Oman is poised for significant industrial growth with the recent signing of two landmark agreements by OQ Group, totaling over OMR230 million. These strategic partnerships with global leaders M.A.K. and DEEPAK will drive the development of advanced downstream industries in Sohar and Salalah, marking a pivotal shift in the Sultanate’s economic strategy. The focus is now firmly on maximizing the value of locally sourced raw materials and establishing Oman as a key player in regional and global supply chains.
OQ Group Drives Oman’s Downstream Expansion
OQ Group, a global integrated energy company, is spearheading Oman’s ambition to diversify its economy and move beyond reliance on raw material exports. The agreements represent a core component of the “Ladayn” programme, a national industrial transformation initiative designed to connect Oman’s primary resource production with thriving manufacturing sectors. To date, Ladayn has attracted over $220 million in investment commitments, with 27 agreements signed totaling over OMR85 million and nine projects already inaugurated with approximately OMR40 million invested.
This latest wave of investment underscores the success of the Ladayn program and signals a strong commitment to long-term economic diversification. The initiative aims to create a more resilient and sustainable economy, less vulnerable to fluctuations in global commodity prices.
New Projects in Sohar and Salalah: A Closer Look
The agreements encompass two distinct, yet complementary, projects. The first, a collaboration with German company M.A.K., will see the construction of a state-of-the-art plant in the Sohar Freezone dedicated to the production of Purified Terephthalic Acid (PTA) and Polyethylene Terephthalate (PET).
Sohar’s PTA/PET Plant: Boosting Polymer Manufacturing
With an investment exceeding OMR192 million and a substantial production capacity of 700,000 tons per year, this facility will significantly enhance Oman’s polymer manufacturing capabilities. Crucially, the plant will utilize “para-xylene” supplied directly by OQ, creating a fully integrated value chain. This project is expected to generate approximately 700 direct jobs, contributing significantly to local employment.
The second agreement, forged with Indian company DEEPAK, focuses on the establishment of a sodium nitrite and sodium nitrate production plant in the Salalah Freezone. This project, valued at over OMR38 million, will rely on ammonia supplied by OQ over a ten-year renewable period. The facility will boast an annual production capacity of around 70,000 tons, catering to the growing demands of the pharmaceutical and specialized fertilizer industries. Approximately 150 direct jobs will be created through this venture.
Integrated Infrastructure and Operational Efficiency
Supporting these ambitious projects, SOHAR Port and Freezone have signed sub-usufruct and lease agreements with Sohar Petrochemicals Company and Sohar International Urea and Chemical Industries Company. These agreements grant land usufruct rights at Sohar Port and land leasing at Sohar Freezone, fostering an integrated regulatory and operational framework.
This framework seamlessly links port facilities, pipeline networks, and manufacturing units, creating a highly efficient system designed to optimize logistics and reduce operational costs. Emile Hoogsteden, CEO of SOHAR Port, highlighted the strategic importance of this transition to an operational environment capable of handling complex industrial processes with both efficiency and long-term stability.
A Structural Shift Towards Industrial Localization
These agreements represent a fundamental shift in Oman’s economic model. The emphasis is now on anchoring industrial value within the country, rather than simply exporting raw materials. This strategic move is expected to foster integrated value chains encompassing specialized petrochemicals, fertilizers, packaging, and textiles.
Eng. Kamil Bakheet Al Shanfari, CEO of OQ Refineries and Petroleum Industries, emphasized the national role of OQ Group in redirecting locally produced raw materials into downstream industries with integrated operational structures. This localization path, he stated, utilizes industrial investment to build more interconnected and sustainable national production capabilities. The development of these petrochemical projects is a key component of Oman Vision 2040.
Supporting Oman Vision 2040 and Future Growth
The investments align perfectly with the objectives of Oman Vision 2040, a national strategy aimed at diversifying the economy, promoting sustainable development, and enhancing the quality of life for Omani citizens. Eng. Raid Al Rubaie, CEO of Sohar Freezone, noted that the land lease agreement strengthens Sohar Freezone’s position as a major hub for strategic downstream industries with a sustainable economic impact.
Ashraf Hamad Al Mamari, CEO of OQ Group, underscored the importance of these agreements in building more interconnected and sustainable national production capabilities. These projects are not merely about attracting investment; they are about building a future where Oman is a global leader in value-added manufacturing and a key contributor to the global economy.
In conclusion, the agreements between OQ Group, M.A.K., and DEEPAK represent a significant milestone in Oman’s journey towards economic diversification and industrialization. By focusing on downstream industries and leveraging its abundant natural resources, Oman is positioning itself for sustained growth and prosperity. These projects promise not only economic benefits but also valuable employment opportunities and a more resilient future for the Sultanate. To learn more about Oman’s industrial development initiatives, visit the OQ Group website or explore resources related to Oman Vision 2040.