Kraft to invest US $40m in its first regional plant

One of the world's biggest food producers is set to open a manufacturing plant in Bahrain by October 2007.

  • E-Mail
By  Roger Field Published  August 2, 2006

Kraft Foods Inc, the world’s second largest food and beverage producer, is to construct a US $40 million manufacturing plant in Bahrain’s International Investment Park. Kraft is due to start construction of the 60,000 square metre plant in September 2006 and completion is expected in October 2007, Patrick Satamian, managing director of Kraft Foods in the GCC confirmed to Retail News Middle East. The new factory will employ some 250 people and will produce cheese and powdered beverages for markets across the Middle East. The development, which is the first direct investment by Kraft Foods in the region, has already gained approval of the Bahrain Ministry of Industry and Commerce. It will also be one of the largest food and beverage manufacturing plants owned by a multinational company in the GCC. The plant will bring significant advantages for Kraft, which has been distributing products in the Middle East for about 50 years. “We are working across seven categories including cheese, beverages, coffee, and dessert,” Satamian said. “Usually when you operate in this part of the world it is better if your production is closer. At the moment, we are sourcing from many factories throughout the world, mainly Australia and the USA, and from a logistical and supply-chain point of view it is not ideal,” he added. By bringing the production closer to the markets, Kraft will be able to respond faster to consumer demand, and will benefit from the Middle East’s growing food and beverage market, according to Satamian. “The market is also growing and the economies are doing well, so it will get us closer to leverage these trends. At the same time we will be able to manage a shorter supply chain, so we can have more flexibility to respond to the consumer and also to the retailers,” he said. “We will be able to be more innovative and closer to trends, and this could lead to increased volumes and shares.” Kraft chose Bahrain as the site for its factory owing to its central location, which gives it easy access to all of the GCC countries, and because of favourable business regulations in the country. “We looked at various options in the Middle East and a lot of work and studies were done,” Satamian said. “We found Bahrain has favourable rules and regulations which encourage foreign investments and industrial projects. It’s also centrally located, close to Saudi Arabia which is our largest market in the region. It offers first class infrastructure with access to the wider region through airports and seaports. We also found that there is a good availability of skilled labour.” Satamian added that Kraft also has a good level of co-operation with Bahrain’s ministry of industry and commerce." Kraft already enjoys a strong presence in the Middle East, with its market share varying from about 40% to 80% across the different categories it operates in. These products are mainly processed canned cheese, cream cheese in a jar, and a powdered beverage called Tang, which is competing in the juice category. By bringing a production capability to the region Kraft will also benefit the wider food and drink industry in the region, according to Satamian. “It will be good for the local economies because obviously local production will benefit other Gulf countries, because a lot of the material will have to be sourced from these markets,” he said.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code