Expansions in large companies and encouragement to SMEs spell a better future for the country, says ST Almeida
Bahrain's first private sector industrial park, which is encouraging GCC investors to buy plots, is good news for the kingdom considering that its commerce minister only recently announced there was a drop in foreign investments in 2001, the latest year he could give statistics for.
Ali Saleh Al Saleh told parliament that investments dipped from BD1.76 billion ($4.6 billion) in 2000 to BD1.475 billion in the following year, explaining that it was in line with global trends. The minister stressed that Bahrain was still an attractive place for foreign investments in view of its low inflation and reasonable utility rates and also the opportunity for foreigners to own as much as 100 per cent of their enterprises.
Ras Zuwaid Industrial Park, being developed by Saraya Properties in Askar, opposite the facilities of Bahrain's best-known industrial facility, Alba, has reported that a third of the 181 plots on offer have been snapped up by investors including those running blue chip companies. They are setting up manufacturing firms, warehouses and packing units, and the hope is that in addition to foreign money entering the country, there will be substantial new employment for Bahrain's youth and perhaps new technology.
In terms of employment prospects, Alba is offering great opportunities. The giant aluminium smelter is getting bigger with a new potline (No. 5) that will raise production capacity from 520,000 tonnes per annum (tpa) to 827,000tpa. The $1.7 billion expansion project will generate 4,000 new jobs with the likelihood that the company will retain some of the workers. Alba has launched a $3 million "Training for Bahrain" initiative to help as many as 3,000 nationals of the country to qualify for positions in the construction industry beyond Potline 5.
Alba recently announced it is upgrading its existing Reduction line 4 to boost production by 23,000tpa. It will spend $56.3 million on that project and another $65 million on improving environmental quality. This latter investment involves retrofitting all six gas turbines in Alba's Power Station 3 and replacing existing control systems to reduce waste emissions.
Another large industrial venture, the Gulf Aluminium Rolling Mill (Garmco) is in the process of boosting its annual production capacity from 125,000tpa to 145,000tpa. Few Gulf companies can match Garmco's export performance - 90 per cent of the production going outside the GCC region.
The pelletising plant, Gulf Industrial Investment Company (GIIC) is looking forward to capitalising on strong market conditions to sell more of its products. The company expects to increase production from 3.07 million tonnes in 2002 to at least 3.3 million tonnes. If prospects continue to be promising, GIIC will enhance facilities to raise capacity by at least 1 million tonnes.
Considering that small and medium enterprises (SMEs) constitute an important segment of Bahrain's industrial life, an initiative from Bahrain Development Bank (BDB) raises hopes that some enterprising Bahrainis with limited financial means will be able to set up businesses. BDB has set up the Bahrain Business Incubator Centre in Hidd. The Ministry of Industry and the United Nations Industrial Development Organisation (Unido) are helping in its development.
In addition to soft loans, tenants in the BDB-owned incubator benefit from basic infrastructure facilities including workshop space and shared office services together with business counselling and training support.
Fourteen SMEs were set up in the first year at a total investment BD725,000, a better-than-expected development. The incubator promoters are so happy they plan to set up another similar facility in the Northern Governorate.
The ventures include the production of gaskets, ingots, perfumes, exhibition material and animal feed. There are also IT consultancy and training firms.
AB Al Mahmood, owner of Exceltech, has provided IT consultancy and training for 25 years in Bahrain and other Gulf states including Excel technology for staffs of financial institutions. "I formed this unit to export my Excel knowledge to the region," he said. Al Mahmood is already training Bahrainis at the incubator and hopes to reach out to others in the Gulf.
Enthusiasm and expectancy were writ large on the faces of some young Bahrainis who were being briefed by BDB on the prospects of their business plans. Yaqoob Al Aamer wants to open a firm in the human resources and training field. Nizar Alqari was keen on starting a recruiting agency. He is now working on a national project called "Project 4000", which is being executed by Ernst and Young in association with the Bahraini government. He expects to start his business when the project is completed in December.
Naval Hassan is not sure whether she should start a manufacturing unit or get into an entertainment-organising business. Nasser Salman Abdullah has ideas of starting a value-added business in aluminium products.
The enthusiasm of these young people will be heartening to those pushing for greater diversification of the economy.
