Given the rapid pace of economic recovery and Bahrain’s long-term development strategy (Vision 2030), on what path is the country at the moment?
Bahrain Vision (BV) 2030 talks about opportunity, growth, and transparency. The goal is to build the economy for the people (i.e. create more job opportunities). A lot of the programs within the BV 2030 focus on Bahrainis. Human capital continues to be our core strength. Education in the kingdom started about 70 to 80 years ago. This includes the establishment of formal schools for women. Everybody has access to proper education.
With regards to our company and the local manpower, our industry has a lot of sophisticated processes, yet Aluminium Bahrain (Alba) has achieved 87% Bahrainization.
Bilateral relations between UK and the Bahrain spans almost two centuries, during which time a lot has changed between the two nations. How would you describe British relations within Alba?
If I were to talk about Alba and the UK, it is a very interesting connection because Alba was structured by Bahraini and British investors. The initial Alba plan was conceptualised by a British company. Indeed, the UK was there from day one. We conducted a study, and our UK-based investors came in and built the smelter. We went on from there. It is a natural cooperation.
As for the larger Bahraini population, you are right. We do have strong ties with the British. For people of my generation, the common destination for higher education is the UK. A lot of people my age are graduates of British institutions.
The oil industry continues to be a strong economic driver in Bahrain but we are witnessing a decreasing share of this sector in the economic make-up due to major growth in industry and services. How to keep diversifying?
We are looking to further diversify from oil and create a real economy that has the capacity to develop itself. Sooner or later, the importance of oil will decline. Oil revenues are being re-injected into the system to build a real economy. Today, oil contributes less than 20% to the GDP. The banking sector is bigger than the oil sector. As it is, you can say that the Bahraini economy is really diversified.
We have economic and labour market reforms spearheaded by HRH the Crown Prince Salman bin Hamad bin Isa Al Khalifa. He is creating a future away from oil through the implementation of progressive government reforms and the introduction of liberal economic strategies with the private sector driving the growth. He delineated the role of the government and the private sector, with the prior as the regulator.
Earlier on, you touched on the idea of veering away from a job-seeking mentality to a job-creating mentality. What needs to change in society to achieve this?
By striving to create jobs rather than simply seek them, our young people control their own future. A portion of government revenues derived from corporate taxes is being re-injected into the economy through Bahraini training programs, enabling them to be entrepreneurs. You have feasibility studies, and support services (e.g., financial, accounting, etc.).
We cannot depend on the government to create jobs. Its job is to regulate and create an enabling environment. Job creation is the role of the private sector. The way forward is to encourage young people to start their own businesses.
Young people are generally energetic and creative. They come up with bright ideas to start their own businesses.
Indeed, the Bahraini youth love to travel and study abroad. They respect their culture, but collect the best from all over the world to bring it here.
Yes, and many of them have great ideas for business – things that we did not even think of. I think encouraging these young entrepreneurs is the way forward.
Speaking of job creation, what is the spillover effect of Alba’s job creation?
Alba has about 2,700 people in its employ. The industry that has developed around our company employs more than 5,000. The company generates twice as many jobs around it. These are all driven by the private sector. This is mainly due to the 50% of the production that stays within Bahrain and goes to down streaming. We are hoping to produce around 900,000 metric tonnes of aluminium soon. That is our target.
In terms of domestic and overseas consumption, how does the company achieve a balance and create a very strong foundation for the downstream knock-on effect?
We try to achieve that in various ways. As you know, Alba is known for the quality of its products. We can compete in quality and service. We also have niche markets. We produce specialised premium products. We get as close to our customers as possible. We have offices in Europe and the Far East. We offer that personal touch and find out exactly what the customer needs. Through this, we hope to achieve customer loyalty.
There is always a limit to how much one can grow, but we can always get more economic benefits by getting into niche markets. We produce based on customer demands. Before the end of the year, our production is already committed.
Quality and timeliness are our key advantages. Our customers can be sure that they get what they want when they want it. Our production is planned way ahead, based on our contracts with our customers. Every customer has their own set of demands. They come from different industries requiring different components. We have to respect that.
In this respect, you have positioned Bahrain as an aluminium hub both for production and downstreaming. How would you assess Bahrain as a place for business?
It is a very stable country with laws that are constant and functioning. Business people can be sure that when they come here, the laws do not change. Bahrain believes in the importance of transparency and the rule of law. Procedures are very clear.
Moreover, it has good relations with big economies like the UK, and can capitalise on that experience. After all, we are developing Bahrainis.
Testament to our success is the variety of businesses that we have from other parts of the world. They come here because they know that Bahrain is a good place to be in.
In a recent interview, the British Ambassador talked about naming unlisted high-value investments in the country (as the UK moves to extend its investments from the Commonwealth and Europe to the rest of the world). We understand that Alba had itself listed in the London Stock Exchange (LSE) about three years ago. What is the potential and openness for foreign investment?
