A strong focus on value-added manufacturing and processing projects

Vision 2020’s economic diversification mandate has seen Oman’s industrial segment expand rapidly in recent years. Offering a prime geographical position situated at the crossroads of world trade routes, an abundance of natural resources, and government incentives for foreign industrial investors, the sultanate’s industrial sector is one of the most business friendly in the GCC today.

The petrochemicals, aluminium, steel and mining segments are witnessing strong growth as a result of new and planned processing and manufacturing facilities, while ongoing development at industrial estates and the port cities of Salalah, Duqm and Sohar promise long-term opportunities for new players and construction companies. Although rising domestic power demands and falling world commodities prices have led to a dimmer short-term forecast, Oman’s industrial and mining segments are expected to continue on a long-term upwards trajectory, with a host of value-added processing projects now under development across the country.

Overview

Industrial development in Oman is overseen by the Ministry of Commerce and Industry (MCI), though the sector’s labour pool is overseen by the Ministry of Manpower. Non-oil economic diversification and industrial development has been shaped by a host of five-year, mid-term development plans, which began in 1976 and are currently in their eighth iteration, with the most recent plan running from 2011 to 2015.

The Rusayl Industrial Estate was established in 1983 to attract new projects through the provision of infrastructure and utilities, and by the 1990s the sultanate’s industrial development strategy had shifted from import substitution industrialisation, which had prohibited certain foreign imports, to non-oil diversification, with a clear focus on utilising local materials for production.

Vision 2020, introduced in 1996, mandated that oil revenues be reduced to comprise just 9% of GDP, focusing on economic diversification via growth in the manufacturing, industrial and tourism industries, among others. Manufacturing is the second-largest industry in Oman, after oil and gas activities, and accounted for just over 12% of the national economy in 2011, according to a report by the School for International Training Graduate Institute, titled “Made in Oman – Promoting manufacturing and export in the sultanate of Oman”.

All new industrial and manufacturing companies operating in Oman are required to register with the MCI, as well as the Oman Chamber of Commerce and Industry. Sole proprietorships are not available to non-GCC nationals, and while joint ventures are permitted, at least 51% of company assets must be held by Omani nationals. In special cases, 70% foreign ownership is permitted, but complete foreign ownership is only possible in limited cases, such as national economic development projects, while foreign direct investment (FDI) usually requires an Omani sponsor.

Oman’s four free zones, however, offer considerable incentives to foreign investors, including a dedicated one-stop shop for required permits, lease agreements and approvals, 100% foreign ownership, no minimum capital requirements, corporate tax holidays, zero Customs duties, lower Omanisation requirements and well-developed infrastructure, including roads and sea ports.

“Infrastructure in Oman, in particular the road network, allows manufacturers to leverage competitive shipping costs to better compete on a global scale,” Prem Maker, executive director of Areej Vegetable Oils and Derivatives Company, told OBG.

Growth

Rising industrial activity has had a strong impact on economic growth; the National Centre for Statistics and Information (NCSI) reported that non-oil exports expanded nearly five-fold between 2006 and 2012 from OR812.5m ($2.1bn) to OR3.6bn ($9.32bn), while the Central Bank of Oman (CBO) reported that non-oil exports grew by 18.9% in 2013, with the resultant share of non-oil exports in total exports rising to 33.9%, up from 31.1% in 2010. According to the CBO’s June 2014 quarterly update, the non-oil sector expanded by 7.6% in 2013 to reach a total value of OR17.23bn ($44.62bn), up from OR16bn ($41.43bn) in 2012.

Industrialisation has benefitted Oman’s regional trade in particular; the NCSI reported that non-oil exports to the UAE expanded by 24.4% to reach OR428m ($1.12bn) during the first eight months of 2013, making the UAE Oman’s largest non-oil trading partner. At the same time, non-oil exports to Saudi Arabia jumped by 93% between January and September 2013 to reach OR306m ($792.36m). The government expects that non-oil economic activity will expand by an additional 7.3% in 2014.

The ceramics industry is one such area where the increase in non-oil trade with Saudi Arabia can be seen. "The ceramics industry has posted double-digit growth in recent years due to Saudi Arabia’s costruction sector growth. The only way to compete is to expand, and bring down the per unit cost," Arvind Bindra, CEO of Al Maha Ceramics, told OBG.

