Indian companies among top 3 investors in Bahrain

Manama(Bahrain): With a host of incentives including duty-free access to Saudi Arabia, the biggest market in the region, Indian companies are investing $231 million in the Bahrain International Investment Park (BIIP) and figure among the top 3 investors.

"India is among our top three locations for inward investment into the park," senior BIIP officials said. Companies in the park also get duty benefits in the US market as Bahrain has a free trade agreement with US.

JBF Industries, Chemco Plastic and Thyrocare are among firms investing in the park. While JBF, which is investing $200 million, is one of the largest in BIIP and has already begun operations, Chemco is investing $10 million. JBF makes polyester yarn and polyester film.

Chemco, which counts Coca Cola, Reckitt Benckiser (RB) and Mondelez (formerly Kraft Foods) as its clients, would begin operations in early 2015. Apart from RB and Mondelez, the park houses units of German engineering giant Siemens and chemicals behemoth BASF.

"We wanted to invest in a place in Middle East which offered 100% ownership," said Bimal Sharma, general manager, Chemco, who is heading its Bahrain foray. Apart from full ownership, BIIP offers power at 4 cents (around Rs. 2.4) a unit, allows 100% employment of expats for the first five years and provides duty free access to the GCC (Gulf Cooperation Council) market. Companies also need not pay corporate tax in Bahrain.

The duty free access provides a 5% benefit for companies operating out of the park, said Maria Gilsenan, marketing executive, BIIP. Companies with operations in the duty free zones in the region have to pay 5% duties if they sell products outside the zones, Sharma said.

"Power costs are far better than other places (in the GCC). The cost of living (in Bahrain) is also about 30% lower when compared to Dubai," Sharma stated. Power accounts for about 60% of the total costs for Chemco, which has chosen to locate its first overseas plant in Bahrain.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.