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MIRA INFORM REPORT
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Report No. : |
503952 |
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Report Date : |
18.04.2018 |
IDENTIFICATION DETAILS
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Name : |
SIKA GULF BSCC |
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Registered Office : |
Building No. 925, Road No. 115, Block 601, PO Box-15776,
Manama |
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Country : |
Bahrain |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
18.01.1995 |
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Com. Reg. No.: |
33352-1, Sitra |
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Legal Form : |
Bahraini Shareholding Company Closed – BSCC |
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Line of Business : |
Engaged in the production of chemicals for the construction industry, including concrete admixtures, specialty mortars, epoxies, structural strengthening systems, industrial flooring, sealants, adhesives andre-enforcing materials |
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No. of Employees : |
75 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with moderate
risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Bahrain |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
BAHRAIN - ECONOMIC OVERVIEW
Low oil prices have generated a budget deficit of at least a $4 billion deficit in 2016, nearly 14% of GDP. Bahrain has few options for covering this deficit, with meager foreign assets and fewer oil resources compared to its GCC neighbors. In 2016 the three major US credit agencies downgraded Bahrain’s sovereign debt rating to “junk” status, citing persistently low oil prices and the government’s inability to more effectively cut spending. Nevertheless, Bahrain in 2017 was able to raise about $3 billion by issuing international debt.
Oil comprises 86% of Bahraini budget revenues, despite past efforts to diversify its economy and to build communication and transport facilities for multinational firms with business in the Gulf. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state.
Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries.
In 2011, Bahrain experienced economic setbacks as a result of domestic unrest driven by the majority Shia population; however, the economy recovered in 2012-15, partly as a result of improved tourism. In addition to addressing its current fiscal woes, Bahraini authorities face the long-term challenge of boosting Bahrain’s regional competitiveness — especially regarding industry, finance, and tourism — and reconciling revenue constraints with popular pressure to maintain generous state subsidies and a large public sector. Since 2015, the government lifted subsidies on meat, diesel, kerosene, and gasoline and announced new higher prices for electricity and water, although it plans to roll these increases out more gradually than previous subsidy cuts
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Source
: CIA |
SUMMARY
Company Name :
SIKA GULF BSCC
Country of Origin :
Bahrain
Legal Form :
Bahraini Shareholding Company Closed – BSCC
Registration Date :
18th January 1995
Commercial Registration Number : 33352-1, Sitra
Issued Capital :
BD 1,000,000
Paid up Capital :
BD 1,000,000
Total Workforce :
75
Activities :
Producers of chemicals for the construction industry
Financial Condition :
Fair
Payments :
No Complaints
Operating Trend :
Steady
COMPANY
NAME
SIKA GULF BSCC
ADDRESS
Registered & Physical Address
Location :
Building No. 925, Road No. 115, Block 601
Area :
Sitra Industrial Area, Adliya
PO Box :
15776
Town :
Manama
Country : Bahrain
Telephone :
(973-17) 738188 / 735560
Facsimile :
(973-17) 732476
Mobile :
(973-34) 057457
Email : sika@batelco.com.bh
/ sika.gulf@bh.sika.com
Premises
Subject operates from a medium sized suite of offices, a
factory and a warehouse that are owned and located in the Industrial Area of
Adliya.
KEY
PRINCIPALS
Name Nationality Position
Abdulaziz Zeidan Egyptian Managing Director
Dr Hassan Al Mulla Saudi Director
Charles Thomas Kidd Canadian Director
Karl Kurz Swiss Director
Adrian Josef Widmer Swiss Director
Stefan Mosli Swiss Director
Gaby El Chaer - General Manager
Jawad Maaitah - Commercial
Manager
Mohamed Abdul Majeed - Purchasing
Manager
Santosh Shatti - Financial
Controller
LEGAL
FORM & OWNERS
Date of Establishment : 18th
January 1995
Legal Form : Bahraini
Shareholding Company Closed – BSCC
Commercial Reg.
No. : 33352-1, Sitra
Chamber Mem. No. : 6219
Issued Capital : BD
1,000,000
Paid up Capital :
BD 1,000,000
Name of Shareholder (s) Percentage
Sika Arabia Holding Company WLL 99.99%
Manama
Bahrain
Sika AG 0.01%
Geernweg 9
Zurich 8048
Switzerland
Tel: (41-1) 4364040
Notes to the legal Form A
BSC (Closed), commonly known as a closed joint stock company, consists of a
minimum of two shareholders who subscribe to it by way of negotiable shares
that are not offered to the public for subscription. Shareholders are liable
for the company's debts and obligations only to the extent of the value of
their shares. The minimum share capital required is BD 250,000. There must be a
minimum of three directors. A closed joint stock company can be 100% foreign
owned. There is no requirement of local sponsorship. However, depending on the
business activity, there may be a requirement of minimum Bahraini ownership.
