The General Electricity Company of Libya Moving into Globalization
The purpose of this report is to give a clear consultancy for DBD in how to expand and improve its business ability in order to be an international firm. The report consists of six elements starting with an introduction followed by two case studies of telecommunication companies one is successful and the other one is less successful in the Saudi market. Then it will analysis the Libyan market as a proposed market by making a SOWT analysis including the forth sections of it strength, weakness, opportunities and threat. Finally, there will be a conclusion which gives some recommendation to DBD regarding the Saudi market.
This consultant report will give DBD a clear vision on the Libyan market. The Libyan market is considered as a recommended market for DBD in order to run new business in a developing country such as Libya. There will be two cases studies to provide a wide over look on the companies which run ventures in Libyan market. How these companies run their business process. The first company is The Libyan petroleum institute called LPI is training and education centre provides technical and academic course for the employees of the companies in Libya in both the public and private sector.
The Libyan economy basically depends on the oil sector. This sector represents more than 70% from the total Libyan export. Libyan is considered as one of the highst income economy along with other seven African countries as the last research was done by th World Bank. The GDP per capita is about 15,000 $. Libya has one of the highest GDP in the world comparing with South Korea,Spain,Newzealand. These high rates figures reflect positively on the Health services, education, and social security. The unemployment in Libya is the highest in the region with 21%.
The population of Libya is only 6 million living in a huge area. The total area of Libya is 2 million square meter. Libya has the longest coast on the Mediterranean sea with about 2000km.
The second firm is the general electricity company of Libya (GECOL) is the first supplier for the electricity in Libya. GECOL is producing and transforming electricity throughout the Libyan regions by using a huge electrical plants and stations and transforming towers network. The report will explain the opportunities and threads in the Libyan market as a new ambitious market. Libya is considered to have the potential for forward to apply in a developed country. Libya has recently witnessed a huge boom in every sector such as banking, industry, agriculture, health services and education. International companies nowadays are competing in order to obtain opportunities to invest in the Libya market and Libyan government encouraging the opening doors for this competition in order that will reflect positively on The Libyan economy.
The General Electricity Company of Libya (GECOL):
the General People's Congress Established a Company for Electricity under Act No. 17 of 1984 Rome issued by the General Company for Electricity the aim behind the establishment of this firm is to provide area of operation and maintenance of power systems, and energy production plants, and related distribution stations and conversion, transmission lines and distribution of energy, and electrical control centers , and the management and operation and maintenance of water desalination plants throughout the Great Jamahiriya. The company also manufacture equipment and materials used by cooperation with the competent authorities. The company is providing public services and services consumers in electricity charges against assessments.
GECOL (General Electricity Company Of Libya) is the electric utility of the Great People's Libyan Arab Aljmahiriya. Over the last ten years,GECOL has more than doubled its energy production and the future promises an even faster growth. To run the power grid from the 400 kV level down to the distribution network in a highly reliable and efficient way, a state of the art utility communication network with TDM- & LANservices was planed and the implementation began in 2007. More than 300 stations are already in place an many more are about to follow. is the electric utility of the Great
People's Libyan Arab Aljmahiriya.It is solely responsible for the generation, transportation and distribution of electric power in the whole country.It operates more than 30 electricity generation plants, mainly steam and simple-cycle gas-turbine units and diesel generators in rural areas. The available installed generating capacity in the existing
plants is 5500 MW. The current system maximum demand is about 4000 MW.GECOL is also the sixth largest operator of water desalination plants in the world. More than a billion US$ will be invested in more than nine desalination units over the next decade. The future vision is focused on reinforcing the GECOL infrastructure by utilizing modern technologies in the fields of generation, transmission and distribution. To run its core-business in a commercially and technically very demanding environment.
