Manufacturing

$100m aluminium plant signals Bahrain’s industrial push

January 10, 2024, 4:48 PM

The new Conexus plant will process aluminium from national manufacturer Aluminium Bahrain

Plant to cost $100m
Alba largest smelter outside China
Manufacturing is 13.9% of GDP

Conexus Resources Group has launched a $100 million aluminium rod plant in Bahrain, the latest project to emerge as the Gulf kingdom seeks to enhance its manufacturing sector.

The UK company has announced the inauguration of Konexus Aluminium, which will process liquid metal from Bahrain’s national manufacturer Aluminium Bahrain (Alba) to serve regional and international clients.

Alba is the largest single-site smelter outside of China, and produces more than 2 percent of the world’s aluminium output.

Last year it produced 1,620,665 metric tonnes. In the same period, Bahrain’s manufacturing sector grew to the second largest non-oil contributor to real GDP at 13.9 percent.

Manufacturing remains a focus as one of the five priority non-oil sectors outlined by Bahrain’s Economic Recovery Plan.

Dr Khaled Fahad Alalawi, assistant undersecretary for industrial development at the Ministry of Industry and Commerce, described the new plant as a “testament to Bahrain’s thriving manufacturing sector”.

Brijender Pal Singh, CEO of Conexus, said Bahrain was a “clear destination of choice” given the availability of skilled local talent, duty-free trade and its location.

Analysts at BMI forecast real GDP growth of 2.7 percent this year, supported by stronger exports and higher investment.

“Greater non-oil activity and a smaller decline in the oil sector, along with an economic rebound in Bahrain’s main trading partners, such as Saudi Arabia and the UAE, will support goods export growth,” the analysts reported.

Bahrain’s Industrial Sector Strategy sets out a manufacturing plan that includes the recently launched US Trade Zone and the development of the Aluminium Downstream Park.

Situated near the Alba factory, the park aims to attract more local and foreign investment to place Bahrain “at the forefront of aluminium manufacturing on regional and global levels”, according to Alalawi.

While China, Europe and the US are the world’s top aluminium producers and users, the Gulf region has undergone an expansion in production, export and use in recent decades.

There are now six major smelter plants in the region in Bahrain, Saudi Arabia, Qatar, Oman and the UAE.

Alba posted a 64 percent drop in third-quarter profit to $46 million, driven by lower London Metal Exchange prices and lower premiums.

Changing relationships

Bilateral trade between the UK and Bahrain has fallen off in recent years.

Total trade in goods and services was £1.1 billion in the year to the end of the second quarter of 2023, a decrease of 24.2 percent compared with the year-earlier period.

Total UK exports to Bahrain amounted to £644 million, down nearly 7 percent, while UK imports from Bahrain were £486 million, down nearly 40 percent.

Crown Prince Salman bin Hamad Al Khalifa, prime minister of Bahrain, visited the UK in July and signed a Strategic Investment and Collaboration Partnership deal to facilitate additional investment of more than £1 billion into the UK and drive greater cooperation in clean technology, business services and manufacturing.