AFFILIATED
COMPANIES
Sumam Trading Est
Al Oruba Plaza, 2nd Floor
PO Box: 58647
Riyadh
Saudi Arabia
Tel: (966-11) 4196991
Fax: (966-11) 4193607
Geap Traders LLC
PO Box: 36334
Dubai
United Arab Emirates
Tel: (971-4) 2868656
Fax: (971-4) 2868657
Sika UAE LLC
Dubai
United Arab Emirates
Tel: (971-4) 4398200
Sika Saudi Arabia
Jeddah
Saudi Arabia
OPERATIONS
Activities: Engaged in the production of chemicals
for the construction industry, including concrete
admixtures,
specialty mortars, epoxies, structural
strengthening systems, industrial flooring, sealants, adhesives and
re-enforcing materials.
Import Countries: Switzerland, Germany and Italy.
Brand Names: SIKA
Operating Trend: Steady
Subject has a workforce of 75 employees.
FINANCIAL
DATA
Financial highlights provided by local sources are given
below:
Currency: Bahraini Dinar (BD)
Year Sales
Year Ending 31/12/14: BD
10,090,177
Year Ending 31/12/15: BD
11,451,330
Year Ending 31/12/16: BD
12,000,000
Year Ending 31/12/17: BD
12,850,000
Local sources consider subject’s financial condition to be
Fair.
Note: According to
Bahraini Commercial Law, only Bahraini Shareholding Companies BSC (Listed on
the Bahraini Stock Market) are required to publish their financial information.
Financial information on other legal forms can only be obtained from the
companies / businesses directly
BANKERS
National Bank of Bahrain BSC
NBB Tower
Government Road
PO Box: 106
Manama
Tel: (973-17) 258800
Fax: (973-17) 263876
Arab Bank Plc
Government Avenue
PO Box: 395
Manama
Tel: (973-17) 229988
Fax: (973-17) 210443
PAYMENT
HISTORY
No complaints regarding subject’s payments have been
reported.
Date of transaction August
2006 January
2014 September
2015
Credit amount 51,000 100,000 525,000
Amount overdue 0 0 0
Payment terms 180
days 180
days 180
days
Payment Method Letters
of Credit Letters
of Credit Letters
of Credit
Paying record No
Complaints No
Complaints No
Complaints
Currency Pounds
Sterling Euros Euros
SANCTION
LIST CHECKS
The subject and its shareholders have been checked in the
following sanctions list databases:
Sanctions
list Results
United Nations Sanctions No
matches
Australian Sanctions No
matches
Bureau of Industry and Security
(US) No
matches
EU Financial Sanctions No
matches
Office of the Superintendent of
Financial Institutions (Canada) No
matches
OFAC - Specially Designated
Nationals (SDN) No
matches
UK Financial Sanctions (HMT) No
matches
US Consolidated Sanctions No matches
GENERAL
COMMENTS
During the course of this investigation the following
sources were consulted:
- Internal database
- Journals,
directories, media & web searches
- Local Registry
office
Established in 1995, subject is involved in the production
of chemicals for the construction industry, such as sealants, adhesives,
epoxies and mortar.
During the course of this investigation nothing detrimental
was uncovered regarding subject’s operating history or the manner in which
payments are fulfilled. As such the company is considered to be a fair trade
risk.
COUNTRY
OUTLOOK
Recent Developments
Cheap oil continues to test
Bahrain’s economic resilience. Bahrain maintained an expansionary fiscal stance
since 2009 resulting in general government deficits. The situation worsened in
2015 with a decline in oil revenues by about 10 percent of GDP and a general
fiscal deficit estimated at 12.8 percent of GDP (from 3.4 percent in 2014). The
deficit spending helped maintain economic growth at 2.9 percent, but brought
reserves down to a low level at 2.6 months of imports and increased public debt
to 62 percent of GDP. Bahrain has introduced some initiatives for fiscal
consolidation. Revenue enhancing measures such as higher tobacco and alcohol
taxes and government services
fees were introduced over the
past year. A cost-cutting program entailed the raising of petrol prices by up
to 60 percent in January 2016(likely to create savings worth US$148.4 million),
the gradual phasing-in of price increases for electricity, water, diesel, and
kerosene by 2019, an increase and unification of natural gas prices for
industrial users, and the removal of meat subsidies. Inflation has gradually
picked up in 2016 mainly as a result of the subsidy reform: the headline CPI
rose by 3 percent, but it will remain subdued in 2017 as one-off measures
affect the current year
only. 2016 outcomes demonstrate,
however, that the authorities’ emphasis on growth comes at the expense of
fiscal deterioration.
