Money & BusinessBahrain

Contagion – As we know it: Industrial sector in Bahrain

Industries and manufacturers all over the world are grappling with new questions the current situation seems to be throwing at them every other day. Bring into the mix the IMF’s declaration that the global economy is in a recession, and the industrial sector – unless you are a medical equipment producer, is quite sad and understandably facing a slowdown.

In Bahrain, a major chunk of the industrial sector is constituted by Oil and Gas. Aluminum Smelting and Tourism are others.

According to S&P Global Ratings, oil markets are now heading into a period of a severe supply-demand imbalance. In line with this, they anticipate a recovery in both GDP and oil demand through the second-half of 2020 and into 2021 as the most severe effects from the COVID-19 pandemic moderate.

Recognizing the strain this places on a large majority of industries in Bahrain, the government has announced an economic stimulus package of US$11.4 billion to try and minimise the impact on the business community.

Key features of the package include:

  1. Referring to a draft law concerning paying the salaries of all private-sector employees for three months from April 2020 from the unemployment fund, following constitutional procedures and in line with the Social Insurance Law.
  2. Paying individuals’ and businesses’ Electricity and Water Authority utility bills for three months from April 2020 (up to the costs incurred during the same period in 2019), whilst also restructuring government administrative costs to offset additional costs incurred by the government.
  3. Exempting all individuals and businesses from municipal fees for three months from April 2020.
  4. Exempting all businesses from industrial land rental fees for three months from April 2020.
  5. Exempting all tourism-related industry from tourism levies for three months from April 2020.
  6. Doubling the Liquidity Support Fund to US$530m. 
  7. Increasing the Central Bank of Bahrain’s loan facilities to US$9.8bn to allow debt instalments to be deferred and extra credit to be extended.
  8. The redirection of all Tamkeen programs (semi-autonomous government agency that provides loans and assistance to businesses) to support adversely affected companies, as well as the restructuring of all debts issued by Tamkeen.

To write about Bahrain’s industrial sector without considering the two giant players on the island would be rather impossible, so we looked at Alba’s and Bapco’s coronavirus precautions and reactions:

Aluminum Bahrain B.S.C. (Alba) in Askar is the world’s largest aluminum smelter ex-China.

With one of the biggest workforces in Bahrain (more than 3000), Alba introduced numerous safety initiatives across the plant and various departments as early as January 2020. COVID-19 awareness sessions for employees and contractors were and are being conducted by Alba Health Care team via video-messaging and online platforms.

The company has activated remote working for all employees, in particular women and senior staff. 500 volunteers from Alba are part of TEAM Bahrain, to help fight the spread of COVID-19.

Alba has announced its commitment to achieve its production target of more than 1.54 million metric tonne by 2020, while ensuring the safety of its employees and contractors.

Alba recently announced three infections among its contractors’ employees, and placed all who came in contact with them under quarantine.

The Bahrain Petroleum Company B.S.C (BAPCO) is one of the oldest oil and gas companies in the gulf.

Wholly owned by the Government of Bahrain, Bapco is engaged in the oil industry including refining, distribution of petroleum products and natural gas, sales and exports of crude oil and refined products.

The company has more than 2500 staff, and owns a 264,000 barrel-a-day refinery, and storage facilities for more than 14 million barrels.

Bapco’s health promotion unit held various awareness campaigns for employees, including the enforcement of social distancing protocols and regular sanitization of the massive facility. Informative posters have been put up throughout Bapco, also highlighting the correct technique of hand-washing. Also part of the facility, Bapco Club is only offering takeaway services while Awali Hospital held a #ICannotStayAtHome, I’mANurse campaign to raise awareness about the importance of staying in to help limit the strain on medical workers.

Since these industries usually see a lot of visitors, it is important that regular sanitization measures are followed. The high concentration of employees in these companies and the significance of their contribution to the national economy are also important factors to be considered.

In conclusion, we can hope that the stimulus package declared by the government helps to cushion the adverse effect this pandemic is having on the economy, both globally and in Bahrain. S&P Global Ratings adds further weight to this by revising its outlook on Bahrain to stable from positive which reflects its expectations that Bahrain’s neighbors will provide timely support, as needed, through the expected low oil price environment, allowing the government to continue implementing budget-deficit-reducing measures while also effectively combating COVID-19.


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