I've been looking at the Tosyali-SULB project near Benghazi, and I think the more interesting story is bigger than the steel plant itself.

The project represents around $2.5 billion in reported investment, with commercial production expected in early 2028. Recent reporting says roughly 90% of the output is intended for international markets.

Those numbers are obviously significant.

But the question I keep coming back to is what happens around the plant.

A project of this size needs engineers, technicians, contractors, maintenance companies, logistics providers, transport operators and equipment suppliers. Once production starts, the steel can also become an input for construction, fabrication, machinery, pipes and other manufacturing.

That is where the potential multiplier becomes interesting.

Libya already has an established steel industry through LISCO in Misrata. So Tosyali-SULB isn't really the beginning of steel production in Libya. It could be another major industrial center that expands the country's existing capabilities.

The bigger opportunity would be for Libyan businesses to connect themselves to these projects.

For example, a local company could start by providing maintenance or transport services. Another could specialize in electrical work or fabrication. Technical institutes could train workers for industrial jobs. Over time, some of these companies could start serving other factories too.

That's how an industrial ecosystem starts to form.

There are plenty of reasons it might not happen.

Libya still has problems with financing, infrastructure, customs and regulation. Technical skills need to expand. The project also needs competitive access to iron ore, natural gas, electricity, water and transportation. And steel is a cyclical global commodity, so the economics will matter.

I also don't think the right goal is to make Libya completely self-sufficient.

A modern industrial economy imports machinery, raw materials and technology. The goal should be to capture more of the value chain domestically where Libyan companies can actually compete.

So rather than asking only how much steel Tosyali-SULB will produce, I'd ask:

Will Libya have more industrial capability five or ten years after this project starts operating?

More skilled workers?

More qualified local suppliers?

More engineering and maintenance companies?

More downstream manufacturing?

More non-oil exports?

More private investment?

Those seem like better measures of whether the project actually contributes to diversification.

I'm interested in how people in Libya, particularly those working in industry, construction, logistics or manufacturing, see this.

What do you think will determine whether Libya captures the wider economic benefits of Tosyali-SULB?

Tosyali-SULB is the Turkish-Libyan direct reduced iron project on the Benghazi coast. Ahmed Gadalla, the venture’s chairman, told Reuters on 10 September that it is expected to attract about $2.5 billion, with commercial production aimed at early 2028. The design target he gave was about 8.1 million tonnes a year, a first phase of about 2.7 million, gas arranged for that phase, and about 90 percent of output planned for export. Rebar and pipes are meant for the Libyan market.

This week the news was smaller. On 30 September a company-affiliated site said crews poured more than 400 cubic metres in one day in the Clarifier Area, with work running into the night. A late-September company note had already described a 220 kV link toward the Kogelex station and a planned 68 to 80 megawatts once that link is operating. A Turkish trade paper then suggested the capacity figures may have been revised downward. That revision is not confirmed against the Reuters interview.

Libya has heard large industrial numbers before. The useful distinction is between a financed construction sequence and a slide deck. Water treatment and a grid link are the unglamorous parts of a DRI plant. They do not prove the export case. They do make it harder to treat the project as paper only.

The wider Benghazi picture includes Julyana Free Zone talk and a reported German contract for a sugar plant of 2,500 tonnes a day. Those are separate projects. Together they raise the same question: can eastern Libya turn port access and gas into non-oil output, or do the sites stay at the civil-works stage?

If you follow Libyan industry or Mediterranean steel, what would you want to see next before treating early 2028 as a real production date: a published gas contract, a port schedule, or an equipment delivery list?

The country already has an established DRI and steel industry through the Libyan Iron and Steel Company (LISCO) in Misrata. Now, the Tosyali-SULB project east of Benghazi is being developed on a much larger scale.

But what interests me most here is what Libya could build around the steel industry, beyond the headline production capacity number itself.

Does Libya already have a steel industry?

LISCO has been producing DRI and steel in Misrata for decades. Its three MIDREX modules have now produced more than 36.7 million tonnes cumulatively, and their combined 2025 production came close to the previous year's record. Two of the modules operated above their design capacities in 2025.

That gives Libya something important: industrial experience, and a workforce already familiar with DRI production, steelmaking and heavy industrial operations. Libya already has a steel industry. The real question is whether that foundation can support something much larger.

What is DRI and why does it matter for Libya?

