Meed | Bahrain industrial strategy aligns with GCC goals

Bahrain industrial strategy aligns with GCC goals

19 December 2023

With limited energy resources and land compared with its larger neighbours, Bahrain needs a targeted industrial strategy that supports economic development across the region and plays to the island kingdom’s strengths.

“We look to complement the GCC rather than compete,” says Industry and Commerce Minister Abdulla bin Adel Fakhro.

“We always look for industries where we can fit in each other’s supply chains so that we can substitute imports from outside of the GCC with products from within the GCC.”

The ministry has a strategy for each of its key sectors, with most starting in 2022 and typically running for four years. The strategies encompass industry, small and medium-sized enterprises (SMEs) and digital businesses. Targets include increasing contribution to overall GDP.

Target sectors

Bahrain’s industrial strategy covers five main target sectors.

“Downstream aluminium is very important because we have Alba [Aluminium Bahrain], which is the largest single-site smelter outside of China and continues to expand and grow production,” says Fakhro.

“We have a new downstream aluminium park to the south of Alba, and the big advantage for companies there is they can buy hot metal.

“We also provide other incentives, such as low-cost land and energy, and provide support with the purchase of equipment.

“Through the labour fund Tamkeen we can help with the workforce.”

There are also plans to expand Alba with the Line 7 project. Last year, a firm was appointed to complete the feasibility study for the project, which is expected to have a similar production capacity to the Line 6 expansion project – within the range of 540,000 metric tonnes a year.

Petrochemicals is another major industry for Bahrain.

“We have a presence in that sector with Bapco Energies and GPIC [Gulf Petrochemical Industries Company]. They are major producers, so downstream petrochemicals is another opportunity,” says Fakhro.

Like aluminium, there will be a significant increase in capacity in the near future as the $7bn Bapco Modernisation Programme (BMP), which involves boosting the total throughput at the Sitra refinery to 400,000 barrels a day (b/d) of oil, enters the final stages.

The other three industrial sectors are food manufacturing, medicine production and new sectors including semiconductors and the production of components for use in renewable energies.

In-country value

To support local industries, Bahrain is establishing an in-country value system that determines a supplier’s local content, similar to those implemented in Saudi Arabia and the UAE.

“Companies with a good in-country value score get a 10 per cent advantage on government tenders,” says Fakhro.

Bahrain is also working with other GCC states to create an in-GCC programme. “What we are trying to do with this is jointly recognise other countries’ [in-country] value. This means a product produced in Bahrain would get an advantage in another market, such as Saudi Arabia or the UAE,” says Fakhro.

“Likewise, a GCC employee would be equivalent to hiring a local employee. We are looking at different ways to become one market.”

These programmes are still being negotiated, with discussions at the GCC currently centred on determining what constitutes a GCC product.

“That is the start. When we have a clear definition of what a GCC product is, then we can open the doors,” says Fakhro.

As a small country with a long history of being a trading hub, Bahrain is keen to access larger markets. Hence its industrial strategy is outward-looking. As well as working on a GCC-wide in-county value system, there have been several other key developments in recent years.

“We have a very interesting project funded by [Abu Dhabi-based holding company] ADQ. It has four countries: the UAE, Egypt, Bahrain and Jordan. This group of countries came together soon after the Covid-19 pandemic to complete each other’s supply chain,” says Fakhro.

Known as the Integrated Industrial Partnership for Sustainable Economic Development, ADQ has backed the partnership with $10bn of investment. Its target sectors are agriculture, food, fertilisers, medicines, textiles and apparel, metals, petrochemicals and plastic.

We have a highly skilled workforce that is well-educated with a strong work ethic

Other focus areas

Semiconductors are of particular interest to Bahrain and the country hopes to play an active role in this sector.

“We are interested in that sector. The world realised that this sector will be critical in the future, and there needs to be manufacturing in other parts of the world so that one nation does not have a monopoly.

“The sector suits Bahrain because it does not require a lot of energy or land,” says Fakhro.

“Bahrain’s big asset is its people. We have a highly skilled workforce that is well-educated with a strong work ethic. This attracts all types of businesses in many sectors, especially in advanced manufacturing and the ICT sector,” says Fakhro.

Another important area of focus for the ministry is supporting SMEs and local startups.

“We are working hard to improve the ecosystem for SMEs,” says Fakhro. “The major challenge for SMEs is access to financing. This is not only in Bahrain; it is a worldwide challenge. Bahrain is home to over 300 multinational banks, but still, that doesn’t by default mean that SMEs have easy access to money.”

The other challenge is access to international markets. “Especially when you look at sectors such as manufacturing, Bahrain will give you limited growth potential. We support SMEs with exports. We have a government-owned entity, Export Bahrain, that facilitates export support for Bahraini companies, including SMEs.”

