FTA hope for garment units
By tariq khonji
Gulf Daily News, Bahrain
BAHRAIN’s garment industry could be bouncing back despite the closure of 23 of its 28 factories in the last two-and-a-half years.
Two of those – Gulf Baraka Garments and sister company French Garments – closed down in the past few weeks, but a business leader says that does not signal a widespread crisis for the industry.
In fact, good times are ahead for the remaining players in the industry as the benefits of Bahrain’s Free Trade Agreement (FTA) with the US begin to materialise, said Bahrain Chamber of Commerce and Industry (BCCI) garment and textiles committee vice-chairman Harinder Lamba.
“The two factories which closed down were both owned by the same company and the reasons were unique to them, not the wider industry,” he said.
“In fact, those are the only companies that have closed in over two years.
“Before that, we did have 21 factories close, but that was before the FTA was implemented.”
Mr Lamba said business was very bad at that time and even though the companies knew the FTA was coming, they had no idea when exactly it would be implemented.
“What had hurt the textiles industry back then was that the World Trade Organisation imposed new rules for a quota-free world,” he explained.
“As a result, Bahrain companies had to struggle for orders and compete with Far Eastern nations.
“We knew that the FTA was coming, but nothing happened in 2005 and we only got it in late 2014.
“By then it was too late for most of the companies.”
Now that the FTA is in effect, Mr Lamba predicts a shift towards synthetic material – such as polyester and nylon-blends – because it would give Bahrain a competitive advantage against other countries.
“This is because other countries, such as China, have to pay higher import duties on these products,” he said.
However, he added that investors were not yet putting money into the shift because they are waiting to see what other changes may take place, including planned reform of the labour market.
“Synthetic material would require more automation, but before the companies invest in equipment and machinery they are waiting to see what is going to happen,” Mr Lamba said.
He revealed that Bahrain’s labour, even at today’s prices, could be considered expensive when compared to some other countries – such as Egypt.
However, the country does offer other advantages.
“Bahrain offers a logistics advantage,” he said.
“Clearing and forwarding times are pretty fast.
“Secondly, there is the benefit of expatriate labour, which is usually more reliable than local labour.
“Being away from their families there is less absenteeism because of marriages, deaths, festivals and so on.
“Thirdly, the infrastructure – including telecommunications and transportation – is very good.”
