Typical of most of the GCC states, Oman has seen big investments in the metals sector over the past decade. But more greenfield projects and upgrades are underway.

Petrochemicals and general manufacturing are also making headway with the former having attracted significant investments. Oman is also awaiting big infrastructure projects, particularly railway lines that will radically change the sultanate’s economy in the years to come.

Vale Oman, which has a nine million tonnes per year pelletisation plant, achieved full-capacity production in 2012 and is awaiting the much talked about expansion into the second phase. The company has said it has been guaranteed gas supplies to double capacity.

Sohar Aluminium announced several years ago it will create additional capacity.

Oman is looking forward to the commissioning this month of Jindal Steel and Power Ltd (JSPL)’s steel plant designed to have capacity of two million tonnes annually in Sohar, Northern Oman. The Indian company acquired the Shadeed Iron and Steel Plant for $400 million three years ago. JSPL’s investment to date will be around $1 billion including the cost of acquisition, the cost of the new steel plant and the integration of the new plant with a bar and rod mill. JSPL has said that after commissioning of the steel melting shop, it will invest in additional facilities to make bars, rods and long products.

Another company with an Indian connection, Sun Metals, is going ahead with plans to build an integrated steel plant in Sur, Eastern Oman. It appointed UK-based consultant Steelworks Engineering Systems, which was instrumental in convincing the promoters that the plant would be viable. The plans are for a steel complex of 1.2 million tonnes including an iron ore pelletisation plant and a direct reduced iron unit.

Several investors have announced a project to build a steel plant of output capacity of one million tonnes in the southern city of Salalah. Dhofar Steel will be a joint venture of Oman’s Salalah Development Company, the Al Suwaidi Group of the UAE and Saudi Arabia’s Al Tuwairqi Group,

A chemical plant at Sohar Industrial Estate

Commissioning is set to begin soon at Oman’s first ferrochrome plant that has capacity to produce 75,000 tonnes annually. The plant, belonging to Al Tamman Indsil Ferro Chrome, will move into Phase 2 only if it is guaranteed sufficient feed of Omani chrome ore on a long-term basis. There are currently no stainless steel facilities in Oman, so the entire production will go overseas. Close on the heels of Al Tamman, there are three other ferrochrome ventures waiting in the wings.

PETROCHEMICALS PROGRESS
Oman has built considerably petrochemicals capacity in recent years. Oman Refineries and Petroleum Industries Co (Orpic) is taking the first steps towards building a $3.6 billion integrated plastics project in Sohar. A Sohar refinery improvement project will provide the key ingredients for the companion plastics plant as well Oman’s plastics industry. The project will have as components a gas extraction plant in Fahud, a 300 km pipeline between Fahud and Sohar Industrial port for transporting gas, a steam cracker unit, a high-density polyethylene plant, a linear low-density polyethylene plant and a polypropylene plant. Completion time for the project is 2018. According to Orpic’s CEO Musab Al Mahruqi, the Sohar refinery upgrade will take Orpic’s revenues to over $14 billion in 2016 from $10 billion in 2012, with revenues surging further by $1.4 billion after the completion of the plastics project in 2018.

Production capacity in Oman’s petrochemicals sector was 9.5 million tonnes in 2012, up from 8.9 million tonnes in the previous year, according to the Gulf Petrochemicals and Chemicals Association (GPCA). That volume accounts for 7.4 per cent of GCC capacity, behind Saudi Arabia and Qatar which account for 86.4 million tonnes and 16.8 million tonnes of capacity respectively.

In the plastics sector, the Octal plant is a leader with capacities of its PET sheet and resin totally running close to a million tonnes annually and further expansions planned to take output capability to 2.5 million tonnes of PET and purified terephthalic acid (PTA). The company says it accounts for close to 1.5 per cent of the sultanate’s GDP, 10 per cent of Oman’s non-oil exports and generates around $180 million worth of income for Omani businesses and SMEs as part of a sustainable and locally-sourced supply chain.

Mega industries and SMEs are helping build Oman’s industrial base. Industrial activities were said to have contributed 16.5 per cent of the GDP at RO4.9 billion ($12.7 billion) in 2012 against RO3.8 billion in the year before.

Oman’s SMEs came in for some drubbing recently for not being aggressive and dedicated in furthering their interests. "Most of them have failed to understand the importance of their involvement into SME affairs on a day-to-day basis. This is reflecting adversely on such enterprises and failing to serve the real goal of the sector despite so much of money, time and energy invested against them," said Minister of Commerce and Industry Dr Ali bin Masoud Al Sunaidy. He sugar-coated the pill with the announcement that a RO70 million fund would be made available to them by year’s end.

Meanwhile, most investors and suppliers are abuzz over the construction of railway facilities in the country. The railway system will need 12,000 km of rail, 10 million sleepers, 20 million elastic pads, 2.25 million metres of pipe, 35 tunnels, 45 via ducts and 98 pedestrian crossings, according to a paper presented by Luca Beccastrini, Middle East manager of Italferr, the Italian engineering firm that won the consultancy services for a preliminary design contract for the national railway project.

Another infrastructure project that has engaged the attention of businessmen is the plan for a massive crude oil storage complex at Ras Markaz, 70 km north of the Port of Duqm on the Wusta coast. It will hold around 200 million barrels of the product, making it one of the largest of its kind in the world.