“Bahrain is Attractive for Foreign Investments,” according to Baytik Industrial Oasis

Interview with Osama Al Khajah, CEO of Baytik Industrial Oasis

Let’s start with the Ebtikar Association. It’s going to be launched on April 3. Can you give us some details about this initiative and the related strategies?

Ebtikar is the result of a need for coordination of efforts between the existing ecosystem to help boost innovation and development in the Kingdom of Bahrain in various sectors. This includes management, science, education, financial services, industry and other sectors that require innovations to solve problems and enhance efficiency in doing business.

The Ebtikar is founded by members from society who have expertise and management skills. They are either CEOs or in a high level of executive management in different institutions. They are founding members in their personal capacity. This will definitely help the institution through their experience to be managed and achieve its objectives.

In addition, alliances with international institutions like the Arab Science and Technology Foundation, the United Nations Industrial Development Organizations (UNIDO) and other institutions have been made to achieve the targets which are not limited to Bahrain but to the region and specifically to MENA. This is a brief about Ebtikar which we will launch very soon.

What are your expectations from Ebtikar? What do you aim to achieve?

Through Ebtikar we aim to boost development of innovation. I will give you some examples. The polytechniques or the University of Bahrain graduate students from different departments every year and many of those students have good ideas which are used for graduation projects.

Many of those ideas deserve attention from the private sector as well as from the educational sector to develop the idea perhaps into a business plan. The student may become an entrepreneur and develop his idea into a product that can be commercialized and used in the market. That is one example. So there is a need and a gap. There is a system but it requires coordination of efforts from various parties and Ebtikar will play this role.

Now let’s talk about BIO (Baytik Industrial Oasis). Can you give us the latest updates and occupancy numbers? Did you see companies fleeing as a result of the crisis that happened in 2011?

In comparison, in 2011 we had in our initial operations one good tenant which was Siemens MENA Center which is an engineering, machining and maintenance center for Siemens products in energy and metal industries. This represents around 10% occupancy. Today we have achieved over 50% of real operations.

When I say real operations it means the tenants have already established commissions and started production. We have over 60% of tenants from different sectors including fiberglass, manufacturing, industry, engineering, oil and gas, and other sectors. According to the progress of BIO, Phase one is expected to be fully operational by the end of this year and fully rented by September of this year.

We will shortly move based on this progress to develop Phase two of BIO to be built on land of about 70,000 square meters. This will be adjacent to BIO Phase one in Salman Industrial City and will attract more tenants and even larger markets because the design of phase two will enable us to attract middle sized or smaller industries that require smaller space than what we currently offer.

What is the difference between BIO and BIIP (Bahrain International Industrial Park)? Are they your competition?

BIIP is the authority and the name of the park where BIO is located. The main difference is that BIO has prebuilt industrial units including the infrastructure and the units themselves. BIIP offers soft services in addition to the land. Those industries which require units that are ready for their operations to commission and start, while saving time, effort and cost of designing and building units, will be coming to BIO. We attract those types of potential tenants.

Would you say you saw less appetite from industrial companies to set up in Bahrain as a result of the 2011 events? You said the first quarter looks to be the most exciting since 2011.

Actually since the middle of 2012 we started receive an increasing number of queries from international companies as well as from local and joint ventures regarding a location or services that BIO can provide. In 2011, naturally the year was not a normal year for Bahrain.

Some queries were going on but some decisions were postponed or delayed especially by FDIs. But what we witness now is that even those that were postponed are back to Bahrain and back to dialoging with us and the BIIP.

BIO is in full coordination with BIIP to promote the services and BIO to international markets. Starting in 2012, more queries and progress were observed but in the first quarter of 2013, which is not yet completed, I can say this is the best quarter in terms of marketing, receiving queries and closing deals for BIO since its inception.

Why would you recommend setting up your offices at BIO versus other emerging regional centers?

It is true there are other alternatives for manufacturing facilities or industrialists who are looking for a location for their industries. The reasons that we think we can attract some of those tenants include the fact that the standard of the design and the facilities that BIO offers is a very high international standard to the extent that most of the existing tenants in BIO now are international companies.

The majority of them are international companies, many of which are companies who studied the market before coming to BIO, including Bahrain. They compared what other similar parks offer to what BIO offers, not just in Bahrain but in the region. They ultimately made the decision to be in Bahrain.

The second reason comprises of the geographical location, cost of doing business, ease of doing business and other commercial criteria. Some of the companies that selected BIO are Siemens, Kraft, Eurotech, Aramex, Bahrain Fiberglass and others.

What is the outlook for Bahrain for 2013 in terms of FDIs?

2012 was a very difficult year but as you know we achieved acceptable growth in Bahrain. I think 2013 and definitely 2014 will bring more investments into Bahrain. We are especially aware of the GCC “Marshall Plan” and the capital investments as well as stability. Political changes have been ongoing for ten years but it is moving along.

I think all these elements will represent a solid basis to attract more investments. As I said, the first quarter of 2013 has been the best ever for BIO and according to the communications and progress and plan, we expect even better achievements and results in the rest of this year.