AXEL M. ADDYMinister of Commerce & Industry

Republic of Liberia

Investment Meeting November 22nd, 2016

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Investment Opportunities in Liberia

2

Why Invest in Liberia

Catalytic Investment Opportunities USD

Priority Sector Rubber: Scaling Up RSS & Replanting 3.0M

Storage Infrastructure Gbarnga Commodity Exchange 5.0M

Monrovia Industrial Park 3.0M

Fisheries (Robertsport & Mesurrado) 12.0M

Toll Road to Robertsport as a Tourism Enabler 26-36M

Upgrading Liberian Standards Lab 1.4M

Oil Palm: Kernel Processing & Outgrower Scheme 28.5M

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1

2

B

C

D

E

F

G

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4

First-Mover

Advantage

• Strategic positioning in sectors where other countries have

reached supply saturation point

• e.g. Cocoa in Ivory Coast / Palm Oil in Indonesia

Access to

ECOWAS

• Market of 4.2M People/ over 300M ECOWAS

• High demand for key goods

• Palm oil

• Fish

• Rubber products

Supportive Tax

Regime

• Income tax rate is 25% on profits or 2% of turnover

• No capital controls, so any capital brought in Liberia can

easily be expatriated

• Agri-processing & manufacturing investors are fast-tracked

through Government services & facilitated access to

investment promotion

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5

Labour Pool

• Formal employment remains low, which provides a ready

pool of workers

• Outside planned special economic zones, a minimum wage

for formal work of USD5.50 per day for unskilled labor and

USD6 per day for skilled labor applies.

Ease of Starting a

Business

• The World Bank in 2016 rated Liberia as 37th best in the

world as a place to start a business, one of the top countries

in Africa.

Reduced cost of

Critical Inputs

• Recent reforms have reduced the price of key construction

inputs, removed import control and removed registration

processes for certain inputs

• WTO Accession implementation of ECOWAS CET will lead to

greater economies of scale due to larger market

• Duty-free on agriculture, agro-processing, and manufacturing

inputs

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• Long standing history in rubber production

• Potential to produce dry rubber products such as door mats, boots, bushels and

gloves

• Large unexploited West African market for ribbed smoked sheets, rubber crepe &

rubber products

7*Profits to be split between Farmer and RSS Producer 11/22/2016

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RSS

RSS

RSS

RSS

RSS

RSS Bright Farm

RSS Business Cluster Developers

• Can be an anchor business or farm

• Produce up to 20 ton of RSS per month per cluster

• Need 6-7 RSS Clusters to reach threshold for

rubber manufacturing to be profitable

• One cluster costs USD160-200k

• Currently one operational (Bright Farm) and two

finished by 06/2017 (GROW)

COOPs

• Smallholder Farmers

Receiving Stations

• Produce wet sheets

out of Latex

• Supply to RSS Cluster

(distance of 4/6 km)

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NOW

Scale up RSS

Production

• When production scaled up (across 6/7 clusters), will reach

80-100t per month, then rubber manufacturing (hoses,

mats, tubes, etc.) becomes feasible in Liberia

• Need 3 / 4 more RSS Business Cluster Developers

• USD 1.5m investment

Aim for 2018

Start Rubber

Compounding/

Manufacturing

• Once threshold of 80-100t RSS per month reached:

• Need investor in rubber compounding (melting rubber and

mixing with chemicals)

• And in rubber manufacturing into finished products

Wet sheetsUp and running

RSSNeed to increase

CompoundingAim 2018

ManufacturingAim 2018

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Capacity Potential

• 63,000t of latex produced in 2013 with split: 55% small

farmers 45% from concessions (pre-war data)

• Potential expansion to 325,000t

• Only through successful replanting of smallholder farms’

rubber trees.

