Marcopolis presents the Libya Report focused on the investments, doing business, economy and other topics featuring interviews with key executives and government officials. The sectors under review are industry, telecom, banking sector, ICT, investments and more.
Developed in conjunction with Ext-Joom.com
Chairman of Libyan Iron & Steel Company (LISCO) Dr. Mohamed Abdulmalik Elfigih discusses the outlook for the global steel industry, challenges and the role of LISCO in the reconstruction of Libya.
"The steel sector is incredibly important to us as we are a steel manufacturer. We have to consider the local market and the international market. The international steel market is in a very bad state, the prices are declining a lot. We can say that there is almost no margin for profit. The problem is that the prices for finished steel products have greatly decreased. While unfortunately on the other hand the price of the raw material is still high in comparison. This means that the profit margin is really squeezed," explains Dr. Elfigih.
"When we look at the local market in Libya; we must consider that this is a transitional period, if we compare 2013 with 2012, the local market has improved a great deal, with increased demands every month. We also must consider that Libya in general will have increased demand. I consider Libya a virgin country in terms of infrastructure, so this means we need a lot of projects. For example I think we need thousands of houses, a lot of roads, bridges, hospitals, schools and social and cultural organisational buildings. There is definitely going to be increased demand. We can see this increase in demand just from last year to this year. I think the demand for steel products in general could reach 3 million tonnes per year; I think at least 30% of this will be concentrated on rebars for the construction programs."
"Last year I think our share on the local market was not more than 50% but this year I expect it to be 80%."
When asked about the competitiveness of the steel industries. Dr. Elfighih believes in the competitive advantage of the steel industry.
"Of course the price of energy in Libya is considered to be very cheap in comparison with international prices. If we talk about the prices of HFO, oil and natural gas, they are much cheaper here than internationally. This gives us a big advantage over our competition. Now I do think the country is reconsidering these prices and is going to raise them, although not to the same level as international prices. This of course will have an effect on our costs and our competitiveness; it will be a new challenge to squeeze our costs to get an acceptable profit margin. It will challenge us to better utilise our resources such as man power, so that we can make a profit and continue selling our products nationally and internationally. However all countries are supporting their local industries . We should also get support by having a special energy prices."