Foreign direct investment into Brunei is on the rise, the second finance minister said on Saturday, following the launch of a US$30 million margarine factory in Serasa.
The rolling out of the Western Foods and Packaging Sdn Bhd (WFP) manufacturing plant — a joint venture between Brunei and Turkey — is one of the government’s initiatives to diversify the economy away from oil and gas, said YB Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abdul Rahman Hj Ibrahim.
The margarine manufacturing plant is located on a 1.9 hectare plot of land within the Serasa Industrial Area and will be exporting halal-certified quality products soon.
Present to officiate the launch of the WFP plant this morning was His Royal Highness Prince Hj Al-Muhtadee Billah, the Crown Prince and Senior Minister at the Prime Minister’s Office.
YB Pehin Dato Hj Rahman said Brunei continues to seek foreign investors to form joint-ventures with local entities via the Strategic Development Capital Fund (SDC) or through Darussalam Assets.
“It [FDI interest in Brunei] is picking up now. Recently, the Brunei Fertilizer Industries [with investors from Turkey] and the United Arab Emirates-based Saahtain Group [have set up in Brunei],” he told The Scoop.
“We welcome all these investors from abroad, whether they want to set up here, where joint ventures are made with our locals, or with us [the government].”
The minister, who is also the chairman of the Foreign Direct Investment and Downstream Industry Steering Committee, said the committee has been gauging interest from potential investors in Korea, Japan, Turkey, China and the United Kingdom.
Minister of Development, YB Dato Seri Setia Hj Bahrin Abdullah, added that the opening of the WFP factory is a success story that Brunei hopes to build on.
“The way that we try to promote Brunei is using catalyst investment. We are trying to develop an eco-system and today’s launch of this facility proves that big [players] can be attracted to [invest in] Brunei. With this launch, there will be other things latching onto it.”
Dato Hj Bahrin, who is the chairman of the Strategic Development Capital Fund, said he hopes investors will be convinced that Brunei is a good destination for investment, and that potential players will take note that Brunei is “open for business”.
When looking into prospects of FDI in Brunei, the minister explained that due diligence is carried out to ensure there is a business case for both Brunei and the foreign party.
Dato Hj Bahrin said for any FDI, it takes some time for the public to see the actual facilities being built. “It does not happen overnight. And with the Western Foods and Packaging manufacturing plant launch today, the agreement was signed about two years ago and now it is a real factory and is in production.”
Dr Zeki Ziya Sozen, a board member of Western Foods and Packaging Sdn Bhd and director of Brunei Fertilizer Industries, said several Engineering, Procurement and Construction (EPC) contracts are being signed for Brunei Fertilizer Industries.
He shared the reason why they set up in Brunei was due to the accessibility of oil as a raw material for margarine production.
“It makes a lot of sense to produce the final product at the location. Brunei is a peaceful country with educated people who have made this plant [what it is]. We could be pioneers in developing the Bruneian economy, but it is also helpful for us to have a foot in the right place at the beginning.”
Dr Zeki described the manufacturing plant as state-of-the-art — able to produce premium quality margarine for export to many markets. At full capacity, the plant will be able to produce 200 tonnes of margarine per day.
“For example, there is no reason why the UK’s biscuit manufacturing arm under our companies cannot use margarine from this plant,” he said.
Currently, Marsa — a leading oil and fats manufacturing company from Turkey — is already exporting to numerous markets in Central Asia, the Middle East and Europe, he added.
With the new WFP factory, they will be able to produce the final product in Brunei and immediately export it to various markets instead of having to go through Turkey for processing.
Dr Zeki explained that raw materials are typically sent to Turkey for processing and manufactured into the final product before being exported.
“At the beginning, we will be [leveraging] on Marsa’s markets, but we will also be opening new markets here because surrounding countries [Southeast Asia] need products like oils and fats as well,” he said.
WFP currently employs 75 locals with the possibility of hiring up to 200 employees when the plant is able to produce at full capacity.
WFP’s products will be the first margarine and edible oil products to be exported out of Brunei.
WFP is also looking into downstream opportunities for its products which can be used as ingredients to make biscuits, chocolates, pastries and ice cream. The plant by-products can be used as chicken feed and to produce soap and detergent.