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Colin Foreman

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12 October 2026

Yemen’s Houthis have placed Saudi Arabia’s civil aviation infrastructure at the centre of their campaign against the kingdom. Two strikes on King Khalid International airport in Riyadh over the weekend killed 13 people and injured 320.

The deadlier attack hit a passenger terminal on the afternoon of 10 October. The General Authority of Civil Aviation (Gaca) said it killed 12 people, including four Saudi citizens, and injured 309. Airport operations were suspended pending a damage assessment.

A second strike hit Terminal 4 on the afternoon of 11 October, sparking a fire that killed a Pakistani resident and injured 11 others, according to Gaca. The Saudi-led coalition reported intercepting a cruise missile near the airport that afternoon. Gaca also reported an attack on King Fahd International airport in Dammam that evening, following a coalition report of a projectile falling near the facility the previous night.

The weekend strikes followed attacks on Abha International airport on 6 October and on King Khalid International airport on 7 and 8 October, the last of which included a strike on a Saudia aircraft. Gaca figures put the toll from the week’s attacks on Saudi airports at 19 dead and more than 350 injured.

The Houthis said they would continue operations inside the kingdom and that all Saudi airports were potential targets, with the exception of those serving the holy cities. The group says it is acting in response to Riyadh’s support for Yemeni government forces and a Saudi air strike on Sanaa airport. It has also claimed attacks on Saudi oil facilities, which Saudi authorities have not confirmed.

Aviation exposure

The attacks strike a sector central to the kingdom’s diversification plans. King Khalid International airport’s existing terminals are to be absorbed into King Salman International airport (KSIA), a 57-square-kilometre development with six parallel runways targeting a capacity of 120 million passengers by 2030 and 185 million by 2050.

Procurement on KSIA has gathered pace this year. In July, a joint venture of China Civil Engineering Construction Corporation and Dammam-based Mofarreh AlHarbi & Partners won an estimated SR800m ($213m) contract for enabling and substructure works on Terminal 6, which will add capacity for 40 million passengers. Turkish contractor IC Ictas and Saudi Arabia’s Al-Rashid Trading & Contracting recently secured a SR800m ($213m) contract for the airport’s Private Aviation Terminal.

Government-owned Saudi Royal Aviation set 8 October as the bid deadline for an estimated SR3bn ($800m) contract to build an aviation complex within the KSIA masterplan, the same day the Houthis struck King Khalid International airport and a Saudia aircraft.

Airlines have already adjusted. Flydubai cancelled flights to Riyadh and Yanbu up to 10 October and to Abha up to 11 October, and Etihad Airways reported extended delays on its Abu Dhabi to Riyadh service after the airport closed on 8 October. The UK Foreign Office has advised against all travel to areas within 10km of the Yemeni border.

Market reaction

The Saudi stock market’s response has been muted so far. The Tadawul main index fell 15.54 points to close at 10,360.74 on 11 October, the first trading session after the Saturday attack, with turnover of SR2.6bn ($693m). The session closed before the second strike on King Khalid International airport and the attack on Dammam, and Monday’s trading will be the first to reflect the full weekend.

The weekend also brought a separate maritime incident. UK Maritime Trade Operations said an oil tanker was struck by an unidentified projectile in the Strait of Hormuz on 11 October, with its crew reported safe.

Diplomatic response

The coalition described the 10 October attack as a war crime and said it would respond decisively. It said on 10 October that it had destroyed 136 military targets in Houthi-controlled areas and was working to dismantle the group’s ballistic missile network.

Egypt, Pakistan and Turkiye joined Saudi Arabia in an R4 group statement condemning the attacks and supporting measures taken by the kingdom in response. The Arab League also voiced its support for Saudi Arabia. On 11 October, Iran’s foreign minister spoke by telephone with his Saudi counterpart, Prince Faisal Bin Farhan, to discuss the escalation. The US and UK have also signalled the possibility of further support for the kingdom.

The escalation comes against the backdrop of the regional conflict, which has drawn Saudi Arabia into a renewed Yemen front after several years of relative calm following the 2022 ceasefire. The extent of the damage at King Khalid International airport, which Gaca is still assessing, and the speed at which international carriers resume full schedules will determine how far the attacks disrupt the kingdom’s aviation programme.

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The memorandum of understanding (MoU) was signed in Riyadh by Karim Badawi, Egypt’s minister of petroleum and mineral resources, and Abdulaziz Bin Salman, Saudi Arabia’s minister of energy.

Under the agreement, both sides will enhance cooperation in trading, transporting, storing and distributing crude oil, petroleum products and natural gas.

They will also expand cooperation on developing the infrastructure and logistics services that support these activities.

In its statement, Egypt’s Ministry of Petroleum & Mineral Resources said: “These efforts will contribute to improving energy market efficiency, enhancing the resilience and reliability of supply chains, and strengthening energy security.”

