Preparations are in the final stages to enable the Northern Gulf’s most promising Logistics Zone to sign leases as early as next month (June) with companies it has selected as tenants.

The ambitious Bahrain Logistics Zone (BLZ), which has already attracted widespread international and regional attention, has completed the construction of roads and utilities and is currently in the process of zoning under the guidance of Royal Haskoning, a leading international consultancy company.
The zoning, which will specify which companies will be positioned where, is an elaborate exercise to ensure that operations are conducted efficiently and BLZ emerges as an outstanding boutique value-added logistics area, the first of its kind in the Northern Gulf.
“This is a world-class logistics zone and we already have international tenants such as Ceva Logistics, Danzas AEI Intercontinental, the Bahrain operating arm of DHL Global Forwarding; Landmark and Marina Trading,” said Hamad Fakhro, assistant director-general, BLZ. “In allocating positions for tenants we take into consideration the expected volume of cargo they will generate and the physical size of the outfits. For example, high turnover companies may be located closer to the port so the movement of trailers may be least disruptive to other companies in the zone. Taller structures may not be juxtaposed with smaller buildings and firms requiring refrigeration, for instance, may be allocated closer to points facilitating refrigeration.
“The zoning of the area is being organised in a systematic and logical way.”
Once this process is completed some time in June, the selected companies will sign 20-year renewable leases enabling them to commence building their facilities. It may take a year to a year and a half for parties to complete their superstructures and begin commercial operations.
Tenants may build their own facilities or opt for pre-built structures. BLZ covers an area of 1 sq km and another 1.5 sq km will be available in another phase after reclaiming land from the sea.

Construction guidelines
The construction of buildings at the BLZ has to follow international rules and guidelines. “Certain criteria for heights, landscaping, parking and security and safety will be implemented in the zone. Aesthetics is also a prime consideration, and Bahrain Logistics Zone is encouraging tenants to present eye-pleasing architecture,” says Fakhro.
Attention to quality and efficiency goes all the way back to the very selection of tenants.
“We want to make sure tenants will add to the economy of Bahrain through leveraging the new port and creating skilled jobs for our nationals,” said Fakhro.
BLZ, a part of the General Organisation of Sea Ports, envisions Bahrain emerging as a transshipment hub to serve the Northern Gulf states such as Saudi Arabia, Kuwait, Iran, Iraq and Qatar and as a thriving platform for companies wishing to engage in multi-modal logistics through sea, air and land movements.  Currently Jebel Ali port serves as a major distribution point for cargo going to the Gulf states and beyond.
“Here we’re closer to the markets of the Northern Gulf. The Saudi market is the largest in the GCC area with high consumption and we’re very close to them. Shippers and shipping lines save time and money with cost benefits stretched on to consumers,” Fakhro points out.
That was not the case until Bahrain’s new Khalifa Bin Salman Port (KBSP) was built in Hidd. Whereas the old port, Mina Salman, had limitations in accepting large vessels with its depth being only 9.7 m, the new port has been designed for a depth of 15 m with larger and more modern terminals and the latest cargo-handling equipment capable of handling 2.5 million teu in the final stage.
One of the world’s top port operators, APM Terminals, is operating KBSP. Importantly, as other ports in the Gulf are stymied by congestion, KBSP boasts capacity and is geographically well placed to serve the Northern Gulf more efficiently.

Five times oversubscribed
BLZ has been very selective and uncompromising in the kind of companies it will license to operate in the zone. In terms of applications for licenses, BLZ was five times oversubscribed, says Fakhro. “We had around 73 applications coming in but some of them were clearly not the right fit for us,” he says. “There were some applicants who did not present any value-added activities, investment for growth or job-creation. There was little of significance they would do within our parameters - aside from leasing storage space. We selected around 20 best-fit companies for allocation of space after applying stringent evaluation criteria in a fair and transparent manner.”
The companies signing leases will bring with them an investment of around BD99 million ($261.9 million).
Ceva has specified an interest in initially leasing 10,000 sq m of land to build warehousing facilities with the option of leasing an additional 5,000 sq m of pre-built serviced warehouses. The company is using Bahrain Logistics Zone facilities to improve its reach and optimise its operations throughout the Gulf.
Danzas AEI Intercontinental will lease serviced warehousing space for conducting freight forwarding activities in Bahrain and other GCC states.
Marina Trading wants to bring all its goods to Bahrain for distribution while Landmark is thinking of relocating to Bahrain and using it as a base for the region.
Fakhro does not think the emerging Dubai Logistics City will cast a shadow over the Bahrain Logistics Zone. “We are complementing each other,” he says nonchalantly. “Dubai has actually helped put Bahrain on the map and we have benefited,” he says, and explains: “Since there’s such a significant operation in Dubai, we act as an alternative for companies that focus on doing logistics and targeting the Northern Gulf. Companies can think of opening a second operation.” This has clearly been the case with establishments like Ceva and Danzas who are adding Bahrain facilities to their Gulf facilities in Dubai.

Bonded area
As well as leveraging a modern port and being close to it, BLZ has the advantage of operating within a bonded area. The logistics complex is in close proximity to Saudi Arabia (a 45-minute drive) via the King Fahad Causeway and to Qatar via another causeway now under construction and set for completion within the next five years. BLZ sees itself as addressing a gap in the Gulf’s logistics industry.
For smoother functioning of operations, BLZ will assign an account manager for each tenant who will sort out issues when needed.
The Government of the Kingdom of Bahrain has highlighted its liberal business environment, with the most free trade agreements in the Gulf and the most streamlined registration, visa and licensing processes in the region
These advantages have been conveyed to potential tenants at several forums. Hand-in-hand with the Bahrain Economic Development Board, a BLZ team visited the UK in February and Japan in the following month. The zone was promoted last year in China the US and Europe.
In the context of the global economic downturn most companies are hesitant to make a move, but BLZ is pressing on. “Bahrain has taken this as an opportunity. We can clearly show that operating in and out of Bahrain can actually lead to cost-cutting. They listen and are appreciative. Coming here takes a lot of evaluation but the good news is that the Bahrain Logistics Zone is seen as a good proposition.”