Mr. Leonard S. Chaikand: “One of our objectives is to introduce a stock exchange in Yemen” [Archives:1999/35/Business & Economy]

August 30 1999

Foreign investment in Yemen could be very helpful for the economic growth in the country. The government issued a law concerning investment which could drive the economic prosperity ahead. But the process of investment is plagued with a lot of pitfalls and difficulties. Investors are coming to Yemen and perceive that it has a good potential for investment. Mr. Leonard S. Chaikand, Chairman and CEO of the Institutional Investors Consulting Company has been working with the World Dutch 
Shell for 35 years in many countries like India, Korea, and Thailand. He has recently arrived in Yemen and conducted talks with Petro Yemen upon which his company (IICC) has been hired to raise $200 million to build an oil refinery at Raseesa. The goal is to have the refinery come on stream by the year 2000 or early 2001. If everything went smoothly, the refinery would come on stream and it would produce between 40-60,000 barrels a day. On this occasion, Mohammed Hatem Al-Qadhi, Yemen Times Managing Editor interviewed Mr. Leonard S. Chaikand and filed the following.
Q: What is your focus on your visit to Yemen?
A: It is to understand what is going on here and to build some confidence in myself that the people we are working with can do the job. If I am going to be raising some money in the United States and Europe and other places, I want to be comfortable that we have the right group.
We need a lot of technical people and our long term goal is to be an integrated oil and gas company, a Yemeni company because it is Yemeni controlled. We will be the largest integrated oil and gas company in Yemen and probably within 5-6 years, the 4th to 5th largest company in Yemen. The World Bank is building a road from the main road to our refinery and from my perception, it is a country that has tremendous potential and a lot of problems. We could end up doing a number of other projects and so, we have been meeting with a number of government officials. I’ll be meeting with all the major banks in Yemen. I’ll also be meeting with the ambassador from Yemen to the United States in September, to talk to him about the project and also some other things that I might be beneficial to the country. I have been very impressed by Yemen, versus other countries. I think their are certain things here that make you feel good. For example, they American women that was here for two years. There is something about the place that is very attractive. So, it doesn’t hurt that the city is high and that their is all kinds of agricultural products. However, in order to take the benefits of this infrastructure, industrial projects are required, including roads and hospitals.
I’m a capitalist! There is no question about that and I believe every capitalist country should have a stock exchange. One of our objectives is to introduce a stock exchange in Yemen. They are in about six countries in the Middle East, including Bahrain, Oman and the United Arab Emirates. I think Sana’a should have one too. This is something that I would like to work with as another side issue. I know a lot about this and I think I can be helpful. This is one of the reasons why I want to talk to the ambassador because its important to tap into American capital. One way to do it is to make yourself better known.
For example, do you know which country gets the second or third most aid from the United States? Well, Israel is first, Egypt is second, Columbia is third and fourth is Armenia. Why does Columbia and particularly Armenia get so much aid from the US. One reason is they know how to market themselves, they present themselves. Yemen is not very well known. We went out to buy some books on Yemen from the bookstore. We found the history of Yemen and the culture amazing. It predates many of the other countries in the Middle East, so it has a lot to offer.
Q: Have you signed any contracts with any companies in Yemen?
A: Well, Petro Yemen is a Yemeni company. Right now, we are in the process of meeting with the banks and various groups that can help us with the construction. My guess is that much of this will come from outside Yemen. You always try to have as much from the local country as you can. In terms of complex refineries and chemical plants, a lot of the technical work has to come from outside. Now, one of the things that we are saying is that when the refinery opens, their will be a year training process. Hopefully, a year after the refinery opens, most of our employees will be from Yemen.
Q: How long will the project take ?
A: If it works the way we like than the refinery would start operating next year and become profitable the following year. One of the things we haven’t worked out is how many employees the refinery will employ and that will be pretty hard to guess. It will be a fairly large amount, but more importantly we will be getting into distribution,marketing and selling gasoline at service stations. It would be very nice if we can form a strategic alliance with Shell, particularly in the marketing area. So, we are one of the companies who is meeting with Shell to see if we can form an alliance. We would ideally like to have some strong Yemeni alliances. Our market, in addition to Yemen, is Eastern Africa and India.
India is a natural market for us because India is major importer of Petroleum products. As a result of that we are going to have petroleum products in other places. However, initially my role is to raise the $200 million.
Q: How do you feel about the investment potential in Yemen?
A: In general, you mean? Well, since I have been here I must have had about 30 calls from people who are looking for funding and investment opportunities, including Mutaher Al-Saeedi. We talked a lot and one of the things that I told him that privatization is an area that I am very interested in because typically, private companies run better than public companies. The investment climate in Yemen on a scale of 1-10 is probably 7, and maybe 5-10 years ago, it was probably lower. Their seems to be much greater stability now and I know things aren’t perfect in Yemen, in terms of democracy. In my opinion,Yemen is doing it the right way and China is another one. I think human rights is moving in the right direction.
Q: Say something about the Yemeni society, if you may?
A: OK, I will critique everything. In the United States, we have it easy. It is not really that everybody is rich, but not everyone is that poor! Everybody has a minimum wage and the minimum wage there, is probably higher than the average wage here ($6 an hour). Very few people starve in the United States because their is a lot of places where people can get food. It’s really discerning to go through the streets of Sana’a to see the people begging for food and alike. I think the best way to make it is to slowly evolve through privatization. It seems that the World Bank has a lot of influence on Yemen.
Q: Do you have any other projects you want to bring to Yemen ?
A: Well, we have talked about a lot of projects and we plan to bring power plants, fertilizing plants, cement plants, roads and alike. Now, our position would be to loan money for these projects. There is only one major bank operating in Sana and that is Indosuez, we met with them today. The Arab bank is large, but not like Indosuez. In both cases we will hopefully get support from these banks.
Q: Any last words?
A: I really like Yemen and the people. I will bring my wife, although she is a feminist. But, I am very, very positive about things. The US. embassy said a lot of positive things even with the kidnappings, and I would say there are more people murdered in New York City a day, than a year in Yemen. It just gets big headlines, especially if its a tourist. Yes, I would ruthlessly punish these people but proportionately, its not bad.
Fortunately, the food is good in Yemen and you find all types of food. I am very open to interviews and E-mails, especially if its positive. The beginning of the project is always the hardest and Askar is the father of all this so he deserves most of the credit.