Trade and Industry

Bahrain has long enjoyed the attention of many trading nations due to its central location in the Arabian Gulf.

Free-trade agreement major attraction for United States investors

Now the United States is about to enjoy the advantages Bahrain has to offer through the signing of a free-trade agreement between the two countries.

This is an opportunity for both countries to benefit from special commercial advantages. The free-trade agreement will not only attract more foreign interest to Bahrain, but will also provide the United States with numerous tax-free opportunities for investment. It is the first such treaty between the United States and a member of the GCC aimed at stimulating the flow of private investment between the two countries and the GCC region.

The free-trade agreement between Bahrain and the United States is expected to generate an open and easy flow of trade between the two countries as it removes commercial barriers and duties on trade in goods and services originating from either country. The agreement is also expected to enable American investors to enjoy current incentives and expand sector-specific benefits available to entrepreneurs wanting to locate to Bahrain.

Free-trade agreements are legal and economic outlines that regulate tariffs between involved countries. By importing goods that are expensive to produce domestically and exchanging them for exports, which it can produce more effectively, each country can both produce and consume more goods with trade. Free-trade agreements can also boost the investment climate, enhance the rate of technological development, encourage businesses to become more competitive, and stimulate economic growth for each country. As Bahrain seeks to improve its economic growth, the signing of the free-trade agreement with the United States is a significant step toward future prosperity.

The business environment in Bahrain is, despite bureaucratic inefficiency, sound and is predicted to become even more sophisticated with the enactment of the free-trade agreement. The proposed agreement will eliminate the tariffs on all trade between the two countries and encourage American investment inflows into Bahrain, particularly in the services, construction and engineering, tourism, education, health and environmental services sectors. The framework is also intended to reinforce Bahrain’s commitment to openness, transparency and the protection of intellectual property rights.

Overall, this significantly impacts the domestic economy by strengthening the quality of the labor force, increasing economic efficiency and improving economic relations with other countries. The aspiration to develop closer trading links exists at all trading levels and the execution of this approach will only benefit all sectors of business in participating countries.

Bahrain is a world renowned financial hub and a leader for Islamic finance in the Middle East. With a prime geographical location, top communications network, state-of-the-art infrastructure and tax-free environment, the kingdom of Bahrain has become an ideal base for United States interests.

Bahrain offers a wide variety of incentives to American investors. Noteworthy among these are no taxation on personal or corporate income and no withholding or value-added tax. Other competitive advantages are duty-free merchandise for re-export; duty-free import of materials and machinery for manufacturing; low costs for energy, utilities and rents; 100 percent repatriation of capital and profits; 100 percent ownership of business to foreigners; and 100 percent ownership of land by foreigners.

The free-trade agreement will give a boost to further liberalization of the Bahraini economy, spurring free-market development and attracting new investments to Bahrain. As such this agreement will help Bahrain to target a sound economic strategy based on foreign direct investment. In the future the free-trade agreement, with its aims for liberalization, competition and attracting foreign direct investment, will help to increase the competitive advantages of domestic firms on the global market. As for the future, the signing of the free-trade agreement between the United States and Bahrain is the first step in a plan to create a Middle East Trade Area (MEFTA) by 2013.

The Ebrahim K.Kanoo Group

The name of Ebrahim Khalil Kanoo is synonymous with Bahrain’s proud legacy of building successful business enterprises upon the foundation of strong family traditions. The Kanoo family is one of Bahrain’s most distinguished merchant dynasties having played for over 100 years a significant role in the development of Bahrain as a key trading entrepot between the Arab world and South Asia. An entrepreneurial and pioneering spirit characterizes the Kanoo businesses, and it was with great vision that Ebrahim Khalil Kanoo in 1966 secured the exclusive distributorship in Bahrain for Toyota cars and commercial vehicles, spearheading Bahrain’s automotive industry. In 1974 Ebrahim’s sons, Mohamed and Fuad, respectively President and Vice-president, assumed leadership and strategic direction of the businesses. By specializing solely on the Toyota franchise, the brothers built the E.K.Kanoo group of companies into one of Bahrain’s most successful automotive enterprises.