Increased Investment

Industrial investment is also showing strong growth: outside of the oil and gas industry, manufacturing accounted for the lion’s share of FDI in Oman in 2012, with investments comprising some 46% of total FDI, according to a 2014 report published by the NCSI.

Non-oil activities reached a total value of OR8.27bn ($21.41bn) during the first half of 2013, according to a January 2014 CBO report. The government’s investment in the industrial sector is projected to reach OR200m ($517.88m) between 2014 and 2020, according to the Ministry of Finance.

ICV 

Despite this solid growth, especially in exports, stakeholders have argued that there needs to be a greater focus on improving industrial value addition to reduce dependency on global commodity markets. “For Omani-manufactured exports to be competitive abroad we must be efficient in cost and increase productivity. This means utilising every aspect of the value chain to its fullest potential,” S. Gopalan, CEO of Reem Batteries and Power Appliances Company, told OBG.

At the time of writing, global commodity markets were in the midst of a third “taper tantrum” in 18 months, so-named for the US Federal Reserve’s May 2013 move to taper its asset-purchasing programme, which had bolstered commodity prices as well as the economies of emerging market suppliers. This move contributed to a significant decline in world commodity prices, which dropped by 25% between 2011 and 2014, and 11% between June and October 2014 alone, according to the Economist.

Falling commodity prices will also impact the GCC, and the IMF announced in October 2014 that it had re-adjusted its growth forecast for the Middle East and North Africa (MENA) region to 2.6%, from the 3.2% he had previously forecast in April, with growth driven downwards by regional conflicts and falling oil prices, forecasting that metal, agricultural and oil commodities would continue to drop until 2019. Oman, too, has seen its commodity prices fall, with the NCSI reporting in June 2014 that the price of food, beverages and textiles dropped by 0.3% during the fourth quarter of 2013, while metal products, machinery and equipment prices dropped by 0.3% as well, on the back of a 1.6% contraction in the prices of ore, iron and aluminium.

Oman’s economy is not immune to such price fluctuations. “The world economy affects us quite a bit, and we have witnessed stagnation in the past precisely because of our dependency on European markets,” Gopalan told OBG.

Domestic development could offer a solution to global volatility, with the Oman National Railway Project and regional events including Dubai’s Expo 2020 expected to drive demand for materials in the medium term. Value addition will also benefit the sultanate; Oman’s in-country value (ICV) development programme is geared towards maximising revenue retention within the country, emphasising production over export of raw materials.

The ICV programme’s influence has been especially visible in the mining sector, where legislative amendments have mandated value addition and prohibited the export of raw minerals.

“The private sector has the potential to play a significant role in adding value downstream. This not only creates jobs and adds value to the industry, but also increases the profile for companies to procure locally,” Ron Marchbanks, the CEO of Oman Aluminium Rolling Company (OARC), told OBG.

In the manufacturing sector, ICV encourages the development of industry services and support, which will build up domestic capability. According to a June 2014 report in energy publication Arabian Oil and Gas, the government’s ICV focus extends beyond Omanisation to the tender evaluation process, and contractors demonstrating commitment to long-term national development, including value addition in the production of raw materials, will be more likely to win government contracts.

“The ICV initiative is imperative to build local capacities. Without this, local manufacturers will never be successful on the international market,” Hassan M J Ali Abduwani, CEO of Voltamp, told OBG.

The PEIE

The Public Establishment for Industrial Estates (PEIE) manages the majority of the Sultanate’s industrial production, at eight industrial estates: Rusayl, Sohar, Al Raysut, Sur, Nizwa, Buraimi, Mazunah, Samail and Al Buraimi.

In addition to these estates there are four free zones in Oman, located in Sohar, Salalah, Duqm and at Al Mazunah near the Yemeni border.

In January 2014 Hilal bin Hamad Al Hasani, PEIE’s CEO, announced strong growth across Oman’s industrial estates for the fifth year in a row.

According to data published by the PEIE, the total number of projects hosted within its estates now stands at 1360, with total investments valued at OR4.5bn ($11.65bn). Total employment reached 34,153, of which 13,793 are Omani nationals, following 7.1% employment growth in 2013.

In 2013 the PEIE attracted 109 new projects, representing 9% growth, with 35 projects becoming operational that year, while an additional 201 projects remain under construction. The PEIE leased a total of 1050 sq metres of land in 2013, with the total leased industrial area within its estates now standing at approximately 27,364 sq metres, compared to 26,314 sq metres in 2012.

