Sigma Gas General Manager: “Investors should not be surprised with new demands after coming in.” [Archives:1998/46/Business & Economy]

November 16 1998

Many Yemeni, Arab and international investors are coming to Aden to gauge its potential – both as a world port and a free-trade zone. Is the place ready for huge investments? What do visiting businessmen think about Aden?
Ridhwan Al-Saqqaf, Yemen Times Aden Bureau Chief, interviewed Mr. Aref Shamas, General Manager of Sigma Gas – a Lebanese investor group which recently started operating in Aden.
Q: Could you tell us a little about your investment activity in Yemen?
A: Yemen has quite a big potential for investment. It is still a virgin market, a fact that encouraged us to come here. We signed a contract with the Ministry of Industry and obtained a license from the General Investment Authority to establish and operate the Sigma Gas Factory in Aden. Sigma Gas manufactures gas cylinders of different sizes.
As an investment group, Sigma Gas has several commercial interests in America, East Africa and Europe. We came here after hearing of the facilities provided for investors in this country.
Q: What is the factory’s capital investment? And how many people work there?
A: The actual operational capital is $4 million. We have 150 employees – all Yemeni.
Q: What is the factory’s annual manufacturing capacity?
A: Production started on July 1st of this year with a capacity of 300,000 gas cylinders a year.
Q: What stages has your project gone through?
A: The initial agreement with the Ministry of Industry was to renovate the infrastructure of, and re-equip, the old Al-Thawra gas factory in Aden. With an annual lease of $130,000, the factory was officially opened on May 22, 1998 by the Prime Minister, Dr. Abdulkarim Al-Iryani.
Q: How do you see making other investments in Yemen?
A: There are some obstacles that face foreign investors in this country that should be outlined and explained before an investor starts implementing a particular project.
Q: What sort of obstacles are these?
A: For instance, after the commencement of production, you are surprised by extra demands from the state. Customs taxes imposed on raw material range from 10 to 25%. While ready-made imported goods are taxed at 10% only. This is the biggest problem.
There are also income, production, consumption and other taxes. How can there be any investment in this country when all these extras are not made known to would-be investors beforehand?
Q: What sort of guarantees does a foreign investor need in Yemen?
A: We are really looking more for facilities than for guarantees. There is enough peace and security in this country to encourage people to come. However, there must be more transparency in dealing with new or potential investors. A businessman must know his/her rights and responsibilities, right at the outset.
Q: Are there many shortcomings in the Yemeni investment system?
A: Investors come here to make a profit, and if things continue as they are people will refrain from bringing in their money. I call on the authorities to better facilitate investors’ work. Sigma, as an international investment group, has a lot of experience in other countries. So we should know what investors look for in a country. There must be more facilities and freedom.
Q: What else does an investor look for, in addition to financial facilitation?
A: Other needs include entertainment facilities such as recreation centers, etc.. We are not here only to make money, though that is important. But, somehow, we also want to enjoy living while we are here.
Q: What future plans do you have?
A: We have many plans. They include increasing the number of production lines for various types of gas for industrial uses. This requires a new injection of capital and employing more staff. Our other plans include attempts at marketing out our products to neighboring countries. We are ambitious, and we have it takes to succeed, but the work environment must be helpful.