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Kraft, bringing dairy products to the Middle East
Kraft, bringing dairy products to the Middle East
When looking for a factory location in the Gulf, Kraft selected Bahrain for its free market environment,
proximity to Saudi Arabia and skilled local workforce. As Kraft’s regional sales have rapidly expanded, this has yielded huge import duty and freight savings.
Just as Middle Eastern consumers have developed a taste for fresh dairy products and other western foodstuffs in the last decade, so sales of these goods have soared. With the region
becoming an increasingly valuable market, Kraft International set out in 2006 to find a location for manufacturing both dairy products and its Tang powdered drink.
One of the best known global food brands, Kraft previously exported these products to the region from Australia and the United States. By manufacturing within the region they planned to save on freight and import duty costs.
After a short search, Kraft selected Bahrain for its Gulf plant, opening it in October 2007. Kraft was chiefly attracted by the absence of foreign ownership restrictions. Additionally, the 25-kilometre King Fahd Causeway road link to Saudi Arabia, Kraft’s biggest Gulf market, was a major consideration.
An interview with:
Andrew Trevis, Andrew has been in Bahrain for three years. He is married with three children and an avid sports fan.
“The numbers just stacked up. We were
profitable within our first year of operation.”
100% foreign ownership“Kraft decided on Bahrain after looking at various other locations and hearing about the Bahrain International Investment Park’s incentives and facilities,” explains Andrew Trevis, Director of the Bahrain plant. “Being able to have 100% foreign ownership was essential, but he also liked the fact that the park offers a one-stop-shop. Also, we have an exemption from recruitment restrictions for five years, and the talent pool is quite possibly the best in the Gulf.”
Cost-efficient market accessToday, the state-of-the-art factory produces 60,000 metric tonnes of Kraft cheese and Tang products annually for the GCC region. More than 60% of this goes to Saudi Arabia. In total, the Bahrain plant manufactures
more than 50% of the dairy products and powdered drinks sold in the region, and this percentage is likely to increase. What
is more, the substantial savings anticipated on
freight and manufacturing within the GCC common market have been achieved.
Competitive, skilled labourFrom a workforce perspective, Kraft concluded that
Bahrain’s labour was cheaper than Dubai’s and more skilled than other rival locations. Furthermore, Tamkeen,
the Bahraini Labour Fund tasked with improving the local workforce’s skills, is beginning to train people in this sector
ensuring a steady flow of talent for Kraft.For Kraft’s expatriate workers, Bahrain is a good place
to live. “The lifestyle is very good,” says Trevis. “This is a free country that is not at all restrictive. Our wives like it. The fact that they can find work easily and enjoy a high quality of family life is
a strong selling point.”With the regional market for its foods continuing to
grow, Kraft is already planning to expand the Bahrain plant in order to serve developing markets such as Iran, Iraq and Pakistan.
Reasons for Bahrain100% foreign ownershipProximity to Saudi ArabiaDuty free access to all Gulf Cooperation Council marketsCompetitive, skilled work forceAttractive expatriate lifestyleOne-stop-shop investment parkFree market environmentAccess to the wider Middle East
About KraftKraft is the world’s second-largest food and beverage company, with Annual Sales for 2008 of more than $42bn. The company has 103,000 employees worldwide with 180 manufacturing facilities and sales in 150 countries. The Kraft Foods plant in Bahrain will be one of the largest food and beverage factories in the GCC employing about 250 people to produce and export cheese and powdered beverages to the whole of the Middle East region.
CONTACT
To find out how the Bahrain Economic Development Board can help you set up and support your business long-term, contact:
The Business Development Department +973 1758 9969 [email protected] www.bahrain.com
Office Hours: Sunday-Wednesday 8am-5pm Thursday 8am-2pm (GMT +3hrs)
About BahrainBahrain provides excellent access to a Gulf market with a growing demand for imports, yet has highly competitive costs. In sectors such as food processing, the region is still highly dependent on imports. Bahrain’s costs for such things as industrial land, construction, energy and water are very competitive.
