MOHAMED ELMABRUK Chairman of Lisco

About Dr. El Mabrouk: He has been the chairman of LISCO for the past ten years, since 1995. He is also a university professor. He obtained his PhD from the University of Southern California in 1983, majoring in Civil Engineering.

United World: Could you give us a brief history of LISCO since its inception in 1979?

Dr. El Mabrouk: LISCO is an ISO-certified integrated steel plant, which has a good reputation abroad and has won awards for quality from European bodies and entities. LISCO is fully state-owned compnay. We use local gas as our fuel for production because it is cheap and environmentally friendlier. We import steel pellets as a raw material from countries like Brazil, Canada and Sweden. Today (18 September 2005) is the 26th anniversary of the laying of the foundation stone of this steel complex.

Production in this complex is divided into three main stages, we have three plants for the first stage of production (direct reduction) and their capacity is 1.75 million tonnes (DRI and HBI). The second stage, which involves melting, has a capacity of 1.3 million tonnes of liquid steel. We are currently trying to boost the capacity of this stage to two million tonnes. We have already signed a contract with a foreign partner in this regard and the execution of this project will be finalized in 2006. The Islamic Bank in Jeddah is financing part of this plan, and the other part is from our own resources.

The company, as it stands today, is in good condition. Right from the beginning of 2002, with the restructuring in economic policies of the country, we started improving and even made a profit. In 2004, our profits exceeded 100 million LYD, and I feel that the company is in good shape at the moment. We export more than 60% of our final product of mixed type, while the current policy of the company involves selling most of our reinforced bar production in the local market. The domestic industry consumes about 25% of our flat products, while the rest is exported. Our biggest local client is the General Company for Piping situated in the Libyan coastal town of Benghazi. The rest goes to the private sector and some oil companies. About 50% of our exports are directed to Italy and Spain. The rest is spread around countries like Tunisia, Egypt, China, and France. Our return on exports in 2003 was $165 million, and $275 million in 2004. This year, up until 15th of September, our return so far is $165 million, and expected to reach $250 million by then end of this year. The turnover jumped to more than LYD560 million last year; in 2003, it was about LYD385 million, and so far this year it stands at LYD470 million. Our costs of production have risen this year, due to the prices of imported raw materials (pellets) that have increased by 90%. Meanwhile, prices of final products compared to last year, were reduced by 40%. As for this year's production, we have on this very day reached one million tons of liquid steel.

United World: These are significant changes that you mentioned. How do you manage to keep making a profit?

Dr. El Mabrouk: The good skills of LISCO's management and staff and the cost-effective procedures and strict follow-up systems have all contributed to LISCO's success.

United World: You were mentioning that some of you leading export markets are in the Mediterranean region. Are there any plans to approach the US market?

Dr. El Mabrouk: Years ago, they could not be our clients due to their own economic sanctions on the country. However, last year, we started exporting about 60, 000 tonnes of HBI to the United States through an Italian company.

United World: Are there any plans to increase exports to the US?

Dr. El Mabrouk: Well, everything is possible, and we prefer to diversify our clients as much as we can.

United World: For those US clients that are looking to import steel products, why do you feel they choose LISCO? What is your competitive advantage?

Dr. El Mabrouk: Besides quality, HBI form is only produced in a few countries such as Libya, Malaysia and Venezuela because these countries have cheap energy resources like gas, which is the main advantage.

United World: The plant is still undergoing expansion as you mentioned earlier, in terms of increasing its capacity. How do you attract foreign investors, particularly Americans, to fulfil such projects?

Dr. El Mabrouk: LISCO is a well-organised company, holder of the ISO 9001 certificate. It take a great deal of research and thorough studies before taking main decisions such as expansions and the like. Nevertheless, expansion plans in different but compatible plants such as direct reduction, steel-making and long / flat mills have been finalized; some are already under execution while others are still to be undertaken. These plans aim to increase LISCO's capacity to 2.5 million tons of liquid steel using the same existing infrastructure. All potential partners from the US and elsewhere who show interest and ability to participate in executing these plans will be invited to furnish offers and take part in the tenders.

United World: What kind of investment are you looking for from American businesspeople?

Dr. El Mabrouk: Libya in general is now widely open for all kind of investments and LISCO is no exception. We have been contacted by several foreign investors such as Arcelor, Ispat and others to participate in different forms of collaboration. Therefore, American companies and businessmen are also invited to take part in these programs.

United World: From a relations perspective, do you think that Libyan businesses find it easier to work with other foreign investors, as opposed to American ones?

Dr. El Mabrouk: I don't think there is a problem when it comes to working with Americans. We had a lot of students graduating from the US in the past, and American companies have a history in Libya, so we are familiar with them as a clientele and as a people.

United World: What role do you think the Steel Company can play in Libya?

Dr. El Mabrouk: The steel industry plays a vital role in all societies, during peace or wartime. It has a tremendous effect on everyday life, economically, socially, and even politically. Some of the effects that it has had in Libya are: the creation of thousands of direct job opportunities; the creation of tens of thousands of job opportunities in different fields of downstream industries and related services; the enhancement of the Libyan economy; the diversification of the source of national income; and the provision of all domestic needs from steel products.

United World: What do you feel have been your greatest achievements during your time here?

Dr. El Mabrouk: The first six years were very difficult due to exceptional circumstances like the US and UN sanctions and low export prics in light of the previous exchange rate. Yet, despite the aforementioned factors, we were able to maintain the plant working. Since 2002, things have improved: we have paid back all our loans, our profits are increasing year by year, and I would therefore be satisfied to leave my post in that light.

United World: As someone who has spent time in the US, how do you foresee Libyan-US relations?

Dr. El Mabrouk: My advice for Americans is to learn more about Libya. The media played a rather negative role in introducing Libya to the rest of the world. There are numerous business opportunities in Libya providing a good chance for the Americans and others to invest, particularly in the industrial sector. Therefore, I extend an invitation to visit the country and LISCO in particular to study and get more information about Libya for a better understanding and increasing their chance of doing business here in a competitive manner.

United World: Thank you very much for your comments.

Dr. El Mabrouk: Thank you.