Replanting Model

• Most farms are owned by groups of multiple family

members, which makes investing complicated

• Need for private sector investors to take over farms (lease

or buy from families) and replant trees

Investment

Opportunity

• Pilot: Set up 3 replanting companies that replant one 200ha

farm each

• Cost to replant one farm USD 400k-600k +

leasing/purchasing land costs

• Revenue intake per farm per year of USD 180k (1.5t of

Latex per ha)

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Threat of excess commodity

supply and price crashes,

leaving farmers worse off

Need to invest in Smart Storage

and Efficient Market Access

Solutions

Post-harvest losses as

high as 30%, due to

bad management

1

Unused and

moribund storage

infrastructure

2

3

LATA will add significant

staple crops to

Agricultural Markets

Proposal:

Modern

AFEX e-WRS

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Description

• Electronic Warehouse Receipt System (e-WRS)

• Private-sector led and run by AFEX Commodities Inc.

• Connects smallholder farmers to commodity and financial

markets

Investment

• USD5.0m over 3 years (until Break-even)

• 1.4m CAPEX, 2.7m OPEX, 1.0m Settlement fund

• Loan of USD 5.0m required

Socio-Economic

Returns

• Over USD30m in increased income to smallholders

• Over USD15m savings in reduced post-harvest losses

• Aggregate of USD50 Million in new wealth across rural and

sub-urban Liberia

• Significant reductions in the food import bill of Liberia

CAPEX = Capital Expenditure, OPEX = Operational Exp. 1211/22/2016

Dry Port

• Possible for GoL to expand the Commodity Exchange into a

Dry Port, facilitating all paper work

• Finished containers up-country save transaction costs at

Freeport

Link to CARI

• Central Agricultural Research Institute present in Gbarnga

• To be expanded beyond rice and cassava

• Make seeds available for farmers to procure

Link to Processing

• With commodities readily available in Gbangar, processors

can source directly

• Higher value products could be manufactured more

upstream, closer to farmers

• Challenge: Infrastructure (Electricity)

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Sector • Industrial Real Estate

Organization • MoCI (Lead) / NIC

Description

• Squatters cleared, fencing finalized in 02/2017

• 8 active leases and 5 companies present already

(biscuits, propane gas, nails, mattresses, container

warehousing)

• Currently in discussion with further companies about

lease agreements

Contact • Ellen O. Pratt

Investment

• Investment in access to utilities (LEC electricity, water)

and road

• USD 3M (PPP)

• Investor responsible for management of park

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Domestic market unsaturated, particularly up-country plus large regional

market

Only 7,300 mt of marine fish currently produced locally, while consumption

lies at 23,800 mt per year

Abundance of renewable water sources providing year-long water

availability & optimal natural water temperature for aquaculture

2 Processing Facilities being finalized

◦ Robertsport

◦ Mesurado

MONROVIARobertsport Facility

Mesurado Fishing Pier

Buchanan Fishing Pier

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Sector • Fisheries & Aquaculture / Fish Processing

Organization • MoA /MoCI

Description

• Completion 02/2017 with facilities & basic equipment

• USD 12 M Investment

• Operation possible immediately with potential to expand

processing & cooling opportunities

• Facility to include smoking units, water source, fuel station,

boat & net repair, fish washing bowls, processing stands, chill

room, & ice plants.

Contact • Dr. Moses Zinnah / Steve Marvie

Impact

• Increased support to value-addition companies, creation of

jobs, and promotion of “Made in Liberia”.

• Engagement of smallholder livelihoods, currently 37,000

Liberians engaged in fishing and processing

• Vitalize fishing industry & reduce wastage

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Sector • Fisheries & Aquaculture / Fish Processing

Organization • MoA / MoCI

Description

• Rehabilitation of Fishing Pier will open Liberia up to

international markets for export in addition to supporting

value-chain addition through processing opportunities

• Import/Export terminal & National Competent Laboratory

ensure Liberia has capacity to meet international standards

• Completion in 06/2017

Contact • Dr. Moses Zinnah / Steve Marvie

Impact• Increased support to value-addition companies, creation of

jobs, and promotion of “Made in Liberia”.