Yes, Alba launched an IPO about three years ago. We did this not because we needed more capitalisation, but to promote transparency. It was a way for us to share what we have going in the company. Being listed requires you to follow the international best business practices. Standards are particularly high when you talk about getting listed on the likes of the LSE. We picked the LSE because of its high standards and disclosure propagandas. That we have been accepted there means that we have met their criteria. That, to us, is a big achievement.
What are your expectations for your current expansion plans of Line 6?
Alba was established in the 1970s (about 43 years ago). When we started, we only produced around 130,000 metric tonnes of aluminium. Now, production is almost 900,000 metric tonnes. Alba has grown significantly throughout the years, and has created jobs for thousands of Bahrainis. Enterprises have developed around it. They too enjoyed a significant growth surge. Our $4.6-billion investment seeks to expand our capacity to 1.4 million metric tonnes (if not more). That is where we are heading.
There is a huge demand coming from the Saudi Arabian cities and the GCC. We have the means to meet this demand. We have the talent, capabilities, and logistics. In terms of the projected capacity of covering 600% of world production, with all the expansion taking place, we will reach about less than 50%. We have the natural advantage. We have a strong hydrocarbon industry. Petroleum and natural gas continue to be our strength. We are very centrally located. We are very close to Africa, Europe and the Far East.
Even during these tough times, Europe continues to be a good market for us. Things in the US are also starting to pick up. There is a huge potential for aluminium for the region. Alba is aggressively capitalising on those advantages. In terms of the expansion plans, we are firmly forging forward. Someone has already been appointed for the feasibility studies. We have already appointed financial advisers. We selected the technologies. Things are happening.
I think that this project is a must for us. It aligns well with our natural direction.
How do you intend to face the unavoidable challenges that come with energy price increase?
I believe that we have to look to the future. We have to be commercially viable. Energy is a commodity. It is a resource that we should not waste. That is why when we expand our operations, we make sure that we follow the highest energy standards. We go beyond what the average finds acceptable. We opt for the most energy efficient power plant (that which follows the highest standards and consumes the least gas).
We value the environment and follow the strictest standards. There are no fumes. Our operations are very clean. All of our production is re-circulated. Precious energy resources like gas are maximized and re-used. It is a huge investment, but we think that it is worthwhile if it means protecting our future. We have to think of the future generations.
Energy conservation and social responsibility are crucial components that pay off in the long run.
You mentioned social responsibility and we know Alba is the strongest advocate of CSR in Bahrain. What role does CSR play in the daily life of the management of Alba?
Here in Alba, we take that very seriously. We believe that it is our duty as good corporate citizens to give back to society. Corporate social responsibility (CSR) is not a PR stunt. It is something real that positively impacts the lives of people.
We hope that through our efforts, we encourage other groups to follow suit. For instance, the agreement that we signed with the Northern Municipality to redevelop Malkiya beach seeks to protect our country's coastal environment. Our very own Alba Community Service Committee (ACSC) led the coastal clean-up drive.
Together with their families, they removed waste and debris along the Malkiya coastline. They planted trees and did some maintenance work for the beach facilities (e.g. electrical work, light bulb replacement, painting, equipment repair, etc.). Through the efforts of our volunteers, their families, our contractors and suppliers, we got that beach back into shape for the community. Total output amounted to almost BHD1 million, and mostly came from our contractors (more than 20 of them).
ACSC is a team of almost 200 people dedicated to social work. Only 40 of them are Alba employees. The rest are volunteers. The organisation's activities include coastal cleanliness, road safety awareness and healthcare programs (e.g. first aid, blood donation campaigns, hospital visits, etc.).
ACSC goes to show that if you have the will to move people, you can do a lot.
A couple of months ago, I met with the Social Development Minister to represent the company as it contributed BHD100,000 to the Social Work Support Fund (SWSF), a financial grant program that mobilises private sector-led development projects that positively impact the lives of the people in the community. We have been a contributor since 2006.
In terms of the fund we set up, every year people are given the opportunity to submit proposals for meaningful and well thought-out projects. They are given a mark from 1 to 10. Each mark amounts to BHD1,000. If your project gets 5 out of 10, you get BHD5,000. If you get 10 out of 10, you get BHD10,000. We did that independently. The Ministry of Social Affairs (MSA) and Bahrain University (BU) are involved. The process has been such a success that it has encouraged more people to come in. Alba is proud to have pioneered this project because it allows people to grow, and be forward-thinking. It taps on values such as efficiency and innovativeness.
These programs present good business opportunities for people with the potential to succeed.
Bahrain has a lot of opportunities for people to come in and start their own business. We encourage them while they are young through our various programs. We work closely with the likes of Tamkeen and INJAZ Bahrain. Tamkeen is a Bahraini company that provides training and education programs. It was set up in 2006 to foster business development and support the growth of enterprises and entrepreneurs. INJAZ Bahrain is a youth empowerment program established in 2005. It aims to prepare our youth for business and economic development.
