TWENTY-six companies have registered at the Sohar Freezone and with more deals being discussed the enclave plans to make available an area of about 5 million sq m to investors, adding to the current belt of 45 million sq m, said a senior official.
“Five years on, and the first phase of the free zone has already achieved around 80 per cent occupancy, putting growth three years ahead of schedule. Between 2012 and 2013, leased space grew by 46 per cent, and a total of 23 mega projects have been committed in the last 12 months, as we edge ever-closer to reaching our goal of full capacity,” said Edwin Lammers, executive commercial manager.
He did not say how many among the 26 tenants had begun commercial operations.
Sohar Freezone marks the gateway to the port’s rapidly expanding hinterland. It was added to the original concession area back in 2009, seven years after the port was launched as a 50:50 joint venture between Oman and the Port of Rotterdam – then the busiest port in the world.
Sohar Port and Freezone, taken as a single entity, has investments of $15 billion, said Lammers. “The addition of hundreds of kilometres of new expressways and road links, the recent opening of Sohar Airport, and plans to centre commercial rail freight through Sohar are also part of a logistics infrastructure that has attracted $500 million in new investment to the free zone in the last few years.”
Sohar is home to logistic, petrochemical, metal and automotive companies, among other enterprises, and will soon add the country’s first maritime-driven agricultural cluster. These clusters, said Lammers, feed downstream industries with iron and steel, plastics and rubber, ceramics, chemicals, and a host of other materials that are having a very positive knock-on effect on the free zone.
“Our drive to create synergies within and between supply chains means we don’t believe in restricting businesses to either port or free zone. US-based industrial service company Harsco is one example; from its position on the free zone it sources by-products from the steelmakers at Sohar and transforms them into environmentally-friendly raw materials that feed back into the production cycle and provide feedstock for connected industries.
“In terms of the clusters that will receive most attention, we plan on all of them attracting attention, but the addition of an agricultural cluster will be significant not just because it is the first in Oman, but also because of the potential to tap into a massive market and serve a Middle East region that already imports around 90 per cent of its foodstuffs.”
Companies having larger premises, ranging from 110,000 to 500,000 sq m, include Suhail Bahwan, Majan Ferrochrome, Bahar Oman Metals and Al Tamman Indsil. Tenants granted that much space are split between manufacturing and logistics with the former having a clear edge.
Discussing the geographical make-up of tenants at Sohar Freezone, Lammers said a number of them were multinationals and hailed from global locations including the Indian Subcontinent, the Gulf and the Americas. “Together they make up nearly 20 per cent of all tenants and Al Taman Indsil, Metkore, Harsco, Dunes Industries, Vale from Brazil and Jindal from India, are great examples. Add to this the range of local companies that are working with and servicing MNCs – Middle East Tubular Services for Sumitomo in Japan, and both Suhail Bahwan and Saud Bahwan who handle 200,000 cars on behalf of global manufacturers – and you start to get an idea of the global standing that the free zone has gained.”
The automotive cluster is seen as a growth sector and Sohar Freezone has secured lease agreements with Oman’s largest business house, Saud Bahwan, who will lease 400,000 sq m within the hub for a pre-delivery inspection and service centre for Toyota, Daihatsu, Lexus, Kia and Ford. The port is already home to Suhail Bahwan, which represents Nissan and BMW in the region, with the new deal taking annual car handling in the free zone to 200,000.