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Libyan State-Owned LAICO Has $1.2 bn. Worth of Investments in 21 Countries. With its location in the Mediterranean, and in the middle of Africa, facing Europe and Asia it is easy for Libya to play a very important role in the continent as a connecting channel between Africa, Europe and Asia, particularly in terms of transporting technology from the West to Africa, by having free zones to transit technological or conventional goods from Europe and Asia to Africa.

This view was expressed by Bashir M. Elmadani, Managing Director of the Libyan African Investment Company (LAICO) in an interview with as he explained the country's correct position in regional and international geo-economical or geopolitical terms. He said this position would develop Africa in many ways.

LAICO is well known in Africa, as it is participating in over 21 countries in the black continent with investments mainly in the real estate and tourism sectors that amounts to approximately US $1.2 billion.

How about LAICO's economic effect at present on Africa when it comes to direct and indirect effects of its presence in the countries it is involved in, Mr Elmadani said that If one were to take the number of employees in the countries where the company has an investment, it actually participates in the social employment of these countries.

'It is our investment and money, but these countries get a lot of benefits because it is their location,' he said. Explaining these benefit he mentioned certain tax benefits on the services, employment, the improvement of their economy etc. 'We try to participate in the development by doing what the African governments themselves would like to do in their own countries,' he said.

When it comes to its investment strategy, does LAICO depend on the situation, or invest and sell when the investments reach their value and then reinvest the profits in Africa.

He said LAICO acts as other investors do. 'Every day they are thinking about their investments, how to invest, find and invest in a good opportunity, and find the opportunity to sell and invest somewhere else or in another location to increase their investment for the benefit of the investors themselves,' the Libyan company's managing director said.

Then he went on to explain its strategy, which is to depend on the viability of the project itself. 'Before we start any investments we have to evaluate the viability of the project or investment and carry out a feasibility study. We work with the top four advisory firms to find good business opportunities.

'Our decisions will be made based on the results of these studies all over Africa. Moving any investment from one location to another or from one business to another depends entirely on the viability study,' he added.

In simple terms, LAICO's strategy is to increase its investment from time to time and to create more investments. 'We are not looking for a cash distribution of the returns right now; we are looking to increase the base value for the investment for the new generations. This is our goal,' he said.

Asked whether the 2011 events in Libya that eventually ended with the ousting of the Libyan dictator Muammar Gaddafi, had any effect on LAICO's operations, Mr Elmadani said that the effect was minimal because what the state company has in Africa is a good ownership.

'We have our certificate of ownership. We manage our projects by ourselves as a company. We were not greatly affected. At the beginning of 2011 we were away from our investments, some countries put their management teams to manage the investments because of the United Nations sanctions, but this was ok because we have Libyan managers in among our participations in Africa.' He added that the countries themselves helped them a lot to protect Libyan investments and to keep them away from any interference, particularly in terms of cash in banks or transfers.

Investing abroad does not mean that LAICO will not invest in Libya. Every sector has its duties, he said, and LAICO's duty is to invest in real estate and tourism in Africa.

'Our goal is to build an investment that will be a very good asset for the new generations of Libya, which doesn't mean that we aren't investing in Libya, because if we increase our assets in Africa, someday it could, for example, be a substitute for our income from oil and gas.

'We have to build our investment abroad. It doesn't mean that the other companies that sponsor investments in Libya are not investing in Libya, they are investing. However, this is not our duty, the LAICO chief said.

The revolution in Libya obviously affected the profitability of LAICO's investments abroad, especially when the United Nations froze Libyan assets.

Mr Elmadani said that in 2011 most of the Libyan company's participation was stopped, and even joint ventures were affected. Nevertheless, if one were to look at the investments in real estate, the appreciation is very high and this is what LAICO is concentrating on.

'In the future we are going to evaluate most if not all of our investments in Africa and we have to make sure that those investments have good returns or we will have to replace them with a good investment opportunity to generate a better income,' he said.

Do you have any figures for your profit targets for 2013 and 2014? When it comes to mentioning figures as targeted profits for 2013 and 2014, Mr Almadani said: 'I think we are not going to accept less than 15%. This is the minimum.

'I know that the hotel sector is profitable and can generate 20 ' 25% of net profit, but because the capital expenditure was too high in the old regime there is an over cost of the construction on the investments and therefore the returns will be lower.' Pre 2011 revolution it was different, as most of the projects were under construction and the capital expenditure on those investments was high. He also pointed out that the management was not satisfactory and thus 'it was not a good measure.'

2013 - The Tripoli Post

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Publication:The Tripoli Post (Tripoli, Libya)
Geographic Code:60AFR
Date:Aug 6, 2013
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