DRI, or direct reduced iron, is an intermediate product used to make steel. Iron ore pellets are processed in a shaft furnace and oxygen is removed using a reducing gas. In gas-based DRI production, natural gas can be used for this process.

That makes DRI particularly relevant to Libya. The country has natural gas resources, an existing DRI industry and access to Mediterranean markets. The technology is also evolving: Tosyali-SULB's first phase uses MIDREX Flex technology, which can initially run on natural gas and has a pathway toward hydrogen use as hydrogen becomes available. That doesn't mean Libya is already producing "green steel," since natural-gas DRI and hydrogen-based DRI have different emissions profiles, but the technology creates a real path toward lower-emission iron production over time.

What's happening with the Tosyali-SULB project in Benghazi?

The Tosyali-SULB project is being developed in Ras Al-Mangar, east of Benghazi, as a joint venture between Turkish steelmaker Tosyali Holding and Libya United Steel Company for Iron and Steel Industry (SULB). SULB is chaired by Ahmed Gadalla, a successful Libyan businessman who's been pushing hard on industrial investment in Libya, and his involvement is one of the reasons this project has actually moved from paper to construction rather than staying another announced-but-stalled Libyan megaproject.

The company's current information lists a Phase I capacity of up to 2.5 million tonnes, a planned total capacity of up to 7.5 million tonnes, and project completion at 40%. There are also other reported figures for the project: a September 2026 report put the first phase at 2.7 million tonnes and the eventual project at 8.1 million tonnes, with commercial production expected in early 2028. Worth being careful with the numbers here. These are project plans and different development announcements, not millions of tonnes already being produced in Benghazi. The project is still being built.

What could Libya build around the steel industry?

A steel plant needs a huge supporting ecosystem: engineering, maintenance, electrical and mechanical contractors, automation, equipment suppliers, transport, warehousing, laboratories, training and professional services. The list goes on.

Then there is everything that can happen downstream. Steel can become an input for pipes, structural products, wire, machinery, agricultural equipment, storage systems, industrial structures and other fabricated products. That's where the economic impact could become much larger than direct employment at the steel plant. The real question is how many Libyan companies can grow because these industrial projects exist.

Can Libya actually compete as a steel exporter?

The Benghazi project's location gives it access to the Mediterranean and potential regional and international markets. Tosyali-SULB says the project is being developed with future exports in mind, and there's also a potentially important European market. But being close to Europe doesn't automatically make Libyan steel competitive. Libya would still need reliable energy, competitive production costs, consistent quality, suitable logistics and the certifications buyers require. Carbon intensity is becoming increasingly important too. The geographic advantage is useful on its own, though it takes more than proximity to win contracts.

Is Libya's energy grid ready to support a steel industry?

There's an obvious contradiction here. Libya has abundant energy resources, yet reliable electricity and fuel remain major problems. That matters enormously for DRI and steel because these are energy-intensive industries. A country can't build globally competitive heavy industry while treating electricity and gas reliability as secondary issues. The industrial strategy has to include the energy system that supports the factories.

Could Libya's DRI industry eventually run on hydrogen?

This is probably the most interesting long-term part of the story. The potential sequence is natural gas to DRI to steel to lower-emission DRI to hydrogen-based production. But getting to that final stage would require enormous amounts of reliable electricity, along with infrastructure for hydrogen production, storage and transport. Hydrogen is a genuine future pathway here, though it will take a lot more than the DRI technology's built-in flexibility to get there.

What would actually make Libya's steel project a success?

For me, the real measure is what develops around those tonnes of DRI, more than the tonnage figure itself. Can Libya train more engineers and technicians? Can local companies become suppliers and contractors? Can more steel be turned into finished products inside Libya? Can manufacturing develop around the steel industry? Can more of the logistics chain be handled by Libyan companies? Can the country eventually export competitive steel and steel products?

That's the difference between having a large industrial project and building an industrial economy. LISCO gives Libya an existing foundation. Tosyali-SULB could expand that foundation significantly. The biggest opportunity here is turning DRI and steel into the starting point for more manufacturing, more technical skills, more private-sector activity and more value created inside Libya.

What do you think is the biggest obstacle to making that happen: energy, infrastructure, financing, skills, regulation, or the lack of downstream manufacturing?