Since then, the company has added several other brands to its business portfolio, including Volvo, Citroen and SsangYong, increasing the choice for motorists in Bahrain. It has also acquired a comprehensive range of franchises which cater to the needs of commercial vehicle and equipment users, including Isuzu, Hino, JMC and other Chinese manufacturer franchises. In support of all these franchises, it has developed an extensive parts and service network throughout Bahrain to provide the optimum aftersales customer service. In addition, its Mercantile division supplies a wide range of automotive related products and services to the motor industry, while its Rental and Leasing division operates the largest fleet of leased vehicles in the country.

Despite this continued expansion, E.K. Kanoo still adheres to the key guiding principles of providing excellent customer service, an innovative approach to business, and a commitment to staff development.

Through their continued commitment to the development of Bahrain, the Kanoo family are a respected pillar of Bahrain’s business community and social fabric. As Mohamed Kanoo explains: “It is important for us to be committed to Bahrain, to give back to society and make sure that Bahrain prospers.” E.K. Kanoo is well known for its generosity to charitable institutions, their active internship program for those interested in careers in the automotive industry, and their scholarship programs for students. Additionally, the company is one of the main sponsors of the Bahrain International Circuit, helping to firmly establish Bahrain as an international automotive hub. As Mohamed Kanoo explains: “We grow with Bahrain, so we need to invest in the future. When Bahrain is healthy we are healthy.”

Employee training and development is recognized as a key priority in delivering customer satisfaction, and a crucial element for the Group’s continued progress. As Fuad Kanoo explains: “With training and development we build a strong foundation, something that will be on-going. It is important for Bahrain and the company, we put a lot of effort into this for our employees.” He continues,“You can work your way to the top of the pyramid, but the challenge is staying at the top.” With these priorities, and a commitment to continual improvement, E.K. Kanoo will continue the family tradition of building successful pioneering business enterprises with strong roots in the community.

With the forthcoming Free Trade Agreement, the Kanoo’s remain upbeat on the opportunity this presents Bahrain and its business community. However, Mohammed Kanoo adds: “The private sector has a responsibility to make the FTA with America work; we need to bring these benefits to Bahrain. It is important for Bahrain to grow with a strong partner like the US.” The Kanoo’s are strong believers in the strategic role of Bahrain in the region as a trading hub and encourage US businesses to use the island as a gateway to the region. As Mohammed explains: “Bahrain is a pleasant place to do business, the economy is open, the people are friendly and there is much potential in the region.”

The Bramco Group

“The Bramco Group is a diversified conglomerate with multiple interests, and operations across the globe.”

Starting out in 1977 in construction, it has expanded to a number of companies active in engineering, services, natural stonework, scrap processing, water desalination plants, shipping and marine services, and the supply and installation of weighing equipment.

Bramco Group companies are also involved in non-stick aluminium cookware, GRC design, and the supply and installation of SieMatic kitchens. In addition, the group has an aluminium die cast foundry for automotive components.

Bramco Group Chairman and Chief Executive, V.K. Dewan says that his greatest achievement is always customer satisfaction. After completing the Sultan Qaboos Grand Mosque in Oman, he received a letter from His Majesty the Sultan thanking him personally for the sheer dedication and professionalism rendered to the project. The Marble Institute of America (MIA) presented the special recognition award to Bramco for its intricate work done in the mosque.

The Group continues to expand on its success through a diversification program that is seeking to utilize the Free Trade Agreement and open up new avenues of business development. Specifically Dewan is continuing to expand into the US market through its subsidiary Natural Stone Depot, based in New York under the management of Kanika Dewan.

Natural Stone Depot President, Ms Kanika Dewan, a graduate from Wharton Business School, left her banking career to create a Natural Stone Depot in the United States and to build it up further by marketing Bramco Group’s skills in stone work in the United States with the aim of bringing stones from “Mines to Homes” and making “Natural stones affordable for masses”. Based on the free trade agreement, the group has participated on a very large scale in the first ever ‘Tile and Stone Show’ at Jacob Javits Convention Center in New York, for which Natural Stone Depot was presented a best stall award.

