Foreign Direct Investment (FDI) is one of the main strategies for the economic diversification process of Brunei. Favourable tax incentives and customs duties exemption for certain sectors, especially in non-oil investments, competitively priced utilities as well as strong financial supports and robust comprehensive Intellectual Property Protection are key elements to attract FDI into Brunei.
In order to further improve its appeal as an FDI destination, the country has initiated a series of reforms.
The establishment of a FDI and Downstream Industry Committee was announced in 2016. This committee is tasked with implementing reforms to increase competitiveness in attracting foreign investors to the sultanate.
The Brunei Economic Development Board (BEDB) plays an important role in FDI. They work closely with the FDI working committee, FDI Action and Support Centre (FAST), an agency that helps to coordinate with other stakeholders, whilst Darussalam Enterprise (DARe) provides operational support.
In 2015, BEDB attracted 11 FDI projects estimated at about B$6.9 billion in manufacturing, agriculture, logistics, pharmacy and aquaculture.
The FDI projects currently under implementation include Dongyang Gangchul Co Ltd (Korea) in
manufacturing with an investment of B$133,500,000; HLDS (B) Steel Sdn Bhd (China) also in manufacturing – B$62,500,000; Golden Corporation (Taiwan) in aquaculture – B$55,000,000; Amann Shipping Sdn Bhd (Hong Kong) in logistics – B$32,500,000; MC Biotech Sdn Bhd (Japan) in pharmacy – B$19,000,000; Hengyi Industries Sdn Bhd (China) in oil and gas downstream – B$5,000,000,000; and Brunei Fertilizer Industries Sdn Bhd (Turkey) in downstream – B$1,625,000,000.
Some of the successful FDI companies include Simpor Pharma Sdn Bhd, CAE Brunei MPTC Sdn Bhd and Brunei Methanol Company Sdn Bhd.
Simpor Pharma Sdn Bhd, which is Brunei’s first GMP standard pharmaceutical manufacturer, aims to become the hub for exporting Halal pharmaceutical products and health supplements to the global market.
The company is a $26 million joint-venture among Canadian Firm Viva Pharmaceutical Inc, private equity fund Aureous (Brunei) Capital Sdn Bhd and a group of local investors.
Being the nation’s first Halal Pharmaceutical Plant, its objective is to ensure that products meet the stringent Halal requirements. Simpor Pharma takes into account the process of manufacturing Halal products from start to finish, complying with Islamic Law — from raw material selection, to purchasing,
manufacturing, handling of finished products and more.
Simpor Pharma has quite a long range of products from nurtraceuticals to skincare-based cosmecueticals.
Other than tablets and capsules, Simpor Pharma also produces chewable softgels and easy-to- prepare functional drinks.
BMC, a joint venture between PetroleumBRUNEI, Mitsubishi Gas Chemical Company (MGC) and ITOCHU Corporation, has a production plant with a capacity of 2,500 metric tonnes per day of Federal grade AA Methanol. It is another major FDI in the country that utilises Brunei’s rich hydrocarbon resources, located at 271 hectares in Sungai Liang Industrial Park (SPARK).
BMC is a major job creator in the country with 250 staff members, of which 90 per cent are locals. The company recorded Brunei’s first downstream export, where it shipped 10,000 metric tonnes of methanol to China in 2010. To-date more than 613,000 tonnes have been exported.
Methanol is one of the basic chemicals that have a variety of derivatives, and is mainly used as a raw material for formaldehyde, acetic acid and so on.
Besides methanol, another type of chemical production that Brunei could capitalise on from its strong petroleum industry is ammonia/urea. If Brunei has methanol and ammonia/urea production, things can be further diversified, where methanol and ammonia can support other types of downstream derivatives. It will produce further jobs, broaden economic base of the country and create spin off industries.
However, ammonia is very difficult to export via buoys like methanol, thus a fixed export jetty is needed to accommodate ammonia production.
Another major project that has been successful is the CAE Brunei Multi-Purpose Training Centre (MPTC) established in 2012 as a joint venture between CAE and the Government of Brunei.
The development of the integrated training facility for the CAE Brunei MPTC was completed and the facility officially started in September 2014. The CAE Brunei MPTC is a world-class training facility that is staffed and operated by Bruneians. Located in Rimba, the company plays a key role in further developing the defence, aviation and emergency/ crisis management market segments in Brunei.
Hengyi Industries Sdn Bhd in oil and gas downstream is perhaps the largest FDI project to date that will transform the Pulau Muara Besar (PMB) from an island off the shores of Brunei into a mega industrial facility.
Hengyi’s project at PMB was initiated by the BEDB and has a site area of 260 hectares. Once completed, the multi-billion dollar refinery and petrochemical project is expected to produce eight million tonnes of by-products per year including aromatics, gasoline and diesel, providing enough fuel to meet local demand.
The project is progressing on schedule, with site construction set to be completed by the end of 2018.
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