Gecol fails of providing a good and modern way to send the charges bills of electricity consumption to the libyan people. The way applies nowadays is by sending workers from the gecol service department in order to check the electricity box inside the client's home, they estimate the cost of the electricity throughout the duration. This way of collecting the bills from the clients it is not modern and inconvenient for the client, the costumer may not at home in the time of collecting data from the electricity box also the electricity workers do not leave a notice on the client's door as a reminder of electricity payments, so as a result of this the electricity company find no way of cutting down the electricity for unpaid clients home
The position of the electricity box which is inside the client's home. This electricity box position does not prevent some costumers from cheating on the electricity bills, because the electricity box is an old fashion design, so those cheating costumers seek to stop the electricity reader data from movement for long durations in order to reduce the actual consumption of electricity so at the end at the time of collecting electricity data by the electricity workers. The workers read unreal data from the electricity box and ends with low bills for the cheating clients. The lack of using a modern technology of collecting data has a great negative effect on the electricity company cash flow.
Lack of maintenance
The periodic maintenance of electrical box and the lightning columns in the streets is very important for people's safety especially for children. Most of Libyan people's complains from the uncovered wires that come from the electricity columns to the home. That cause many electrical shocks and sometimes death cases.
Lack of professionalism
Most of electricity workers in the GECOL service department are not qualified to do maintenance. The professionalism is needed especially with high dangerous job which deals with electricity. The workers before starting the job, they get a short term training in dealing with the electrical equipment, this sort of courses do not include a real and practical applications. The trainers focus only on the theoretical side, so the workers do not have any idea on how to deal correctly with the electrical equipment and tools at services or emergences cases. It is reported by Gatewood, et al (1995) that employees require regular training especially in companies where technology is fully engaged. For example, Total in the United Kingdom spent approximately $20,000 per employee on induction program and training. The employees have to be trained until they become professional and skill full to perform their tasks accurately. Nissan also bears the expenses of additional classes that the employees may like to take (Pettinger, 2001). Moreover, Daft (2003) points out that approximately $100 billion is spent by companies each year on training. This goes to show how training courses are absolutely vital in an organisation.
Lack of motivation
Employees Motivation is a vital factor for any company which seeks to obtain a good return and keep the processes running smoothly inside the firm. Most of the GECOL employees do not have any kind of a good salary and lacking for bonuses in the company. That has negative effects on the GECOL employees from feeling frustration and disappointing as their efforts inside the firms are not appreciated by the boards of the company. Many of skillfull and experts inside the company from workers and admin staff to the engineers started applying to resign from the firm in a first chance they got to work in other companies which is paid higher salaries and bonuses for them. This is supported by Pettinger (2007) who stated that employees must be motivated and inspired by providing them with sufficient income as long as they are productive. Furthermore, poor pay and reward scheme result in irregularity and losing labours. Nelson & Quick (2008) also support the concept that motivation is needed for people to get involved in a company and exert more efforts in their work. He also stresses that the absence of motivation is a source of dissatisfaction. Having a good incentive program in a company is a very integral part of human resource management as it assists to attract and maintain skilled employees (Daft, 2003).
Libya Petroleum Institution (LPI):
LPI is considered one of the top high level institutes in Libya. This an excellent reputation obtained from the services provided. First, LPI provides English courses for the public and private sectors employees. The courses are given by high qualified educated trainers who have high education and hold international teaching certificate. These courses are running in high standard quality class rooms which contains the lastest modern equipment in teaching and PC laboratories.
Moreover, the LPI students considered in the high rank level of qualified and trained power force in Libyan market due to the support which is given by the (NOC) National oil Corporation ministry associated with the best curriculum learning. There are many local competitors for LPI, although LPI still the first choice for many private and public firms in Libya. This preference comes from introducing many international certificates such as maintenance and safety in oil fields approved by the American organisation of safety. Furthermore, the oil companies both as services or production companies competence to employe the LPI students, because they are already qualified and skilful, so there is no training courses needed for them and that is better for the oil companies in saving time and training cost.