• Access to domestic, regional, & international markets

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Sector • Testing Lab Infrastructure

Organization • National Standards Laboratory (NSL) (under lead of MoCI)

Description

• Finalized in 2011 (funded by EU), but not upgraded since

• Dual role: providing testing and calibration services that

enable Liberia to safeguard food security and assuring

exports meet international standards

Contact • Stephen Y. Mambu (Acting Quality Director NSL)

Investment

• The currently basic equipment needs to be upgraded and

staff needs to be trained for concessionairs to use the lab

• Investment of USD 1.4M over 3 years

• Significant revenue potentials among concessionairs,

in particular in metrology (calibration)

• Break-even point estimated after 3/4 years

• PPP (concern for PPP regulation – PPCC for example)

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Sector • Infrastructure / Tourism

Organization • MoPW

Description• The road to Robertsport is unpaved, making access to

Robertsport in rainy season very costly and preventing

tourism expansion in Robertsport

Investment

• USD 26-36M for 40km 2-lane secondary road

• So far no reliable estimate of additional traffic generated /

revenue intake

• Significant spillovers to local tourism industry, as more

tourists come to Robertsport

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Oil Palm is native to Liberia & grows abundantly across the country

Most efficient source of vegetable oil & high yield makes it cheap to produce

Business worth $50 billion annually with projections that will reach $88

billion by 2022.

Liberia‘s oil palm market was at least $91.5 million in 2014 & has average

annual growth of 5.9% p.a. in real terms since 2004

Liberia ranks second in ECOWAS in consumption of crude palm oil & kernel

oil p.p. / p.a.

ECOWAS market provides growing opportunity

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Sector • Palm Kernel Processing

Organization • J-Palm Liberia

Description

• Creating a market for otherwise wasted palm kernels,

presenting an opportunity for smallholders to immediately

increase their income.

• Demand for flagship product, Kernel Fresh, grew by almost

1000% between December 2015 and July 2016.

• Purchased palm kernels minuscule fraction of the estimated

120,000 MT going to waste in Liberia. If properly harnessed,

these wasted kernels could fetch approximately L$1.8 billion

for Liberian smallholder oil palm farmers per annum.

Contact • Mahmud Johnson

Investment

USD 3.7M over 3 years• Y1: €832,000 (58.8% profit margin)

• Y2: €1.2 million 65.6% margin)

• Y3:€1.7 million (70.5% margin)

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Sector • Oil Palm production & processing

Organization• MoA / IDH (Initiatief Duurzame Handel - The Sustainable

Trade Initiative)

Description

• SDPL and GVL together have concession agreements with

GoL to develop 420,000 ha of commercial oil palm, subject to

parallel development of 84,000 hectares of outgrower oil

palm plantations.

• Sime Darby & Golden Veroleum produce certified palm oil –

pilot component will be managed by the companies

• Due to the experimental and proving nature of the pilot

project, loan is proposed to carry an interest charge of 3%.

Loss guarantee for elements of the pilot loan from the

Norwegian Government through IDH

• Forest areas have already been identified in four of the five

pilot areas.

Contact • Dr. Moses Zinnah

Investment • Resource Requirements: USD 22.8 million

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Electricity: Transmission & Distribution (ELWA Corridor to Roberts International Airport)

Water and Sewage: PPP targeting improved and expanded service delivery

WTO Post Accession: E-Government Solutions including (Tax Collection, Work & Resident Permit, National ID, Visa on Arrival & Electronic Security Verification, Single Window Port Community for Customs, Verification of Conformity for Standards Infrastructure)

Financing: Long term specialized financing solutions for low income housing, agriculture & SMEs.

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NIC http://investliberia.gov.lr/new/

MoCI http://moci.gov.lr/

Liberian Tourism http://experienceliberiantourism.com/

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