BRUNEI DARUSSALAM’S COMMITMENT TO ATTRACTING FOREIGN DIRECT INVESTMENTS
The Government of His Majesty The Sultan of Brunei, through its Wawasan 2035, has set out the directions for its economic goals with a growing emphasis on attracting foreign direct investments (FDI) as an important driver of growth, focusing mainly on economic activities that bring new knowledge, new industries, new technologies, new markets as well as new business and employment opportunities for its people.
The Economic Strategy that has been established calls for, among others, the following policy directions:
- Ensuring continued macroeconomic stability;
- Ensuring high rates of economic growth;
- Promoting national economic competitiveness through policies that encourage productivity, economic openness and competition;
- Investing in downstream oil & gas industries and other economic clusters selected on the basis of Brunei Darussalam’s competitive strengths, export potential and employment opportunities for local people;
- Investing in the world class infrastructure that is required to attract foreign and domestic investment in new export industries.
FOREIGN DIRECT INVESTMENT INITIATIVES UNDERTAKEN BY THE BEDB
The BEDB has identified several key industry clusters within the export-oriented manufacturing and services sectors that have the potential to bring value added activities to Brunei and create spin-off opportunities. Furthermore, the readily available industry cluster-specific sites throughout the country make Brunei as an ideal location for the establishment of the following industry clusters:
MANUFACTURING SECTOR
Within the manufacturing sector, Brunei has the potential to develop new industries both within and beyond the oil and gas industry not only through the utilization of its rich biodiversity and natural resources but also its strategic location in the region. They include activities that can tap on Brunei’s hinterland as well as those that will add value to Brunei’s resources.
Tapping on Brunei’s Hinterland
Strategically located in the BIMP-EAGA region where key raw materials such as sugar and cocoa can be drawn in from neighbouring countries, Brunei sees itself as an ideal destination for the establishment of industries such as food & food ingredients and pharmaceuticals.
Food & Food Ingredients
The BEDB is particularly interested in the food industry and would like to attract major food and food ingredients companies into the country for exports. There are numerous opportunities that can take place in Brunei, from sourcing and refining raw materials to food manufacturing and eventual distribution to key sizeable markets within the region. Brunei also has the potential to establish research and development centres for the development of innovative nutritional products through the utilization of authentic local food ingredients that can lead to the manufacturing and processing of customised food products for global markets.
In addition to its well-established guidelines and standards for the handling and manufacturing of halal food products, Brunei has also launched its very own Brunei Halal Brand with the objective to make Brunei as one of the major players of the global trade in Halal food production and certification. With its strong Islamic background, the global market can be assured that Brunei’s Halal Certification is both stringent and credible for businesses to penetrate into the Muslim markets.
Pharmaceuticals
Another cluster focus is the pharmaceutical and pharmaceutical ingredients industry in which the BEDB welcomes companies to establish a presence in Brunei.
 
Companies may also opt to produce halal pharmaceuticals as a value-add to their products. Brunei has recently developed its very own guidelines and standards for the handling and manufacturing of halal pharmaceutical products with the objective to pave the way for the establishment and production of halal pharmaceuticals in the country while seeking to become a global leader in halal industry.
Brunei’s strategic intent is to develop Brunei into a strategic location in the region for research and development with opportunities to generate new active compounds and manufacture new innovative and competitive pharmaceuticals. Brunei welcomes investments from internationally well-established companies to utilise Brunei as a strategic location for companies’ plans for expansion. We look forward to building a rapport and long-term partnership with such companies.
In 2010, Brunei witnessed the groundbreaking of its first halal pharmaceutical manufacturing plant at the Lambak Kanan East Industrial Site. Vivapharm (Brunei) Sdn Bhd is a joint venture between Canadian firm Viva Pharmaceutical Inc, private equity fund Aureos (Brunei) Capital Sdn Bhd, and a group of local investors. Vivapharm is a B$26 million project and is Brunei’s first halal and GMP (Good manufacturing Practice) ceritified manufacturer of pharmaceutical and nutraceutical products and will be targeting the growing halal market. Vivapharm will be focused on exporting halal-certified natural health products, over-the-counter and prescription drugs to the Asia Pacific regional markets, Middle East, Western Europe and the United States.
Adding Value to Brunei’s Resources
The vast wealth of natural resources available in this country has placed Brunei as one of the countries with distinctive features. Rich in oil and gas with abundant deposits of good quality silica sand, Brunei offers investors the opportunity to invest in industries such as petrochemicals, integrated petrochemical refinery and renewable energy.
Petrochemicals
Known for its strong oil and gas industry which dates back to the late 1920s, Brunei forms a perfect location for the establishment of downstream petrochemicals. Presently, Brunei is home to a US$600 million methanol plant developed by a Japan-Brunei consortium, Mitsubishi Gas Chemical Co Inc, Itochu Corporation and Brunei Petroleum. Located at SPARK right next to Brunei’s well established oil and gas industry, the methanol plant started its first commercial operation in May 2010 with a capacity to produce 850,000 metric tonnes of methanol per year. A methanol export facility, known as Single Point Mooring, was also established by the BEDB to facilitate the export of methanol via tankers through a loading buoy connected to the subsea pipeline system.