Kanika explains, “we are active in developing our stonework business. The FTA opens up many new opportunities for our companies, so we are looking to the US market much more.” Additionally, the Bramco Group is producing high-quality cookware products which it will soon export, and is undertaking feasibility studies for its companies in relation to the US market.

The Bramco Group is a proactive group of companies providing a strong link between the US and regional markets. With its experience in the region and readiness to engage in new business ventures, the future for the Bramco Group looks bright. Miss Dewan says, “we are ready to do business with the US. We have a strong reputation here and are ready to grow further.” She praises Bahrain’s business climate, saying, “Bahrain is a good place for business.”

Additionally the Bramco Group has been active in several large scale international projects like the Vankateshwara and Swaminarayan Temples in New Jersey, and the Hyde Park InterContinental hotel in London. It has also been involved in projects in Europe and across the region. As Dewan says, “we can handle any large scale international project – that is our strength.”

Construction

Abdulla H. Alderazi & Co. W.L.L.

“We are now moving aggressively to achieve growth and diversification.”

Abdulla Alderazi Co., established in the late 1950s, has long been a leader in Bahrain’s construction sector. More recently, the firm has been successfully transforming itself into a diversified trading and contracting enterprise. Under the leadership of Managing Directors Mansoor Abdulla Aldarazi and Fawzi A. Al Darazi, the company is entering a new phase. As Mansoor Aldarazi explains, “We were a conservative company but are now moving aggressively to achieve growth and diversification. We are busy reestablishing ourselves.”

Aldarazi adds that chief goals include creating a productive partnership to supply aluminum products to the local market and expanding trading operations involving small and medium-sized enterprises operating in the local market as well as internationally. He is a strong believer in the significant role that smaller and medium-sized companies play in the Bahraini and regional economies, and vows to promote continued growth of SMEs. “The opportunity should not always be given to the big firms, but to smaller companies as well,” he says.

The new direction the company is taking does not mean it will neglect its traditional specialties. As Aldarazi says, “This does not mean less concentration on Alderazi’s key strength, which continues to be to serve as the preferred subcontractor and partner for key civil, residential and infrastructure projects in Bahrain.”
Explaining his company’s success, Aldarazi cites decisive management and flexibility along with a commitment to customer service. “We try to make everyone happy. We work hard to achieve this,” he says. The company’s location in Bahrain is an additional advantage, he believes. “Bahrainis are the world’s best traders. Trade is in our blood and Bahrain is in a strong position now,” he points out.

Abdullah Alderazi Co. has positioned itself to serve as a reliable partner for American investors and companies wishing to enter the growing Bahrain and regional market.

Delta Construction

“We can carry out any complicated installation on time.”

Delta Construction, established in 1987 by Sheikh Isa Bin Mohamed Abdulla Al-Khalifa and partners, has grown steadily to become a diversified electrical contractor that has received the coveted “grade one” ranking by the Electricity Distribution Directorate.

Delta has participated in a number of major projects in Bahrain and elsewhere in the region, including the Al Amwaj Island project, Marina Mall, Bahrain Mall, Seef Residence and Sail Tower. Delta Construction has also contributed to big-budget projects as a subcontractor for partners like ALBA, GPIC and continues to work closely with the government of Bahrain and the private sector on a wide range of projects.

General Manager Mr. U. H. Neelakanta points out that Delta’s competitive edge is based on its highly trained staff of electrical engineers as well as its proven commitment to customer service. “Timely completion and quick response to clients even after delivery has made Delta Construction an appreciated partner throughout Bahrain,” he says.

Every client can count on good service, technical knowledge and expertise, and value-adding advice from Delta’s team of professionals. As Neelakanta explains, “In Bahrain we are known for our expertise. We can carry out any complicated installation on time, keeping the safety aspect in mind.”