The MoU also provides for expanded cooperation in exchanging expertise and best practices in operating and developing fuel stations, as well as in transporting and tracking petroleum products and liquefied petroleum gas cylinders.

Additionally, the agreement seeks to explore investment opportunities in joint projects and promote exports.

The latest agreement comes as Egypt becomes an increasingly important export route for Saudi Arabia.

Due to disruptions and security risks affecting shipments through the Strait of Hormuz, Saudi Arabia has been redirecting crude exports via its East-West Pipeline to Yanbu on the Red Sea.

Meanwhile, the Bab El-Mandeb Strait, at the southern end of the Red Sea, has also become a security concern due to military activity in Yemen. Egypt offers an alternative route through the Sumed pipeline, which runs from Ain Sokhna on the Red Sea to Sidi Kerir on the Mediterranean.

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JGC evacuated its personnel from the site in the southern oil hub of Basra following the start of the regional conflict on 28 February, when the US and Israel attacked Iran.

The evacuation halted work on the project, which was in its final construction stage.

On 14 August 2026, Iraq’s Ministry of Oil announced that it had signed an agreement with JGC to resume work on the fluid catalytic cracking (FCC) project at Basra refinery.

One source said: “Even though the agreement to bring the evacuated workers back was signed about two months ago, there is still no sign of the evacuated workers on the project site.

“It is possible that they will return soon, but it is hard to tell what will happen next in the current security environment.”

Earlier this month, Iraq’s Ministry of Oil said it met with Japanese officials to discuss plans to commission the FCC unit under the Basra refinery upgrade project.

The statement did not say when the evacuated JGC workers would return to the project site.

Strategic project

Iraq’s state-owned South Refineries Company (SRC) sent JGC notice of the main contract award for the FCC package of the Basra refinery upgrade project in August 2020.

JGC was awarded the contract in consortium with South Korea’s Hyundai E&C.

The official contract signing ceremony was held in Baghdad on 1 October 2020.

The contract awarded to JGC, which uses the engineering, procurement, construction and commissioning model, was worth $3.78bn.

The FCC package is part of a broader project to upgrade the Basra refinery.

The project site is located about 12 kilometres east of Iraq’s southern city of Basra.

The wider upgrade project involves installing new facilities on land adjacent to the existing Basra refinery, including a vacuum distillation unit and a diesel desulphurisation unit.

In April 2021, France’s Axens won a contract in Iraq to provide four process technologies to SRC for the Basra refinery upgrade project.

The technologies that SRC selected are:
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MEED’s latest report on Iraq includes:

> COMMENT: Iraq’s reform window narrows
> GOVERNMENT: Al-Zaidi takes Iraq’s premiership under US shadow
> BANKING: Financial challenge tests Iraq’s resolve
> ECONOMY: Iraq enters era of resilience, reform and rising risks
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> POWER & WATER: Focus shifts to delivery of Iraq utilities expansion
> CONSTRUCTION: Momentum builds in Iraq’s post-war construction sector

To see previous issues of MEED Business Review, please click here
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Contractors are preparing to submit prequalification statements on 14 October for a contract to build Jordan’s Al-Hussein Bin Abdullah II International Stadium, located east of the capital, Amman.

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Main works are expected to begin early next year, with the stadium slated for completion in 2029.

The project will cover about 1 million square metres, and the stadium will seat 50,000 spectators.

The stadium is being built within the Amra City development, which is located about 40 kilometres (km) from downtown Amman and 35km from Zarqa and Queen Alia International airport.

MEED reported that preliminary excavation and site preparation began in June.

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The EMV – Amman’s flagship reform programme – aims to increase real income per capita by an average of 3% annually, create 1 million jobs and more than double the country’s GDP over the next decade.

The strategy envisages a leading role for the private sector, which is expected to account for 73% of the estimated $58.8bn investment required.

READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:

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Abu Dhabi’s Department of Municipalities and Transport (DMT) has announced plans to upgrade roads in Mussafah, improving links between the industrial area, Mohamed Bin Zayed City and Zayed City.

The scheme covers about 13 kilometres of roads on the E30 and 8th Street. It aims to reduce congestion, improve road safety and cut journey times.

The works include a new three-lane highway in each direction along 8th Street, with parallel three-lane service roads on both sides providing access to local businesses and facilities.

The upgraded corridor is expected to accommodate up to 4,000 vehicles an hour.

Other works include upgrades to four E30 interchanges, improved links to 8th Street and the E20, and modifications to nine junctions.

The DMT also plans to build two bridges connecting Mussafah and Mohamed Bin Zayed City, along with a pedestrian bridge.

Abu Dhabi is planning major investments to upgrade its road network across the emirate.

Last week, it disclosed plans for a major new transport corridor in the capital, comprising a 37km coastal route linking Al-Hudayriyat Island with the E11 at Al-Nouf.

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