German companies ready to seize business opportunities in Libya

German companies see promising business opportunities in Libya. Many of them hope to land some highly profitable contracts following the fall of the Gadhafi regime. But international competition is on the ríse.

With its huge oil and natural gas reserves, Libya is viewed by German businesses as a trade partner with huge potential.

German Economy Minister Philipp Rösler and Foreign Minster Guido Westerwelle have already visited the country and agreed to provide economic support to the transition government.

Hans-Peter Merz from the Middle Ruhr Valley Chamber of Industry and Commerce points to the huge reconstruction needs in Libya following the fall of Gadhafi regime.

"There has been significant destruction as a result of the fighting," Merz said. "Much needs to be rebuilt, so there will be plenty of business opportunities."

Opportunities galore

Before the fall of Gadhafi, Libya annually imported goods worth 25 billion dollars (19 billion euros). Trade with Germany averaged around one billion euros, generated largely by some 40 companies including Bilfinger Berger, E.On, RWE and Siemens.

"The construction and consumer goods sectors offer plenty of business opportunities," Merz said. "Libya has no consumer goods industry to speak of."

While the country has a potentially attractive agriculture sector, especially for fruits, it requires help in marketing these products in Europe, offering further business opportunities. Over the years, it has also shown healthy demand for agriculture equipment, particularly from Germany.

Müller International from the western town of Rommerskirchen, for instance, has been delivering equipment, such as tractors and combines, to Libyan customers for more than 20 years. "We advise people on spare parts that we supply for our equipment," he said. "We also consult on work processes and ways to increase yields."

Money problems

Despite all the trade potential, there are some obstacles, capital being one of them. Because many Libyans have withdrawn their savings, many banks now lack a sufficient capital base to finance imports.

Müller is in permanent contact via text messages and e-mail with representatives of German companies in Libya to keep abreast of developments in the country and new contracts.

"We've just won a new contract but we have yet to complete it for lack of a money transfer or letter of credit," he said.

Müller lauds the support from the German government. The recent flight with Economy Minister Rösler, he said, was "full of industry representatives."

International competition in North Africa is fierce. Countries such as China, France, Italy, South Korea and Turkey are vying for an ever bigger chunk of business in the region.

Müller sees the opportunities for German companies in focusing on niche areas and products requiring a high level of specialization.

(Source: Deutsche Welle)

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