On the other hand, the LPI as has a strength points it has weakness points. These weaknesses come from the relationships between the admin and technical department inside the LPI. There is a kind of lacking of communication sometimes the technical department takes orders from the admin. These orders need to be explained accurately to accomplish the targeted goal in an excellent way. There of delay in sending the tests results in estimated dead line time. Michael Sheehan confirmed this by saying, among the most trying elements of poor communication in today's workplace is a lack of information for the proper accomplishment of the tasks necessary within the business. Poor communication is an important issue to overcome in the workplace, though it may not always be easy.Â When resolving the situation in the workplace, remember to give it time, and motivate the employees properly
The LPI competitors had a chance of the conflicts happened inside the LPI, so they started graping the attention of the companies by offering cheaper price for doing laboratories tests compared to the LPI price, although these competitors does not have the adequate infrastructure as the LPI has, but the companies prefer to obtain good and accurate service within a fixed dead line, that helps these companies for saving times and money especially the cost of rening oil exploration equipment, this can be estimates in hundred thousands American dollars daily.
As a result of a poor communication inside the LPI . The LPI started losing some assigned contracts with foreign companies due to the recent fault in tests result inside the LPI laboratories or there is a sThere must be an improvement in the atmosphere inside the workplace. The admin should follow the( two way) of communication is very important. The employees should not only listen, but always have a chance to discuss and be encouraged to ask questions, discuss, express their own ideas. At the same time the admin should realise that effective communication in the workplace provides employees with a clear understanding of what is the target goal from them, with knowledge of what to do and what to expect, such as a sort of communication style creates effective performance of the staff and consequently increase employees loyalty.
The way forward
After the investigation which has been done. Libya market is recommended for DBD in order to expand its business globally for many reasons. Libya is one of the fewest countries that have never been attacked by terrorist groups, also the demographic and religious structure of the Libyan people makes Libya one of the safest places in the world, especially in Africa where are many neighbourhood countries have affected by civil wars and local conflicts due to the differentiation in the ethnic and religious structure of their population. Secondly, After 11 years of being under siege, Libya started to grap attention of all companied around the world which were away from the Libyan market due to politics reasons, especially oil service, production and exploration companies such as Total, Shell and Schlumberger. Furthermore, Libya has launched an excellent infrastructure especially in the banking sector where there are a lot of different of private and public banks for instance HSBC and Alaman. This boom in banking sector gives a big chance for DBD to invest inside the Libyan market and development its process. Thirdly, after recent modification in the investment rules in investment regulations in Libyan market for foreign companies, nowadays the Libyan market allows to foreign investors to acquire a majority holdings inside the companies which is a joint venture between Libyan and foreigner investors, so this gives DBD opportunities to make a partnership with a local partner while DBD has the largest proportion in the company as a result of this the return value for DBD will be better. Fourthly, DBD can invest in many area in the Libyan market, currently there are good return investment in different sector for instance industry,health,torism,services,agriculture and any other sector approved by the National General People's committe(GPS).The best areas where DBD can make its investment in Libya Market is the it service and telecommunication services. Libya has a lack in the IT and telecommunication infrastructure. There are only two players in the IT and telecommunication sector in Libya and their ability to cover and providing services to the clients do not meet with the need that can make them satisfied.
Fifthly, the foreign investment provides now many incentives for foreign companies to inest such as a five years exception from taxes and this duration can be extent to further three years if net profits reinvested in the project. Moreover there are free taxes from client's duties on import of machinery, equipment and tools required for implementation of the project for five years duration as well as there is no excise taxes on the overseas goods.
On the other hand there are many challenges could face DBD expansion process in Libyan market for instance. The IT and telecommunication infrastructure of libya is still new and may does not meet the expectation of DBD .Second, as a foreign company DBD i need for people who can speak English and foreign languages fluently while there are not enough Libyan people who can speak Foreign languages. Training is a must, because there are an adeqite qualified and skilful employees in Libyan market, so the DBD needs to put this in its account.
There are many ways to make an excellent research for DBD about the entering the Libyan market. Visiting the Libyan embassy website and collect information about the area that can be invested in also there is a commercial department inside the embassy where it provides helpful information about the Libyan market for the individual and firms investment.
Searching in the website of the Privatisation and Investment Board (WWW.investinlibya.ly) in order to obtain information about the regulations and laws for investing in the Libyan market.
Libya investment has a useful website (WWW.libyaninestment.com)where there are an opportunity for DBD to find a local partner in seeking to make a joint venture. Sending a group of different structure for DBD to attend commercial conferences and meetings such as the international affairs in order to gain knowledge about the companies and competitors in the Libya market.
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