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Bahrain subcontracting exchange offers benefits to SMEs

Manama, May 27, 2014

The Bahrain Subcontracting and Partnership Exchange (BSPX) has demonstrated substantial cost savings to large firms while delivering expansion opportunities to small and medium enterprises (SMEs), said a top minister.

Industry and Commerce Minister Dr Hassan Fakhro said there is strong evidence that subcontracting linkages with large companies help small firms to become more efficient, productive and competitive by gaining technical and managerial knowhow from large firms, reported the Gulf Daily News, our sister publication.

The minister was speaking during the opening of a workshop yesterday on "Subcontracting & Industrial Partnerships for Small & Medium Enterprises," organised by the ministry at the Bahrain International Exhibition and Convention Centre.

"Findings have shown that during the pilot phase of the exchange, local SMEs successfully manufactured 32 varieties of imported industrial components, offering large firms who procured the products, savings of between 20 per cent and 90 per cent," he said.

The pilot project was carried out to examine the capability of local SMEs to develop certain products, hitherto being imported, as per the quality, delivery and cost expectations of the buyer.

It was also to identify technical, managerial, financial and any other resource gaps that hinder the potential of local SMEs to be reliable vendors to large firms in Bahrain and suggest remedial measures, the report added.

Following the pilot phase, BSPX was established in the offices of the ministry, in co-operation with the Gulf Organisation for Industrial Consulting.

The stated aim if the exchange is to match enquiries and offers for subcontracting work and outsourcing.

"The exchange also provides information on the industrial specialities, skill sets and capacities of Bahraini enterprises and matches these skill sets and capacities with the requirements of buyers," Dr Fakhro said.

It is an important resource for industrial enterprises in the region to strengthen and enlarge their supply chains.

As of date, 220 Bahraini SMEs are registered in the exchange.

"Lack of adequately qualified suppliers is a constraint to the competitiveness and profitability of large firms, who find it convenient and cost effective to source parts, components and services from local small and medium enterprises situated near their manufacturing operations," he said.

"Such linkages also allow benefits of collective efficiency to flow to large firms through access to quality inputs at lower cost from suppliers in close proximity," he added.

Jafcon Consultants chief executive Dr Akbar Jaffari told the GDN that BD14 million worth of potential business opportunities have been identified for the 32 SMEs in the pilot phase.-TradeArabia News Service




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