Bahrain invests more into plastics industry

Bahrain is on the recovery path with figures indicating that the kingdom is regaining the confidence of investors. Industrial activities, which saw some wavering in the past due to the political uncertainties, are slowly gaining momentum.

Bahrain’s HRH Prime Minister Prince Khalifa bin Salman Al Khalifa urged initiatives to support the trade sector and boost the national economy. In one of his speeches, he stressed the strong cooperation between the government and the private sector for the country to achieve its development goals and the role played by the private sector in the overall economic development.

Bahrain’s economic growth rose in the in the third quarter of 2012 after a decline in the period April-June 2012. Analysts expect a recovery spurred by the robust income from oil and the return of political stability. Gross domestic product, adjusted for inflation, grew 0.7 percent quarter-on-quarter in July-September 2012, according to the Central Informatics Organization. This is an improvement to the 1.3 percent drop in the second quarter, which was the first quarterly decline since a 6.6 percent decrease in the first three months of 2011. On an annual basis, Bahrain’s real GDP, grew 3.1 percent in the third quarter, a slowdown from a 4.3 percent growth in the previous three months. This uptick was mainly due to non-oil economic activities, which grew 5.9 percent in constant prices in the third quarter, although construction and real estate still expanded at lower single digit rates

Output in the hydrocarbon sector, which accounts for almost a third of Bahrain’s $ 29 billion economy, was down 7.1 percent year-on-year due to a roughly 10 percent decline in crude production from the Abu Safa field.

Robust plastics industry
Not to be ignored is the optimism being directed towards Bahrain’s plastics industry. During the press conference preparatory to Arabplast 2013, the organisers announced that similar to its strategy that led to the financial sector boom in early nineties, Bahrain is investing in the production of plastic polymers to cater to the annual plastic consumption growth in the Gulf region. A large number of Bahraini investors -- including banks, manufacturers and funding companies -- are investing in the rapidly growing GCC polymers industry. One of the key drivers to growth is Bahrain’s efforts to raise its share of petrochemical production to boost the kingdom’s economy and raise its industrial level. Although only 20 percent of the GCC petrochemical products are for the plastics industry, they account for 70 percent in terms of value. The region is predicted to become the second highest per capita consumer of plastics in the world by 2020.

Bahrain recognises that its petrochemical industry will always be the backbone of its plastics industry, and plays an important role in the kingdom’s economy. The petrochemical industry has been contributing to creating new downstream industries in Bahrain such as chemicals, detergent, paint, medical and industrial gases, plastics, synthetic sponges, glass and heat insulators. All these sectors are now attracting investors due to their promising markets. Bahrain's petrochemicals industry exports to more than 150 countries worldwide.

Speakers at the Arabplast press event also hailed investments made by Bahraini business community into its neighbouring countries’ polymers industry which is similar to the country's efforts towards financial boom in early1990s.