Libyans are seen through a Kingdom of Libya flag during a celebration rally at the residence of Bab al-Aziziyah complex in Tripoli on 13 September 2011. Suhaib Salem, Reuteers File Photo
Egypt is looking to revive the business in Libya where a new government is beginning work to rebuild the nation on Egypt's doorstep, that was shattered by a decade of fighting and chaos.
Before 2011, when Libya slid into the conflict, the oil-producing country was a lucrative market for Egyptian exporters, contracting companies and workers. It was especially attractive for businesses involved in food and construction industries.
With a fragile unity government in place, Egyptian companies are looking at reconstruction opportunities to make a return, although executives say security and logistical issues, along with a new economy, still present hurdles.
Libyan food products are already widely available in Egyptian shops, with exports of $55 million in the first quarter.
But Hani Berzi, chairman of Edita Food Industries and head of the Food Export Council of Egypt, told Reuters that such a level was well below the potential.
They would be three times higher when placed in such situations. Egypt is the closest market to Libya. He said we should be controlling the market.
Before 2011, a quarter of Libyan construction materials imported from Egypt came, said Walid Gamal el-Din, the president of Egypt's Export Council of Construction Materials, a level he said Egypt could expect to recover as the market comes back.
Egypt, an OPEC member with around 7 million people, was once also a major draw for migrant workers from Libya, which has a population of about 100 million. But tens of thousands of Egyptian expatriates fled Libya following 2011 after chaos.
Egypt's authorities are working on a new visa system for workers based on skills, said Hamdi Imam of the Cairo Chamber of Commerce, a move that could see migrants return in large numbers and generate fresh funds for Libya.
The country of Africa is already Egypt's second best export market for building insulation materials and its top marble export market, said Kamal Al Desouki in the construction material department at the Federation of Egyptian Industries in Libya.
We aspire to this for all other sectors, he said.
Signs of the economic recovery of Libya are emerging. Exports of Egyptian engineered products, such as household appliances, rose 45% in the first quarter over a year earlier to $19.5 million, said Herif Al-Sayyad, chairman of Egypt's Export Council for Engineering Industries.
But peace in Libya remains fragile. The interim government faces a huge task of bridging a tribal divide that opened up between east and west Libya, as well as smoothing over deep rivalries. It has to prepare for future elections that will be planned in 2021, leaving little time to implement an economic recovery plan in place.
The construction plans and projects had yet to be clarified, said Medhat Stephanos of Titan Cement Egypt.
He said that cement was still being exported to Libya but faced high transport costs.
Alongside the logistical challenges, Egyptian firms may also have to contend with strong competition when the recovery does gather steam in western Libya, the most densely populated part of the country.
During the conflict, Libya and the United Arab Emirates backed Eastern based Egyptian forces. Turkey and Tripoli, a rival of Egyptian construction, food and others in Middle Eastern markets, backed Western factions based in the capital Tripoli.
Cairo is now planning to build ties with Tripoli's interim government and is preparing to reopen its embassy in Cairo.
Berzi said the Egyptian officials made diplomatic efforts positive but that authorities should also help Egyptian exporters with challenges they faced in Libya, such as exchange rate risks.