As for the future, Delta Construction plans to focus more and more on fiber optics equipment anddevelopment as a means of ensuring continued rapid growth, and Neelakanta expects the company to embark on bigger jobs and new long-term maintenance contracts. To potential American investors and partners, he adds, “We are ready for business and welcome anyone to work with us. The number of projects is increasing rapidly, Bahrain is safe and secure, and there is a lot of potential. If American companies work with us, we can take advantage of this potential for our mutual benefit.”

AO Group

“AO Group is totally committed to quality and safety.”

The AO Group is a leader in Bahrain’s construction and trading sectors, providing world-class products based on three decades of experience. AO specializes in supplying architectural, plumbing, joinery, ferrous and non-ferrous products and water-supply systems to local and international companies, and is known for its exceptional customer service and world-class standards.

As Managing Director Raed Saleh points out, “AO Group is totally committed to quality and safety, and now working on achieving ISO 9001 and ISO 9002 certification.” AO Group invests extensively in research and development as well as staff training to ensure it will maintain its leading role.

The AO Group’s construction division, AO Contracting, is known for its on-time completion of projects and has built over 1,000 dwellings for Bahrain’s Ministry of Works and Housing. “We are now working on lower-cost construction of houses for low-income families,” Saleh explains. The innovative new system AO has developed features aluminum framing that will require less labor. Sample houses will be launched in early 2005. In addition, AO has become a leader of warehousing construction and management.

AO’s trading division, AO Trading, specializes in providing pipes, fittings and accessories used in the transportation of water, gas and waste water. The company maintains extensive stocks of pipes in a variety of materials and is the local representative for a number of international manufacturers. AO Trading is currently investigating establishing a valves assembly plant.

One of the group’s fastest growing divisions is AO Manufacturing, which produces aluminum windows, doors and other aluminum construction elements as well as double-glazed windows. With a new 180,000 sq y double glazing production facility; this division is set for further expansion. AO’s Metals of Bahrain division specializes in the production of non-ferrous metal products for local and international clients, and

AO has been granted a Primary Magnesium production license.
The dynamic AO Group is well placed to partner American companies in Bahrain.

The Shaheen Group

“We have a new look and modern management.”

The Shaheen Group, founded in 1958, under the name of Awalco, has steadily expanded over the years and today has four key divisions, which include Gulf Services, specializing in electrical, fire & security detection and prevention systems; Awal products, which focuses on assembly, sales and service of air-conditioning equipment; Gypsum Division, supplying a wide range of gypsum designs & products for the local construction industry; and Hilti Division, which operates with an international partner. The Shaheen Group works with many well-known international companies such as Honeywell, Protectowire and Friedrich Airconditioners, among other leading international firms.

CEO Sager Shaheen, son of the company’s founder, is currently streamlining and reorganizing the group to support his plans to expand regionally. He says, “We have been healthy but stagnant, but now we are changing everything to multiply the size of the company. “We have a new look and modern management.” Among current projects, the company is currently constructing 10 new warehouses to cater for their new expansion.

Sager Shaheen, who was educated in the United States, is seeking American companies to work with the Shaheen Group. He explains, “We are looking for American companies for partnerships and joint-ventures and are looking to deepen and strengthen business relationships. We are interested in aluminium or plastic related projects and re-export.” Given its long-term success, the Shaheen Group is uniquely positioned to play a strong regional role and has the expertise and experience to serve as a reliable partner for United States companies wishing to enter the regional market.

Sager Shaheen himself is well known in Bahrain, having served on the board of directors of the Gulf Petrochemicals Industries Company, Bahrain Development Bank, Bahrain Aluminium Extrusion Company & Gulf Organization for Industrial Consulting as well as holding numerous posts in the Ministry of Development and Industry. He recently was named an independent consultant for the prestigious United Nations Industrial Development Organisation (UNIDO). Urging United States investors to contact him concerning potential win-win partnerships, Sager Shaheen says, “Bahrain is safe and competitive, a good place to invest and serve the regional markets.”