An investment of $40 million is being made for the development of Bahrain’s first-ever copper tube factory, it has emerged.
To be located at the Bahrain International Investment Park (BIIP), the project involves Bahrain’s investment arm, Mumtalakat, US-based Mueller Industries and Cayan Ventures, a GCC-based industrial projects developer and investor, as joint venture partners.
Mumtalakat said yesterday the parties will invest approximately $40m in the facility, which will address the increasing demand for quality copper tubes in the Middle East and North Africa (Mena) region.
In a separate statement, Mueller Industries said it will invest approximately $5.5m and be the technical and marketing lead in return for 40 per cent ownership of the joint venture. Mumtalakat said it will be responsible for providing on-ground support, including procuring regulatory approvals for establishing the business and Cayan will structure and mobilise the project.
They will each hold a 30pc stake in the business, which will operate and brand its products under the Mueller Industries family of brands. The mill will produce commercial copper tubes to serve regional air conditioning and refrigeration (ACR) original equipment manufacturers (OEMs). Project timelines, including the date of commissioning were not disclosed. Mumtalakat’s chief executive Mahmood Al Kooheji said the investment underscored the sovereign wealth fund’s continued commitment to partnering with leading international players for facilitating their expansion into the kingdom.
“Significant demand for high quality copper tubes in the region, almost entirely supplied by East Asia, made a compelling case for establishing this facility, which will supply an ever-growing OEM production capacity and the fastest growing ACR market globally,” he added. Mr Al Kooheji said the facility would create more than 200 jobs in Bahrain and make a positive contribution to the local economy. Mueller Industries chief executive Greg Christopher said the Mena region was one of the fastest-growing markets for air conditioning and refrigeration. “We are pleased to secure this arrangement with established financial partners, ensuring us the expertise and relationships necessary to progress in this new venture,” Mr Christopher added.
Cayan’s managing partner Thomas F Stein called it a significant project for Bahrain, “given the complement it brings to Bahrain’s industrial base and value it brings to the economy”. “This is the first copper tubing facility in the region and we expect to capitalise on the strength of the shareholders and the project’s geographic positioning to ensure success,” he said. Research by Technavio forecasts the seamless copper tubes market to grow at a compound annual growth rate of 9pc during 2015-2019.
The market growth is driven by construction and real estate growth in countries like Saudi Arabia and the UAE, thereby fuelling increased consumption of seamless copper tubes in air conditioning and refrigeration. The Saudi air conditioning market is one of the biggest in the region with an estimated market size of more than $1.4 billion, says Technavio.
Copyright 2019 Al Hilal Publishing and Marketing Group