Recent announcements indicate further rapid expansion of industrial activities in Oman. In September 2014 the minister of financial affairs, Darwish Ismaeel Al Balushi, announced that the industrial sector would be the primary focus of the government’s next five-year economic development plan, running from 2016 to 2020. The sector will receive help from a newly established investment consortium managed by Shumookh Investment and Services, which will provide more than OR500m ($1.29bn) in funding for new projects in the PEIE’s industrial estates when it launches in 2015.

New Estates & Epansions

The PEIE’s newest addition, the Samail Industrial Estate, was the first project to be developed in a single stage in Oman. Following the 2012 inauguration of a power plant providing utilities to future tenants, the Samail estate attracted OR125m ($323.68m) of investment in 2013, with 180 projects now planned for the 7. 4msq-metre estate, and 18 under construction.

In August 2014 PEIE officials announced they were in the final stages of selecting a winning bidder for an OR50m ($129.47m) infrastructure contract to enhance facilities and accessibility at Samail, which is located in the Al Dakhiliyah Governorate, 45 minutes from Muscat International Airport.

Indian firm Larsen and Toubro’s Omani subsidiary won the $102.1m contract in October 2014 to build a utilities and infrastructure network across the estate’s Area 1 and Area 2, which span a total of 548 ha and 205 ha, respectively.

In September 2014 the PEIE announced plans for further expansion of industrial estates, with new projects slated for development in the provinces of Thamrait, Haima, Barka, Mahda, Al Rowda and Al Suwaiq, as well as oilfield areas in Marmul and Fahud.

Outside of constructing new industrial zones, the PEIE is also working to expand existing estates at Rusayl, Nizwa, Al Mazunah and Sohar, with millions of dollars in foreign investment expected to flow in.

Located just outside Muscat, the Rusayl facility is Oman’s flagship industrial estate, covering a total of 7.9m sq metres, and housing 211 factories producing a wide spectrum of consumer and industrial goods. As with all PEIE-managed estates, Rusayl offers tenants factory and office space, utilities, telecoms networks, sewage treatment, housing, roads, mosques, banks and restaurants, as well as Customs offices and a police department, and the estate currently stands at 100% occupancy, with growing demand expected to lead to a sizeable expansion.

The PEIE is currently undertaking technical and consultancy studies for implementing a 3.5m-sqmetre expansion project at Rusayl, and floated a tender for the infrastructure development of a 400,000-sq-metre logistics expansion in late August 2014, with pre-qualified bidders expected to be announced by early 2015.

Some of the PEIE’s other planned projects include a 900,000-sq-metre expansion of the Nizwa Industrial Estate, and the establishment of a new free zone at the Al Mazunah Industrial Estate. In January 2014 the PEIE announced that 65% of the planned free zone had been completed, with a tender for the second phase of development expected to be floated in the near term.

The Sohar Industrial Estate is one of the largest under the PEIE’s umbrella, covering an area of 21.6m sq metres, of which 10.7m sq metres have been developed and subdivided into 226 plots. The project is divided into seven stages, with the seventh stage spanning 8m sq metres and set to include a new steel processing facility under development by UAE-based private firm Moon Iron and Steel Company. The PEIE floated a tender for development of the Sohar estate’s seventh stage, and in September 2014 it awarded a $51.4m contract for the expansion to Oman’s Hasan Juma Backer Trading and Contracting Company, which beat 15 other bidders to land a contract for the development of road, sewage, water and irrigation infrastructure, with work expected to wrap up within 18 months.

Port Cities

Apart from industrial estates, new logistics and port developments are bolstering Oman’s rapid industrial expansion, with free zones at Duqm, Sohar and Salalah expected to house new facilities that will substantially increase industrial output and manufacturing activities in the aluminium, mining, food processing and steel industries.

“Port infrastructure is very important for manufacturers who import their raw materials, so any changes that ease the transition of goods into the country greatly increase our ability to compete on a regional level,” Dilip Shanbhag, CEO of Sun Packaging Company, told OBG.

Duqm

The up-and-coming port city of Duqm, located on the coast of the Al Wusta Governorate in central Oman, is slated to become a major player in the oil and minerals industries, with a new refinery and petrochemicals complex planned. The surrounding terrain is rich in mineral deposits offering potential feedstock for rare earths and limestone processing.

