Kraft, bringing dairy products to the Middle East

Kraft, bringing
dairy products to
the Middle East
An interview with:
Andrew Trevis,
Andrew has been in Bahrain for
three years. He is married with three
children and an avid sports fan.
W
hen 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
“The numbers just
market, Kraft International set
stacked up. We were
out in 2006 to find a location for
profitable within our first
manufacturing both dairy products
year of operation.”
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 25kilometre King Fahd Causeway road link to Saudi Arabia, Kraft’s
biggest Gulf market, was a major consideration.
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 access
Today, 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 labour
From 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 Bahrain
100% foreign ownership
Proximity to Saudi Arabia
Duty free access to all Gulf Cooperation Council markets
Competitive, skilled work force
Attractive expatriate lifestyle
One-stop-shop investment park
Free market environment
Access to the wider Middle East
About Kraft
Kraft is the world’s secondlargest 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.
About Bahrain
Bahrain 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.
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
invest@bahrain.com
www.bahrain.com
Office Hours:
Sunday-Wednesday 8am-5pm
Thursday 8am-2pm (GMT +3hrs)