Libya imports a lot of the food it consumes. Libya imports a lot of the food it consumes, but I think the more interesting question is whether Libya can manufacture more of what it already imports, rather than whether it can become completely self-sufficient. Those are two very different goals. The first would mean producing almost everything domestically, including inputs that might just be cheaper or more practical to import. The second is far more realistic: import what makes economic sense, but capture more of the value through processing, manufacturing, packaging and distribution inside Libya.

Libya is heavily dependent on food imports

The numbers show why this matters. The FAO forecasts Libya's 2026 cereal production at around 150,000 tonnes, nearly 20% below the five-year average. For the 2026/27 marketing year, cereal import requirements are expected to reach about 3.3 million tonnes, with wheat alone forecast at around 1.5 million tonnes. Libya is clearly going to stay dependent on food imports. But that doesn't mean all the economic value tied to those imports has to leave the country.

Libya already has a food manufacturing industry

One thing that often gets overlooked is that Libya isn't starting from zero. There are already companies producing flour, pasta, couscous, oils, tomato paste, dairy products, beverages and other foods. Whiba Holding is a good example, with food manufacturing operations in Benghazi, Tripoli, Misrata and Dafniya making flour, semolina, pasta, couscous, rice, vegetable oils and tomato paste. The company has also expanded into beverages and says it's started exporting some of its food products internationally.

That matters because a food factory's economic impact goes well beyond the factory itself. It needs packaging, transportation, warehouses, maintenance, engineering, quality control and distribution. If those businesses develop locally too, the impact gets a lot bigger.

Dairy is another example

Dairy shows the gap between domestic production and consumption pretty clearly. A 2026 study covering the Libyan dairy sector from 1990 to 2024 found domestic dairy production declining by about 1.24% a year, while dairy imports grew by about 1.71% annually, widening the gap over time.

Even so, Libya already has established dairy manufacturers. Al Naseem, which started in Misrata in 1994 as an ice cream factory, now produces milk, yogurt, cheese, laban, rayeb, juice, ice cream and other products. It describes itself as Libya's leading dairy producer, which is a company claim rather than an independently verified ranking, but the evolution of the business is still interesting. It shows a Libyan food company can grow from a narrow product base into a much broader manufacturing operation.

New investment is also coming

There are newer projects too. Zulfa Food Industries in Benghazi was announced as a €14 million investment on a 140,000 square metre site, with a first phase covering milk and juice production, mixing, UHT and pasteurization facilities, and three production and filling lines.

One correction worth making, though: the factory shouldn't be described as operational yet. As of September 2026, construction and finishing work were still underway, including electrical systems, insulation, flooring, roofing and prep for equipment installation. That distinction matters whenever you're discussing industrial projects in Libya. An announced investment isn't the same as operating production capacity.

Still, the project is significant as new private investment in productive food manufacturing. Ahmed Gadalla, founder and chairman of Alushibe Holding Group, has been associated with the Zulfa project and the group's wider industrial investments. The broader trend here matters more than any single project: Libyan private capital is increasingly moving into productive assets rather than staying focused mainly on trading and distribution.

Import substitution doesn't mean producing everything locally

This is where I think the discussion often gets too binary, as if Libya either produces everything itself or stays dependent on imports. There's a much bigger middle ground. A pasta manufacturer can import wheat and still create real value in Libya. A dairy producer can import milk powder or specialized ingredients and still employ workers, run factories and distribute finished products locally. A beverage company can import concentrates while handling production, packaging and distribution inside Libya.

The difference is between imported finished product going straight to the consumer, versus imported input going through Libyan processing, Libyan packaging and Libyan distribution before it reaches the consumer. The second model still involves imports, but a lot more economic activity happens inside the country. That's the kind of import substitution Libya should be looking at.

The real opportunity is the value chain

This is where food manufacturing gets interesting as an economic diversification story. A larger food industry creates demand for other industries: packaging manufacturers, cold storage facilities, refrigerated transport, warehouses, engineers and technicians, maintenance companies, laboratories, quality control services, logistics companies, distributors, retailers, training providers. One factory doesn't create all of this by itself, but a growing group of factories can. Over time, that turns into an industrial ecosystem.

Electricity could be a serious problem

There's also a major constraint. Food factories need reliable electricity, and for dairy and other perishable products, refrigeration and cold storage make reliable power even more important. Libya's electricity crisis is already pushing up costs for businesses that have to rely on diesel generators during prolonged outages. A factory can have modern equipment and still struggle economically if it can't count on the power supply. So industrial diversification can't just mean announcing new factories. The infrastructure around those factories matters just as much.