The Port of Duqm Company’s (PDC) $2.6bn terminal launched soft operations in 2011 and is expected to become fully operational in 2015. While the port’s impressive $1.5bn dry-dock facility, the second largest in the MENA region, has garnered significant attention and investment, Duqm’s planned special economic zone (SEZ) is expected to offer some of the largest and most valuable industrial projects in the sultanate.

In August 2014 KEO International Consultants was awarded a design contract for the SEZ’s planned northern and central industrial zones, two parcels of land covering a total of 221.75 sq km. Actual development of the industrial zones will be undertaken by a planned new subsidiary of the PDC, in line with the company’s recently expanded mandate, which in March 2014 formalised its key role in industrial development and warehousing clusters within the SEZ. The PDC’s proposed subsidiary, the Duqm Industrial Land Company, is expected to be 51% owned by the PDC, with shareholders retaining the remaining 49% equity stake.

In addition to owning and managing the port, the PDC will also develop and manage 2000 ha of land earmarked for petrochemical, and medium and heavy industries, as part of its concession agreement with the Omani government. Of this, two 500-ha zones will be reserved exclusively for medium and heavy industry, while the remaining 1000 ha will host downstream petrochemical industries, including the planned Duqm Refinery and Petrochemicals Complex (see Energy chapter).

Sohar

Located just south of the Strait of Hormuz, Sohar is Oman’s most developed industrial region. The city houses the Sohar Industrial Port (SIP), managed by the Sohar Industrial Port Company (SIPC), which is a joint venture between the government of Oman, the Netherlands’ Port of Rotterdam and India’s SKIL Infrastructure. SIP recently assumed commercial shipping duties for Sultan Qaboos Port in Muscat, resulting in the rapid expansion of shipping activities and cargo volumes. Sohar is also home to the PEIE’s Sohar Industrial Estate, as well as the newly established Sohar Free Zone (SFZ), an industrial base managed by the SIPC.

Sohar is set to become Oman’s dominant industrial hub, with a host of new infrastructure and raw production projects completed in recent years, including Vale’s iron ore import and processing facility, which was inaugurated in 2012 and offers total capacity of 9m tonnes per annum (tpa) of direct reduction iron ore pellets.

The SFZ has already benefitted from $14m of infrastructure investments, including sewage and roads, while projects under development include value chain investments aimed at increasing industrialisation, and processing facilities that provide feedstock for companies operating further downstream.

For example, the free zone already houses five ferrochrome smelters, which provide critical feedstock for the steel-producing industry, with each smelter representing a multi-million dollar investment. Several large global players have established their own smelters, including India’s Indsil Group, Metkore Alloys and Industries, and Omani firm Gulf Mining Materials, with estimated 2m-tpa capacity expected in the mid term.

In the minerals and quarrying segment, dominant copper mining company Mawarid Mining is planning to move forward on an underground copper mine at its Ghuzayn site near Sohar, which could result in up to 10m tonnes of sulphide ore extraction over the next 12 years, offering new opportunities in copper processing facilities (see analysis).

In the petrochemicals segment a new metaxylene/purified isophthalic acid plant is under development by the Oman Oil Company (OOC), as well as the greenfield Liwa Plastics Project, developed together with the Oman Refineries and Petroleum Industries Company’s Sohar Refinery Improvement Project (see analysis). Steel production is also set to rise, with the announcement of two new steel production facilities to be located in Sohar’s free zone and industrial estate. Sohar’s food processing industry, 3meanwhile, is set to benefit from two sizeable new projects, a sugar refinery and flour mill, both of which will operate in close proximity to the port’s planned agro-bulk terminal.

In June 2014 the SFZ announced it had signed 22 new lease agreements for projects in the free zone. Jamal bin Aziz Tawfiq, CEO of the SFZ, told local media that 80% of phase one’s 500 ha will be allocated to these new projects, adding to an estimated $15bn in investment already witnessed during the port’s expansion into a multimodal logistics hub.

Salalah

Oman’s second-largest city, Salalah, already boasts a world-class port operated under a successful public-private partnership. It is also currently undergoing expansions aimed at boosting petrochemical and minerals production and exports. Salalah and Sohar are home to the highest concentration of petrochemical projects in Oman, with the Salalah Free Zone hosting Octal Petrochemicals’ polyethylene terephthalate chemical plant, offering total capacity of 1m tpa, in addition to the state-owned Salalah Methanol Company.

