Bahrain laptop assembly facility to capitalise on leap in demand

Saudi company given permission to set up operations, as laptop shipments soar

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By  Published  August 31, 2006

A Saudi company has been granted permission by the authorities in Bahrain to establish a laptop manufacturing operation there, which would be the Middle East's first technology manufacturing plant.

Qeyam Al Arab, or Arab Values, which is based in Riyadh, is currently in talks with Japanese manufacturers to select a technology partner, according to reports in local media. There is no Bahraini company involved in the business.

The US$92 million manufacturing installation is expected to create around 260 jobs, many of them for workers in the IT sector.

Managing director Sameer Al Laqmani said: "We expect to be operational and to be marketing our products towards the end of the year.

"This will be a major company that will export laptops from Bahrain to all over the Middle East."

Al Laqmani added that the firm aimed to bring down the cost of laptops for the Middle East market.

However, there is confusion over whether the plant will manufacture laptops or assemble components.

Khalid Fathallah, acting director, industrial projects directorate, Bahrain Ministry of Industry and Commerce, said that the application covers the production of processors, monitors, RAM, hard disks and software, but said there would probably be little manufacturing activity. "As per my understanding, it's assembly," he said. "At the end of the day, they will import the parts and they will assemble them. I think 99% is assembly."

Fathallah added: "They required approximately 6,000 square metres of industrial land. This will be probably in Al Hidi industrial area."

Acer is currently the leading brand for laptops in the Middle East and sells more than 25,000 units a month.

"We have an assembly plant in the UAE that turns out 10,000 desktops a month on average, and if you run it at full capacity it's about 15,000," said Gautham Reddy, marketing manager for Acer Middle East. "We have about 70 people in there."

Reddy said that the manufacturing process for laptops was particularly labour-intensive, and estimated that with 260 staff, the plant would only be able to produce around 2,000 laptops a month.

He said: "So we're not talking big numbers, but it could be a start for some small company."

Branded laptop vendors tend to outsource both components production and the assembly of the final product.

HP was the top PC vendor in the Middle East last year. It has had a desktop assembly facility in Saudi Arabia since 2003, but has no plans to produce laptops there. Hanan Kamal, marketing manager, personal systems group, HP Middle East, said: "We serve the whole Middle East market from there. Notebook manufacturing doesn't include many local components. It needs more sophisticated assembly lines." He was unable to disclose how many units are manufactured in its Saudi plant or the number employed there.

The news comes as an IDC report found that PC shipments in the Gulf increased dramatically in 2005, largely due to strong demand for notebooks. PC shipments in the GCC countries increased by 43% last year to more than 1.6 million units.

Laptops accounted for 48% of the total.

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