Bahrain focuses on specialised industrial zones

In August 2017 Bahrain’s Industrial Areas Development Directorate, which is part of the Ministry of Industry, Commerce and Tourism, moved forward with efforts to update the infrastructure of Salman Industrial City. Previously known as Al Hidd Industrial Area, the city includes Bahrain International Investment Park (BIIP), Bahrain Investment Wharf and Hidd Industrial Zone.

The updates, being supported by GCC funds, include road network development, street lighting, capacity upgrades to the sewage-treatment plant and an extension of the water system. All work is set to be completed by 2020. This is just one part of wider efforts in recent years to make Bahrain more attractive to foreign manufacturers, with the aim to grow the industrial sector of the economy.

BIIP: Central to attracting big names is BIIP, which is located five minutes from Khalifa bin Salman Port and 10 minutes from Bahrain International Airport. The park has proven a key recipient of many manufacturing investments since its inception in 2005, and according to the Bahrain Economic Development Board (EDB), total investment in BIIP had already surpassed $2bn in 2014.

As of end-2017 there were 118 investment projects at the park and 82% of the land was utilised. Over 80% of investment has come from foreign firms, with 29 countries represented on site and estimated employment of 8883 people.

Among the businesses in BIIP are German chemicals company BASF, India’s JBF Industries and MTQ of Singapore. Confectionery giant Mondelez International is constructing its second factory at the park at a cost of $90m. It is expected to be operational in the first half of 2018 with an annual capacity of 90,000 tonnes of TUC, Oreo, Prince and Ritz biscuits. In May 2017 Armacell, a leader in insulation foams, broke ground on a $16m facility which will cover 10,000 sq metres and initially employ 100 people.

As is the case across Bahrain, 100% is permitted, and 0% corporate tax is available and is guaranteed for 10 years in BIIP, as is exemption from import duties on raw materials and equipment, and duty-free access to all GCC markets under the Greater Arab Free Trade Area agreement. The last perk differentiates the park from free zones in the region, which require separate procedures and taxes to access markets in the GCC.

BIIP, like the rest of Bahrain, also has free trade access to the US, as well as 100% repatriation of capital, no minimum capital requirements and no recruitment restrictions for the first five years of operations. High-quality serviced industrial land can be leased for 25 years at a rate of $2.66 per sq metre per year. Pre-built units are also available and are priced at $6.60 per sq metre per month.

BAHRAIN LOGISTICS ZONE: Also located in Salman Industrial City is the Bahrain Logistics Zone (BLZ). Inaugurated in 2008 and operated by Ports and Maritime Affairs at the Ministry of Transportation and Telecommunications, it is the only dedicated Customs-free, value-added logistics park in Bahrain. Companies operating out of the zone include Almoayed Wilhelmsen, Aramex and Cargo Partners, and Saudi firm Bandar Al Khaleej.

In November 2017 Schmidt Logistics Bahrain, a joint venture between Schmidt Heilbronn and noga-holding, the investment and business development arm of the National Oil and Gas Authority, opened a $20m facility in the BLZ. “Efforts are ongoing to attract logistics companies and regional distribution centres alongside existing players such as DHL, Aramex, Kuehne Nagel, Schmidt Logistics and others,” Ali Al Mudaifa, manager of manufacturing, transportation and logistics business development at the EDB, told OBG. “BLZ is close to being fully occupied as a result of improvements, and there are plans to expand the zone by a further 1.3m sq metres.”