concocted by rivals to harm his reputation. “This is pure hatred among businessmen,” he said.

Mr. Foz moved his wife and children to Turkey five years ago to shield them from the Syrian rebellion. He gained citizenship in Turkey by investing there.

Syrian businessman Samer Foz seeks foreign investment to rebuild neighborhoods such as this one in Homs.
Syrian businessman Samer Foz seeks foreign investment to rebuild neighborhoods such as this one in Homs.

In late 2013, the body of an Egyptian-Ukrainian businessman who had failed to deliver a $14 million wheat shipment to Mr. Foz surfaced in Turkey. Turkish authorities arrested Mr. Foz on suspicion of having ordered the murder of the businessman, Ramzi Matta, and tampering with evidence.

Mr. Foz was freed in May 2014. He said he was cleared after the second of two hearings. A senior Turkish official said Mr. Foz had put up $500,000 bail.

The official said about six months after Mr. Foz’s release, an Istanbul court sentenced him to four years and two months for evidence tampering. The sentence has been suspended pending appeal, according to the official, whose account squared with Turkish media reports at the time. Mr. Foz denied he faced such a sentence.

According to the Turkish official, Mr. Foz still faces charges related to suspicion of ordering the murder, and he comes regularly to Turkey to attend court proceedings.

Mr. Foz said he travels regularly to Turkey for business. He said he has moved his family to Dubai.

The Syrian conflict’s economic destruction, estimated by the World Bank to total $226 billion through 2016, created a climate hostile to businessmen other than those who spent the war years inside the country nurturing contacts in the regime. Mr. Foz signaled his ascension into the Syrian commercial elite by acquiring the upscale Orient Club in Damascus and a majority stake in the capital’s Four Seasons hotel, bought from Saudi billionaire Prince al-Waleed bin Talal.

Homs, Syria, once a rebel stronghold, was pummeled in a three-year bombing campaign.
Homs, Syria, once a rebel stronghold, was pummeled in a three-year bombing campaign.

Last year, in Mr. Foz’s most explicit partnership with the regime, he entered a high-profile venture with the government of the administrative district around Damascus. He acquired the right to construct three towers and five smaller units on land foreign diplomats describe as having been expropriated from people who opposed the regime at the beginning of the uprising.

The previous homeowners were paid, but too little to afford units in the towers that will be built, said Western officials working on Syrian affairs. Mr. Foz defended his involvement in the development—formally called Marota City but often called Project 66, after a presidential decree—saying the demolished houses had been built without permission and it wasn’t he who expropriated them.

The government didn’t respond to questions about the project.

Last year, the regime denounced a prominent Syrian businessman named Imad Ghreiwati after he moved to Dubai. Pro-regime militiamen occupied a cable manufacturing plant Mr. Ghreiwati owned and began looting machinery, after which Mr. Ghreiwati asked Mr. Foz to intervene, according to a person familiar with the events. Mr. Foz bought the factory at a deep discount.

Mr. Foz recently landed his first contract with a European-linked company, a deal his employees valued at $250 million. The partner company, Tunisian-based Biomass Industries Associates, will purchase machinery from German sugar producer BMA Group and ship it to a Syrian sugar producer owned by Mr. Foz.

Biomass didn’t reply to requests for a comment. BMA Group confirmed it had a contract to supply the Tunisian company with equipment and was aware the machinery would be shipped to Syria. Through deals such as this one, Mr. Foz hopes to bring foreign investment to Syria without running afoul of the international sanctions that constrain reconstruction.

A sugar plant being built in Syria’s Homs province. Syrian businessman Samer Foz is acquiring German-made plant machinery via a Tunisian company.
A sugar plant being built in Syria’s Homs province. Syrian businessman Samer Foz is acquiring German-made plant machinery via a Tunisian company.

In Homs, which became a rebel stronghold and was smashed into submission by a three-year regime bombing campaign, posters next to the charred remains of housing portray Mr. Assad waving and proclaiming: “Together we rebuild.”

At the Homs steel plant, which was out of commission when Mr. Foz acquired it last year, three of the five furnaces now are operating.

“Reconstruction,” said Mr. Foz, is “about bringing back people and giving them jobs. It’s about getting the wheels turning.”

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