With several high-profile companies now going ahead with their projects at Bahrain International Investment Park (BIIP), a senior park official appeared bullish, saying it would receive further investments and grow to make a major contribution to the kingdom’s economy in 2012.

Park chief Bader Al Saad told Gulf Industry that the political unrest in 2011 did not have a significant impact on new companies being attracted to BIIP. He underlined BIIP’s achievements in attracting foreign direct investment (FDI), despite the economic and political challenges faced by global and regional economies.

“In 2011 some very good projects were announced and they are continuing as planned. Investors are very happy with the level of government support,” said Al Saad. “Given the challenges, this is a testament to the quality of the location and the competitive advantages Bahrain offers to investors.”

Simens is one of the high-profile tenants at BIIP

German chemical giant BASF began construction in September of its antioxidant blends plant. When completed by the end of 2012, it will be one of the largest plants of its kind in the world with capacity of 16,000 tonnes per year. Germany-based RMA, a world leader in the design and manufacturing of pipeline equipment, commenced construction work in November, four months after announcing its intention to build a facility at BIIP. RMA has two plants in Germany and one in Poland. The Bahrain facility will be the fourth operation in the group.

At the groundbreaking ceremony, RMA’s CEO said the motivation to establish a manufacturing site in Bahrain, as opposed to other locations in the Middle East, was that Bahrain offered the company the best location to support their customers in the Middle East.

Bahrain, he said, has a well-educated workforce, duty-free access to other Middle East countries and a very good business environment for investors.

The building of Gulf Electronic Management Systems

Siemens began operations at its new Engineering Centre in a prebuilt manufacturing unit at Baytik Industrial Oasis at BIIP. The plant will manufacture and service machines used in steel making, rolling mills and power plants for the Gulf and around the world. The presence of Siemens in Bahrain is considered a huge step for the kingdom given the firm’s global reputation.

Al Saad also noted that Bahraini company Zayani Polymer Factory was officially opened in September. This new state-of-the-art polymer manufacturing plant will produce 40 million polypropylene woven sacks and 5,000 tonnes of polyethylene greenhouse sheets annually.

31 firms operating

At the end of 2011, 31 projects are operational, 21 are currently under construction, 6 leases have been signed and are obtaining building permits, and 14 projects have been approved for pre-leases. Thus far the 72 projects (operational, under construction, those with leases signed and obtaining permits and those approved and in the pre-lease stage) account for a total of BD486 million ($1.28 billion) in investments, with FDI accounting for 71.8 per cent. “Outlook for 2012 looks very promising; we have three large foreign companies, who are in negotiations with us. Two of these companies are almost certain to set up at BIIP and the third seems very likely. This is clearly an encouraging start to 2012,” said Al Saad.

The official noted that Bahrain experiences strong regional competition as all Gulf states are trying hard to attract FDI. “The BIIP has proven that Bahrain can attract large-scale inward investment in manufacturing. Major companies are locating here and they know that Bahrain is the best location due to its proximity to the largest regional market, Saudi Arabia.

“One of our keys to success is our responsiveness. It takes only an average time of six months from the first initial enquiry to lease signing.”

Singapore-based MTQ Corporation has a presence at the park

Road shows held

In the last quarter of 2011 BIIP held promotional road shows with the Bahrain Economic Development Board (EDB) in Italy, France, Germany, the US and UK. At events in Germany, BIIP asked German companies located at BIIP to “tell their story.” RMA and BASF, who participated, said they were surprised to receive a building permit in 45 days in Bahrain whereas in Germany it took eight months, said Al Saad.

“Following this event in Germany we are now in talks with another European company about locating at the BIIP.”

In promoting the park for investments, BIIP highlights the attraction of zero corporate and personal income tax, 100 per cent foreign ownership, quality serviced industrial land at a cost close to zero as well as duty-free access to a market of about 200 million people in the Gulf and Arab world. Furthermore its location at the gate of the new Khalifa Bin Salman Port, just 10 minutes from the international airport and 25 minutes from the customs post of the King Fahd Causeway linking Bahrain with Saudi Arabia makes a compelling argument.

Al Saad expects the 14 companies currently in the pre-lease stage to sign up in 2012. He says the main positive indicator is that the park is continuing to attract major foreign companies.

BIIP now has a cluster of German companies including Siemens, BASF, RMA, Lauscha Fiber International, and Paschal Formwork operating here.

Concerns such as the European debt crisis and the regional political problems are not deterring European firms, said Al Saad.

He also pointed out that during the unrest earlier in the year everyone got on with their day-to-day chores and companies met their schedules.

“The presence of these export-oriented companies is proof that we have got our investment environment right and that Bahrain continues to be the gateway of choice to the Middle East,” he concluded.