Purchase OBG Publications

Strategically situated at the head of the Indian Ocean and bordering Saudi Arabia and the UAE, Oman is a gateway to the GCC region – a re-distribution point and transit hub for shipments to and from Asia, the Indian subcontinent, and East and Central Africa. Transport and logistics has emerged in recent years as a pillar of the sultanate’s development and a critical driver of its economy, benefitting all sectors. Seeking to develop Oman as a leading logistics centre in the region and reduce its dependence on hydrocarbons, the government continues to generously fund logistics infrastructure programmes. This chapter contains an interview with Paul Gregorowitsch, CEO, Oman Air; and a roundtable discussion with Mark Geilenkirchen, CEO, Port of Sohar; David Gledhill, CEO, Port of Salalah; and Reggy Vermeulen, CEO, Port of Duqm.

Announced in January 2016, Oman’s ninth five-year plan is the final component of is long-term blueprint Vision 2020 and includes mining as one of five pillars of economic diversification being fast-tracked by the sultanate. With the government targeting 6% annual growth in the sector, and major regulatory initiatives attracting increased investor interest, mining is poised to surge in 2017-18. In 2015 the contribution of mining and quarrying activities to GDP reached $368m. The building materials segment continued to dominate the mining and quarrying sector in 2015, with production rising by 12% to reach 72m tonnes.

The sultanate’s ninth five-year plan, covering 2016-20, is the final component of the government’s long-term Vision 2020 development strategy, and is focused on reducing reliance on the energy sector’s contribution to GDP, while boosting non-petroleum industrial activities such as mining and quarrying, manufacturing, and building and construction. These together accounted for OR5.33bn ($13.8bn), or 19.8% of GDP, in 2015, a share expected to grow to 29% by the end of the decade, even though the sector faces rising pressure from reduced state spending and the ongoing economic downturn in 2015-16. This chapter contains an interview with Hilal bin Hamad Al Hasani, CEO, Public Establishment for Industrial Estates.

Sentiment in Oman’s real estate sector remains cautiously upbeat in the face of a downturn in the global price of oil and the consequent impact on government spending plans in the sultanate. Residential rental prices have softened in some areas, with landlords preferring to trim prices to avoid untenanted periods in their properties, but in new fashionable developments lettings and sales have been holding firm. This is particularly true in the planned communities known as Integrated Tourism Complexes, which have been popular with Omanis as well as international buyers. In the retail and hospitality sectors several ambitious projects are either in the planning stages or under way, driven by optimism among larger corporate investors about the medium-term prospects of a country with a rapidly growing population and a long track record of peace and stability. This chapter contains an interview with Nasser Al Sheibani, CEO, Al Mouj Muscat.

With a multi-billion-dollar pipeline of public sector contracts and significant private sector developments planned for the remainder of the decade, the construction sector remains a highly significant and growing sector of the Omani economy. In the face of substantial headwinds driven by lower oil prices since the middle of 2014, the government is steering towards a diversified economy, even as it trims expenditures in the short term and delays some schemes created in the years when GCC states were enjoying windfalls from higher hydrocarbons revenues. Private sector home-builders, shopping mall developers and building materials suppliers see room for optimism in a country that experienced one of the fastest average population growth rates of any nation between 2011 and 2015, at 8.5% per year. This chapter contains an interview with Simon Buttery, CEO, Carillion MENA

Driven by rapid industrialisation, a growing population base and state-funded investments in major infrastructure projects, demand for electricity and water has surged in Oman over the past decade. Peak power demand on Oman’s Main Integrated System has more than doubled since 2006, and water demand has almost tripled. Growth forecasts for each range from 6% to 10% over the coming years. The need to increase power and potable water capacity should insulate planned projects from austerity cuts, and ambitious government-driven procurement strategies will provide a host of opportunities for private sector investors seeking solid returns from a single-buyer system. With detailed strategies in place, strong demand growth and a robust regulatory framework supporting private investment in power and water, Oman’s utilities industry is poised to see continued growth.