Global Arab Network | Bahrain expects to attract $ 25 bn in industrial investment

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Bahrain expects to attract $ 25 bn in industrial investment

Global Arab Network - - Reda Darwish

Saturday, 08 October 2011 00:58

http://www.english.globalarabnetwork.com/images/stories/2010/july/bahrain_finance---.jpg

Global Arab Network - Bahrain expects to attract $25bn in industrial investment over the next 10 years as it seeks to diversify its economy and expand its export base, the minister of industry and commerce, Hassan Abdulla Fakhro said in August. The Kingdom is leveraging its competitive advantages to encourage industrial development, much of which is taking place in officially designated zones, Global Arab Network reports according to OBG.

Manufacturing is particularly important for Bahrain, which does not have the huge hydrocarbons resources of some of its neighbours. Industrial sectors that are already well established include metals, food processing, construction materials and petrochemicals.

In the latest expansion of dedicated industrial land in the Kingdom, representatives of the Bahrain Industrial Gate (BIG) project, a multi-million-dollar economic city development programme on a 557,000-sq-metre site, signed a marketing agreement in mid-August with Bahrain Credit, in which the government is a major shareholder through state-owned organisations. Bahrain Credit will work to attract investors and will help secure funding to establish units at BIG.

Officials have said that demand continues to outstrip supply, as investment in manufacturing picks up. Bahrain’s industrial sector is benefitting from strengths including the Kingdom’s central location, with easy access to the neighbouring markets of the Middle East, the established economies of Europe and the rising powers of Asia and Africa. It also offers favourable trade terms, light-touch regulation and a strong human resource pool.

“There have to be very attractive conditions to bring in global names,” Bader Al Saad, park chief at the Bahrain International Investment Park (BIIP), told OBG. “Bahrain has created an environment that is extremely competitive, offering no corporate tax, duty-free imports, duty-free exports to the GCC and other Arab markets, 100% foreign ownership, inexpensive land and a qualified and skilled labour force.”

BIIP is one of the more established centres for industrial development in the Kingdom. It currently has 71 live projects, 28 in operation, 22 under construction, and the remainder in the planning stage. Total investment to date is BD484m ($1.28bn), and around 9000 jobs are being created. Some 70% of the 1.2m-sq-metre site has been allocated.

The range of industries establishing a presence at BIIP is indicative of the Kingdom’s appeal to a number of manufacturing sectors. Corporations already in operation include food processing company Kraft; UNEECO, which makes electricity panels and plastic packaging; and injection moulding firm Ramez International.

Additional companies continue to arrive at BIIP. For example, work started in mid-September on leading German chemical firm BASF’s customer-specific antioxidant blends facility, which will have an annual capacity of 16,000 metric tonnes when it opens in 2012, making it one of the world’s largest factories of its kind. Chongqing Polycomp International Corporation, a Saudi-Chinese joint venture, is investing $200m in a 140,000-tonne-per year fibreglass plant at the BIIP, and German technology giant Siemens has opened a metallurgical service centre that will serve the region’s rapidly growing steel and aluminium industries.

The Kingdom is already home to Aluminium Bahrain (Alba), one of the world’s largest aluminium companies. The firm is in the process of expanding its capacity to 1.2m tonnes per year, from around 880,000 tonnes at present, through the addition of a new potline, which should be commissioned by the end of 2014.

Ongoing investments in Bahrain’s industrial sector are a strong vote of confidence in the Kingdom. The opportunities for export-oriented development continue to grow. As the International Monetary Fund (IMF) noted in a 2010 press release on the country, “Regional GCC markets are likely to play an important role in fostering growth. Accelerating integration initiatives could provide important impetus to investment.”

Of course, Bahrain is not the only country in the region looking to bolster its manufacturing base, and competition for investment is intensifying. However, the Kingdom’s case for private sector involvement is a compelling one. Continued investment in infrastructure and education should further enhance its position, while foreign partners continue to transfer the technology and knowledge to keep the country’s industrial edge sharp. (OBG)

Global Arab Network

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