In 2008, as part of a broader privatization of industry initiative, the Libyan Government invited foreign investors into partnership with LCC with the objective of attracting investment and technology to update the facilities. The Asamer Group – an industrial conglomerate headquarter in Austria won the bid to acquire a controlling stake in LCC. In 2009-10 the company made significant investments, and as a result, its production techniques improved, and key environmental issues were addressed. In 2010 the Company produced 2.1 million tonnes of cement – the highest annual production in LCC’s history – and achieved EBITDA of 68 million Euros.
The 2011 uprising and the following years of civil unrest resulted in significant operational and financial problems for LCC. In 2014 the security situation had deteriorated in Benghazi and LCC was forced to mothball both plants in Benghazi. The Al Fatiah facility operated intermittently throughout 2014 but was forced to cease production in early 2015.
In April 2015 Libya Cement Holdings Ltd. (LCH), headed up by Ahmed Ben Halim acquired the controlling stake of the Company from the Asamer Group. LCH launched a turnaround strategy for LCC working with management and the labor unions to restart production at the Al Fatiah plant. In March 2016 the two plants in Benghazi were badly damaged in two separate incidents.
Production at the Benghazi cement factories were first impacted during the Benghazi uprising in 2011. Full production recommenced in 2012 through to early 2014 when production was again suspended because of fighting in the vicinity of the factories. In 2016 extensive damage to the factories occurred during Operation Dignity.
The Al Fataiah Factory was able to continue operating throughout the entire war period (2011-2018), despite the front lines coming to within 5 kms of the factory at times. This is a tribute to the ingenuity of the local workforce who managed to find solutions to the many problems experienced. These included shortages of materials, supplies and spare parts and significant road closures preventing many personnel from accessing the factory.
The primary limiting factor though was the availability of reliable electricity, and so the factory operated at only 50% capacity throughout the period. This is set to change in 2019, with the plan for overhauling and recommissioning Kiln B in full progress and the increasing reliability of the electricity generating and transmission service.
A combination of ageing equipment, war damage, vandalism, theft of machinery and equipment, corrosion, obsolescence and the loss of many critical design plans and records have required the owners and senior management to undertake a comprehensive assessment of the factories operational and technical status. There is almost no part of the Benghazi factories untouched by conflict.
Although single components within the Benghazi factories could be repaired quickly and at relatively low cost one by one, this approach will not meet the expected scale of demand in the time needed by the Libyan people. Nor is this approach the best value for money in the medium to long term.
Only a long term, considered and realistic strategic plan will enable the factories to return to production.
After four years of being unable to produce cement at its Benghazi factories the Libyan Cement Company (LCC) has now identified a pathway back to full production. As a proud and resilient company that has been providing cement to Benghazi and more widely for over 50 years, the importance of LCC for Benghazi’s economy and the subsequent social impact this will have is well understood.
A short-term objective of the pathway back to initial production is to renew a broad range of business relationships across Benghazi. To ensure that local suppliers, cement merchants and contractors can begin to benefit from LCC’s repair and upgrade of the plant is a priority.
A return to initial and then full production over the course of the next 4 – 5 years will therefore have a medium term positive social impact within Benghazi. The full impact however will only be felt over the longer term when LCC succeed in returning the Benghazi factories to long term sustainable and profitable production.