Together, we strive to encourage Bahraini entrepreneurs and enterprises to be the best that they could be. We tell our young people to keep trying. If they fail now, they can learn from their mistakes and try again.
What is the role of aluminium recycling at Alba, given the country’s internal consumption and the big downstream industry that exist in the country?
Alba is a major industry player that hopes to encourage people by example. Aluminium recycling is a major part of the business and it has a tremendous positive environmental impact. We hope that through what we do, we get more people to consider environmentally friendly programs like recycling.
A clear sign that Bahrain has spearheaded many things.
Yes, Bahrain has a long history of being a pioneer. It introduced the banking industry into the region. In terms of aluminium, for years we were the only player. It set up the first airline in the region. Bahrain was also the first to take Formula One (F1) into the region.
In this regard, what is Alba’s stand on Bahrain’s progressive policies on gender equality?
Yes, we do promote gender equality. Women empowerment is a natural thing for us. We have never questioned it. A lot of the senior officials in government are female (as you know, none of those in office have been appointed – they got the job because they were the best). Our progressive policies firmly set the grounds for gender equality.
That is what we have seen since day one: Bahraini women are empowered.
Yes, they are. You can see that in companies like Alba. Here in Alba, we had the first female engineer (who eventually became the chief engineer), as well as the first female doctor to be in charge of an industrial plant’s medical facility. Alba also has the highest number of women personnel in any industrial company in Bahrain. These women thrived in one of the toughest industries.
Personally, I think women are passionate. Over the weekend, I get several work emails from women. I hardly get any from men. These women go home, run errands then take time to go to their desks and do some work after office hours. That is commitment. People are treated the same way. Everyone has the opportunity for growth and development. Everyone is encouraged to do better.
The same is true for business. When you come to Bahrain and set up a business here, the moment you get Bahraini commercial registration, the same rules apply to you. It does not distinguish foreign and local ownership. When you register your business in Bahrain, you are Bahraini. It takes a lot of vision to implement that sort of forward-thinking strategy.
With all the future plans already under execution and with a tremendous social contribution, what is next? What is the company’s vision for the next 10 years?
In the next 10 years, we can only see our strengths increasing. Competition in the region is the best thing that has happened to us. It paved the way for companies to be more efficient. Competition made us better. It keeps us constantly on our toes. In this sort of environment, we are forced to be continually competitive and commercially viable.
We can reduce costs by increasing our efficiencies. We can expand to absorb our overhead costs, and introduce new processes. This industry requires us to be able to compete in quality and price. Here, we have a natural advantage. There is a lot of room for growth. The potential is huge.
We benchmark ourselves against the best players, globally. We use best international practices and keep abreast of what is new in the industry. Right now, we export to the US, Europe and the Far East. These are very competitive markets, yet we are able to sell our products in each of those territories. That is because we have the right project and the right quality.
How do you achieve this performance?
By investing in our people. Human resource development (HRD) and professional growth continue to be chief priorities. We always look for ways to help enrich our employees’ lives and equip them with the right skills and knowledge to go further. It is all about doing more for our people.
Alba has a highly skilled and competitive workforce. We do our best for them, and they do their best for the company. You will find Bahrainis everywhere. They work in various industries all over the world.
Apart from your employees, what other factors have driven your company’s impressive performance?
The company is highly transparent. It works closely with its trade unions. We keep everyone informed through our reports. They know how the company is doing. They are a part of it. For instance, when we planned for the IPO, we made sure that we had an employee incentive scheme (EIS). This scheme allows our employees to be shareholders. Every single employee of Alba is a shareholder. These shares were allocated to them by the company. Our people are truly a part of us. I think that is a very healthy process.
Alba has always led by example. We have to do things right because other people will refer to us when they look to Bahrain to do the same thing. We are always happy to help our colleagues. We may compete with them, but we continue to keep our doors open for collaborative projects. Our CEOs meet regularly. When they need assistance, we are glad to extend our support. This is our duty as a good citizen of Bahrain and a responsible member of the GCC. We ensure our company’s continued strength by doing what we can to boost the strength of those around us. After all, the key to success is to surround yourself with it.
Next week, we are going to have the board of director’s meeting. Before that, we will have a day dedicated to discussing things with the board (i.e., how they should function, the best role they could take, expectations, etc.) It is all very transparent. We work with them. We listen to them. We have a group that will talk about strategies. We (the management and the board) sit together to discuss these things.
UK-Bahraini relations will soon reach 200 years of joint history. What is your evaluation of the bilateral relations and how can British investors get to know more about the opportunities in the country?
It has been good. Internationally, the UK and India are two of the countries that Bahrain has had a long and strong relationship with.
Potential investors can see that we have a lot of good things going on here, and they want to learn more about these opportunities. We welcome them here. We normally do not approve of people investing in the country from a distance. We encourage them to please come so that they can have a better appreciation of what they are getting into. Come to Bahrain and see things for yourself.