Meanwhile, Salalah’s Raysut Industrial Estate, measuring a total of 3.1m sq metres, is home to food processing, PVC pipe, steel fabrication, medical supply and fertiliser manufacturing facilities.

Salalah’s free zone will soon see rapid expansion in limestone exports, following the establishment of a new lime production facility under Belgian developer Carmeuse. In July 2014 Carmeuse announced that it would soon open its $180m lime calcining plant in the Salalah Free Zone, offering eight kilns and total production capacity of 1m tpa.

Limestone, which is widely used in the production of steel, construction materials, paper, chemicals, plastics and paints, is expected to witness strong demand in the coming years, and Salalah’s Dhofar Governorate boasts a geographical advantage, with proximity to the Indian subcontinent and Middle Eastern markets, as well as a sizeable deepwater port. Company officials cited these advantages, as well as the availability of mass quantities of limestone in Oman’s hinterland, as critical factors in its decision to invest in the sultanate.

Aluminium

Sohar’s aluminium production industry is expected to show strong medium-term growth, as expansion plans at Sohar Aluminium, as well as newly established rolling and processing facilities, will see the sultanate significantly increase production and export of aluminium in the coming years.

Sohar Aluminium, established in 2004, is Oman’s biggest non-hydrocarbon industrial venture. The $2.4bn project is 40% owned by the OOC, 40% by the Abu Dhabi National Energy Company and 20% by Rio Tinto Alcan. In 2008 the company signed a liquid metal supply agreement with Oman Aluminium Processing Industries (OAPI), and currently produces 375,000 tpa of primary aluminium in the form of hot metal, of which 50,000 tonnes are purchased by OAPI, and 140,000-160,000 tonnes by the newly established OARC, under an agreement signed in 2011.

The OR185m ($479.04m) OARC facility, which was inaugurated in December 2013, is owned by Takamul Investment Company, and represents one of the largest added-value projects in Oman’s aluminium processing industry. The plant’s annual capacity stands at about 140,000 tpa of multipurpose aluminium sheets, which are sold domestically and exported to Asia, Europe, the Middle East, Australia, North America and South America.

In December 2013 Sohar Aluminium announced plans to invest $35m over the next five years, which will boost production capacity by an estimated 28,000 tpa of primary aluminium. Roughly 60% of hot metal output has been earmarked for local industries, with company officials reporting that a third major aluminium output consumer is under development.

Expansion plans are well under way, and the company announced in September 2014 that its upgraded potline is expected to become operational in November 2014, although HSBC had reported in July 2014 that delays were expected due to a limited supply of natural gas for power generation.

Outside of domestic developments, foreign investors are also considering expanding operations to Oman. A coal shortage in India has led the National Aluminium Company to consider establishing a new aluminium smelter in Oman, according to an August 2014 article in trade publication Metal Guru.

Steel

Sohar is expected to witness substantial growth in steel production, with the announcement of two new steel projects set to be operational by 2020, while a third facility in Sur should create a positive impact on the city’s regional value chain.

India’s Jindal Steel and Power announced plans to commission an $800m, 2m-tpa integrated steel melting plant in Sohar in January 2014. This is not their first foray into Oman’s steel industry; the company acquired Shaheed Iron and Steel’s 1.5m-tpa, gas-based hot briquetted iron unit in 2010 for $500m, while officials recently estimated that the company’s total investment in Sohar stood at $1bn.

The greenfield steel unit, which will be part of Jindal Shaheed Iron and Steel, is one of the largest steel plants in the Gulf region. The company is planning to integrate the unit with a 1.4m-tpa rolling mill, which will be used to produce value-added rebars and wire rods that are used in the construction, tyre manufacturing and electrical industries.

Italian firm Danieli will supply technology for the rolling mill under a $100m contract awarded in February 2014, with Jindal reporting in January 2014 that site work for the rolling mill would commence in 2014 and the mill itself would be commissioned in May 2015. Officials estimate that up to 65% of production will be sold domestically, while the remaining 35% will be exported to the Gulf region.

At the same time, the Moon Iron and Steel Company will soon launch its own steel production facility in the Sohar Industrial Estate. The new facility is expected to offer manufacturing capacity of 1.2m tpa of steel billets, out of which 700,000 tpa will be used to manufacture hot rolls for rebar production, and 500,000 tpa will be sold to the local market.

The company expects operations to begin in September 2015, and in November 2013 Bank Sohar announced that it would act as the sole financial arranger for the $270m project.

