KUWAIT CITY, 7 March 2004 — With Bahrain’s focus on economic diversification, the manufacturing sector has grown in importance and currently accounts for about 11.9 percent of the GDP (2002). With limited oil reserves, Bahrain’s continued prosperity rests on its ability to diversify its income stream to attract more foreign investments from the neighboring countries and others. Some of the regional countries like UAE and Qatar are rapidly challenging the Bahrain’s dominance in its core areas of banking and financial services. Intense efforts of the past few years at diversification are bearing fruits.
Bahrain is also pushing for the rapid development of other service industries such as information technology, healthcare and education. The government has also been liberalizing its policies and is targeting the private investment to improve its infrastructure. The government has already broken the monopoly of state-owned telecommunication company Batelco. Privatization of the power and water industries are also on the anvil.
Work should also begin on a major upgrade and expansion of the refinery at the state-owned Bahrain Petroleum Company (Bapco). The government is also expected to press ahead with privatization of the utilities, inviting private sector involvement into the power and water sectors.
Intense efforts at restructuring the manufacturing sector are on to make it more competitive in the dynamic business environment. The government owned Bapco is moving ahead with its $600 million low-sulfur diesel production (LSPD) project at its Sitra refinery. The project will allow the export of higher quality fuel to meet Western specifications and requirements.
Aluminum, which is the Bahrain’s industrial mainstay, is undergoing rapid upstream and downstream expansion, which in turn is contributing to a construction boom.
Bahrain’s largest industrial enterprise, Aluminum Bahrain (Alba) is in expansion spree and planning to add a further 307,000 t/y fifth potline, which will take production capacity to around 823,000 t/y.
Downstream aluminum company, Gulf Aluminum Rolling Mill Company (Garmco) has become a major player in the international rolled aluminum market The company has been pursuing a policy of continued downstream investment to widen its product range and caters to more specialized applications.
The majority private owned Bahrain Aluminum Extrusion Company (Balexco), which has tripled its capacity in the last 25 years, now dispatches 25,000 t/y of extruded aluminum across the world. Balexco is pressing ahead with an ambitious program of expansion throughout the region.
After 23 years of unhindered rule, Batelco lost its monopoly on the Bahraini telecommunications services in December 2003. The Kuwait based MTC-Vodafone has entered the Bahraini market and launched its services at the end of 2003. MTC, which is conducting an aggressive marketing campaign, is all set to become strong competitor to Batelco. Sensing intense competition, Batelco has been undertaking restructuring and cost cutting exercise since the past one year.