 
The establishment of Brunei’s first methanol plant is expected to pave the way for more opportunities in the downstream oil and gas industry in Brunei including methanol-related derivatives, besides other potential gas-based petrochemical projects such as ammonia and urea.
Integrated Petrochemical Refinery
In further extending the oil and gas value chain, Brunei also seeks to offer investors the opportunity to develop integrated petrochemical refineries. Brunei’s strategic location at the east-west trade route means that its connectivity to the neighbouring markets makes it a perfect location for the setting up of such facilities in order to meet the growing demand for oil-related products.
In July 2011, the BEDB received consent from His Majesty The Sultan of Brunei to proceed with the establishment of a US$2.5 billion oil refinery and aromatics cracker. The project will be located at Pulau Muara Besar (PMB) and developed in two phases by a leading private Chinese company, Zhejiang Hengyi Group Co Ltd. With a production capacity of approximately 135,000 barrels per day, the first phase of the refinery and aromatics cracker project will comprise the production of refined petroleum products such as gasoline, diesel and jet A-fuel, as well as paraxylene and benzene, which are mainly used in textile production. The project is set to create about 800 jobs and is expected to catalyse the development of PMB as an economic hub for industrial activities. Following successful completion of Phase 1, the company plans a further investment of US$3.5 billion for the expansion into the production of olefins.
Renewable Energy
With a long history of oil and gas production, Brunei is now looking to open up new frontiers and develop capabilities in renewable energy. Abundant deposits of silica sand available in this country have been seen as conducive to the development of a hub for solar glass manufacturing as well as solar cells and modules production.
SERVICES SECTOR
Within the services sector, Brunei seeks to further expand and develop its capabilities by capitalizing on its connectivity to the growing economies as well as by building on its highly-skilled workforce and readily available infrastructure in a move towards making the country globally competitive. This includes encouraging the establishment of ICT-related activities in order to make Brunei as a regional hub for ICT as well as activities that will help grow Brunei’s supporting industries.
Regional Hub for ICT
In an effort to make Brunei as a regional hub for ICT, the Government of His Majesty The Sultan has identified ICT as one of the key catalysts for sustainable socio-economic development and thus the development of ICT industry continues to be a top priority. Stable, secure, free of natural disasters, and strategically located within Asia-Pacific and the BIMP-EAGA region, Brunei is central to access neighbouring markets which makes it an ideal destination for activities such as data centre/disaster recovery centre as well as software development, wireless communication and multimedia. Furthermore, Brunei’s utility rates are amongst the lowest in the region.
Data Centre/Disaster Recovery Centre
Brunei is increasingly competitive when it comes to the data centre industry as we offer one of the most competitive priced utilities in the region. In addition, Brunei has an abundant bandwidth capacity through its web of international submarine cables and state-of-the art telecommunications infrastructure which enables efficient connectivity with the rest of the world. At least 80% of Brunei’s SEA-ME-WE3 bandwidth capacity is still open for further utilization, and to further enhance the international connectivity, Brunei has also invested significantly in the Asia America Gateway (AAG) Submarine Cable System which lists Brunei as one of its landing stations, providing a seamless direct link between Brunei and the United States as well as other Asian countries via one single cable. Brunei has also announced its plans to implement a third cable, the South-East Asia Japan Cable (SJC), to increase room for connection redundancy.
Growing Brunei’s Supporting Industries
In growing Brunei’s supporting industries, and in maximizing the potential of Brunei as a competitive regional hub, the BEDB has identified several logistics activities that can be further exploited through the utilization of Brunei’s readily available infrastructure. They include aviation support services, air & sea logistics, marine support services as well as oil field support services.
Aviation Support Services
The burgeoning low-cost carriers coupled with aircraft re-fleeting and acquisitions by legacy carriers in the region, and where airlines continue to outsource their maintenance activities outside of their organization, marks a foreseeable demand for aviation-related activities. With readily available infrastructure in the form of modern and well equipped industrial hangar space at the Brunei International Airport, and with the availability of qualified workforce and technical expertise, Brunei is ideally positioned for aviation support services such as aircraft maintenance, repair and overhaul (MRO), as well as flight crew simulation and training.
Oil Field Support Services
Oil and gas exploration activities are expected to commence in late 2011 with the successful award of Brunei’s deepwater offshore petroleum blocks CA1 and CA2. In order to support these exploration efforts, a wide range of services will be required by the operators, opening up the opportunity for Brunei to develop a centralized Marine Supply Base and Fabrication Yard to house upcoming oil & gas support services industries. There is potential to develop national scale projects at Pulau Muara Besar (PMB) whose naturally deep draft and tranquil harbour are ideal assets for a supply base.
EMERGING NEW TECHNOLOGIES
In a move to position Brunei as a new technology player in the next 20-30 years, the BEDB is currently looking into the feasibility of bringing new frontiers of science and technologies into Brunei to create economic activities that are driven by accelerated technology developments that have increasingly significant economic values. Subject to further research and dialogue with experts, the potential new technologies may be found within the identified sectors of health care/health sciences, food security, advanced manufacturing processes, material sciences, electronics, as well as further research into the areas of energy, sustainable environment and ICT.
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