Located 200 km southeast of Muscat, Sur is slated for its own steel expansion. In May 2014 South Korean firm Pohang Iron and Steel Company was announced as the winning bidder for a steel mill plant construction contract, which is under development by Oman-based Sun Metals. The $400m project will offer capacity of 2.5m tpa of integrated steel, while Japanese trading conglomerate Sojitz Corporation has already signed on as an offtaker of finished production, as well as a feedstock supplier. The plant is expected to begin operating in 2018.

Mining

Oman contains large deposits of copper, gold, gypsum, limestone, marble, laterite, chromite and kaolin, and the sultanate’s mining and mineral sector is in the midst of a strong growth phase, with the CBO reporting that mining and quarrying grew by 10% during the first quarter of 2014, as a result of domestic and international infrastructure projects.

Production of rocks and minerals increased eightfold between 1996 and 2013, according to legal firm Charles Russell, which reported in March 2013 that over 150 quarrying and mining operations were then under way: 71 for chromite, 183 for crushed rock, 57 for marble, three for sandstone and four each for gypsum, laterite and clay, as well as one salt and one dune sand operation. In the non-metallic sector, two companies export steel-grade limestone, while Oman holds roughly 950m tonnes of gypsum, of which 60% is exported for use in the construction industry.

As it prepares to break ground on the Oman National Railway project, which will require significant quantities of sand and rock, the government is slowly putting the brakes on the export of raw minerals, with a view to encouraging investment in mineral processing and value addition. Projects aimed at extraction of copper, rare earths, limestone and chromite are considered especially high potential; chromite extraction, for example, is key to sustaining growth in Sohar’s burgeoning ferrochrome smelting industry, which is itself critical to steel production.

Food Processing 

Although Oman relies on imports for the majority of its food supply, increased demand has led to a rise in food processing establishments, particularly in Sohar. In March 2014 the government announced that it was moving forward on a new agri-bulk terminal at the Sohar Industrial Port, which will handle an estimated 4m tpa of food products, including 700,000 tpa of grain products from a planned new flour mill. The Public Authority for Strategic Food Reserves also announced plans to build a grain storage facility at the terminal, which will be managed by the Oman Flour Mills Company.

With the Middle East experiencing a 3m-tpa shortfall in sugar processing capacity, Oman’s first sugar refinery, under construction in the Sohar Free Zone, will also benefit from the planned new agro-bulk terminal. The Oman Sugar Refinery Company (OSRC) was established as a joint venture between Britain’s Tate and Lyle Sugars, and an Omani investment firm. The $200m facility will span a 180,000-sq-metre plot at the Sohar Free Zone, producing an estimated 1m tpa of refined sugar when fully complete, and 700,000 tpa during its first phase of operations. In June 2014 Nasser Bin Ali Al Hosani, chairman and managing director of OSRC, told local media that the facility is expected to come online by 2015, sourcing raw sugar cane from Brazil, Thailand, India and Australia, with shipments through Sohar’s bulk terminal.

In August 2014 Andrew Toet, CEO of SIPC, told local media that port authorities were then negotiating with food processing companies from Brazil, India, the UK and a number of African countries to establish downstream facilities in the free zone.

Salalah is poised to benefit from new food processing projects; in May 2014 CKG Holding, an Ivory Coast-based company, announced plans to open a cocoa factory in Oman in 2015. The $150m factory, established as a joint venture between the Omani government and CKG under the title Chocolatry of Oman, is expected to be built in Salalah, offering capacity to process 50,000 tpa of cocoa beans.

Outlook 

Oman’s industrial sector has shown remarkable expansion in recent years, guided by investment-friendly government policies and the overarching Vision 2020 economic development plan, which will see non-oil activities dominate the economy in the coming years. A host of foreign investments in the metals, mining and petrochemicals industries highlight Oman’s attractiveness as an investment destination, with new facilities expected to capitalise on an advantageous geographical position and stable business climate as they proceed with a host of value-added industrial projects.

Indeed, the emphasis on value addition has given the industrial sector a promising long-term forecast, with local industries already benefitting from value-added industrial and manufacturing projects at major hubs in Sohar, Duqm and Salalah.

Although rapid growth has strained the utilities grid, while falling world commodity prices have posed a challenge to exporters, the sultanate’s increased focus on value addition should ensure the timely creation of a thriving domestic industry, driven by a spate of large-scale infrastructure projects, port expansions, and targeted government investment.