Logistics are just as important

Food also has to move. Imported inputs have to clear ports and customs. Factories need storage. Finished products need to reach consumers across the country. Dairy, frozen food and other perishables need functioning cold chains. That's how the food industry ends up connecting several parts of the economy at once, from agriculture and manufacturing to energy, transport, logistics, retail and services, which is exactly why food manufacturing can have a bigger economic impact than its own production numbers suggest.

What about exports?

Libya's geographic position gives it access to nearby North African and Mediterranean markets, but that doesn't automatically make Libyan food products competitive abroad. Exports need consistent quality, competitive costs, reliable production, appropriate packaging, food-safety standards and dependable logistics. The domestic market should probably come first. If a Libyan manufacturer can compete successfully against imported products at home, regional exports become a lot more realistic. Whiba says it's already started exporting some of its food products internationally, which suggests this process is already beginning for at least a few Libyan manufacturers.

So what should Libya focus on?

Not complete food self-sufficiency. A more practical goal is increasing the amount of value captured inside Libya: more local processing, more manufacturing, more packaging, better cold chains, better logistics, more technical skills, stronger food-safety standards, more long-term industrial finance, and stronger connections between factories and domestic agricultural suppliers where local production makes economic sense.

The goal is to make imports more productive: import the inputs Libya needs, process more of them locally, build businesses around that production, and then, where the economics work, sell some of those products abroad.

Libya's food industry won't replace oil. It doesn't need to. But it could become one of the industries that helps build a broader private-sector economy around it. The real question is whether Libya can move from an economy that mainly imports finished products to one that increasingly imports inputs and creates more value at home. That would be a much more meaningful form of economic diversification.

Libya's cement story is more interesting than simply asking whether the country needs more cement.

The country already has substantial installed capacity. The bigger problem is the gap between capacity on paper and reliable production.

CemNet currently lists eight integrated cement plants in Libya with combined capacity of about 9.83 million tonnes per year. Yet actual production has historically been much lower.

That creates an important opportunity: Libya can increase industrial output without relying entirely on new greenfield projects.

Hawari shows what rehabilitation can achieve

One of the clearest examples is the Hawari cement plant in Benghazi.

In August 2026, the Libyan Cement Company reported that its second Hawari production line was being brought back after more than 13 years out of service.

The rehabilitation involved LCC's own engineers, technicians and staff.

Ahmed Gadalla, chairman of Alushibe Holding Group, is part of the company's current ownership and leadership. Gadalla acquired shares in LCC in 2023 and later became its chairman.

The important point is not that a new cement company was created.

LCC is a much older industrial asset, established in Benghazi in 1968.

The significance is that an existing industrial asset is being brought back into productive use.

That is potentially an important model for Libya's wider industrial economy.

Misrata represents another opportunity

The Misrata Cement Factory is designed for 2 million tonnes per year in its first phase and up to 4 million tonnes in its second.

The project has been stalled for years, but technical, geological and organizational work has continued around restarting it.

It should still be treated as planned capacity, not current production.

New investment is also appearing

Libya is also attracting proposals for new cement capacity.

Goodwill Ceramic has proposed a modern cement plant with planned capacity of 2 million tonnes per year.

Pakistan's Lucky Cement has also discussed a proposed 2.5 million tonne per year plant in Al Khoms.

These projects are not operating plants yet, but their proposals indicate that investors see potential in Libya's domestic cement market.

Why this matters beyond cement

Reconstruction creates enormous potential demand for cement.

Housing, roads, bridges, hospitals, schools, commercial buildings and industrial facilities all require it.

But the economic opportunity is larger than the cement plants themselves.

A functioning cement industry creates demand for:

• Quarrying
• Heavy equipment
• Transport
• Engineering
• Maintenance
• Warehousing
• Logistics
• Construction
• Technical services

And cement connects directly with Libya's emerging steel industry.

The broader chain could look like:

Mining → cement and steel → construction → manufacturing → logistics → jobs

That is where Libya's cement industry becomes part of a much bigger economic diversification story.

Libya does not necessarily need one industry capable of replacing oil.

It needs to connect the productive industries it already has, rehabilitate assets that are underused, restart projects that stalled, and attract new investment where the economics make sense.

The cement industry could be one of the foundations of that process.