The Bahraini economy grew by an
estimated 3.4 percent in 2016. While the hydrocarbon sector grew by an
estimated 2 percent, the non-hydrocarbon sectors grew by an average estimated
rate of 3.7 percent, a figure that reflects the continued emphasis on public
investments, some of which were funded by the GCC. The downside of this
approach, however, has been manifested in persistently high fiscal deficits,
estimated at 12.6 percent of GDP in 2016. A large portion of the 2016 deficit
was covered by debt issuances, despite the sovereign downgrade reflecting
increasing pressures on government finances. Bahrain issued a US$600 million
bond just before the downgrade and the authorities raised the public debt
ceiling to BD 10 billion (around 80 percent of GDP) to enable additional
borrowing. Bahrain’s external position faces growing vulnerabilities. The
current account surplus of the past 12 years turned into a deficit in 2015,
following the drop in oil prices and further deteriorated in 2016 to 4.6 percent
of GDP. Reserve adjustments reflect the growing external imbalances. The
exchange rate peg has come under significant pressure: external imbalances were
reflected in a decline in reserves to 2.6 months of imports in the same time
frame. The real effective
exchange rate has also appreciated by 17 percent since mid-2014, complicating
adjustments to the adverse terms of trade shock that Bahrain is facing.
Little comprehensive welfare
analysis is available due to restricted access to household survey data,
limited capacity, and the sensitivities involved. Among Bahraini nationals’,
labour force participation is low, and people work predominantly in the public
sector, where wages are high and productivity low. Immigrant workers constitute
about a half of the resident population and command much lower incomes. Key
elements of the social contract - public employment and subsidies - are
becoming less affordable in the context of subdued oil prices. Bahrain aims to
gain from upgrading its capacity for welfare measurement that would support the
design of policies aimed at mitigating the impact of the necessary adjustment.
Results from a new household survey in 2015 have not yet been published.
Outlook
Economic growth is expected to
decline in the forecast period. Real GDP growth projections have been revised
downwards to 1.9 percent in 2017 and 2018, as continuing low oil prices depress
private and government consumption. Some infrastructure investments are also
likely to be put on hold. In the absence of significant upfront
fiscal adjustments, Bahrain will
remain vulnerable to fiscal risks. Average inflation is expected to decrease to
2.1 percent in 2017 reflecting the cooling off in economic activity and phasing
out of temporary price-boosting effects of subsidy reforms. The current account
deficit will partially narrow to 3.8 percent of GDP in 2017 and remain about
there for the years to come, with the exception of small adjustments.
International reserves are expected to follow a declining trend, and reach 1.5
months of imports in 2018. Public debt is projected to exceed 90 percent of GDP
in 2017, and reach about 100 percent in 2018.
Risks and Challenges
Ensuring fiscal sustainability
while preserving a healthy growth rate has become an important challenge in Bahrain.
Real GDP growth is expected to slow and fiscal and external balances are
expected to remain under pressure in 2017 due to oil prices remaining well
below fiscal break-even levels. Despite efforts to diversify and boost non-oil
fiscal revenues, hydrocarbons account for about 80 percent of government
revenues in Bahrain. In addition, subsidies still absorb more than 20 percent
of the fiscal budget. The fiscal break-even price for Bahrain was estimated at
US$110 per barrel in 2016, the highest amongst the GCC. Thus, Bahrain is
expected to continue to run significant general fiscal deficits in the forecast
period - 9.8 percent of GDP in 2017. Delays in implementing fiscal
consolidation or a
further decline in oil prices
could trigger additional sovereign rating downgrades making access to external
financing harder, and intensifying pressure on reserves and the peg. Fiscal
solvency and liquidity risks are high, and outcomes remain vulnerable to shocks
to growth, commodity prices, and interest rates.
Key Economic Indicators 2014 2015 2016* 2017* 2018* 2019*
Real GDP Growth (%)
4.4 2.9 3.4
1.9 1.9 2.3
Inflation Rate (%)
2.7 1.8 3.0
2.1 2.0 2.0
Current Account Balance (% of GDP) 4.6 -2.4 -4.6 -3.8 -3.5
3.5
Fiscal Balance (% of GDP) -3.4 -12.8 -12.6 -9.8 -8.9 -7.6
* forecast
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.45 |
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1 |
INR 93.28 |
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Euro |
1 |
INR 80.74 |
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BHD |
1 |
INR 174.05 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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PRA |
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Report Prepared
by : |
KET |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.