Industry Insights: Oman’s Manufacturing Sector

New investment is expected to help Oman sustain expansion of its manufacturing sector, which has established itself as a leading component of the economy on the back of strong growth

manufacturing oman; industry

Manufacturing is one of the vital sectors identified by the government of Oman as part of its economic diversification strategy 2040. The push to increase manufacturing investment is further supported by the government plans to quicken the pace of privatisation in the Sultanate. 

Oman’s Manufacturing Sector Quick Takes:

  • The sector’s contribution to Oman’s GDP grew to RO3,011 million in 2018 from RO2,778.70 million in 2017, while its contribution to GDP from 1998 until 2018 averaged RO1844.07 million.
  • Industrial activities in general grew until the end of September 2018 by 1.2 per cent, while manufacturing industries increased to reach about RO2.8 billion by the end of 2017.
  • The acceleration in growth comes amid efforts to broaden the manufacturing base and increase its contribution to GDP to 15 per cent by the end of the decade, as part of Oman Vision 2020, the Sultanate’s economic development strategy.
  • A series of new investments look set to boost manufacturing output in the coming year.

Industry Insights: Oman’s Manufacturing Sector

Industry Overview

Oman has emerged as one of the major investment destinations in various sectors in recent years. This is a result of the efforts undertaken by the public and private sectors as the Sultanate has witnessed significant development in transport and logistics fields, thanks to the ports, airports and roads that have been implemented in accordance to the international standards.

In addition, Oman today has a number of major economic zones, which include Duqm Special Economic Zone Authority, Sohar Port and Freezone, Salalah Free Zone.

Industrial Estates in Oman

The Public Establishment for Industrial Estates – Madayn is managing and operating seven industrial cities throughout the Sultanate, in addition to the IT Park known as Knowledge Oasis Muscat (KOM) and Al Mazunah Free Zone.

Madayn is part of an integrated economic system that seeks to achieve global reach through constructing and operating advanced business cities that go in line with the best international experiences.

Madayn’s vision is to enhance Oman’s position as a leading regional centre of manufacturing, ICT, innovation and entrepreneurship excellence, and its mission to attract industrial investments and provide continued support, through regionally and globally competitive strategies, good infrastructure, value adding services, and easy governmental processes.

Read: Samail Industrial City to get new facility

The objectives of Madayn include attracting foreign investments to the Sultanate and localising the national capital; contributing to stimulating the private sector to achieve sustainable economic and social development; achieving environmental sustainability; and contributing to the creation of new job opportunities for the national cadres.

Shumookh Investment and Services, the investment arm of the Public Establishment for Industrial Estates (Madayn), signed an agreement with Sadeen Group to implement a number of development projects in the industrial cities of Madayn with an estimated value touching $120 million.

Industry Insights: Oman’s Manufacturing Sector

This agreement comes to meet the development requirements of the industrial cities that pertain to Madayn and provide all necessary services for the investors. As per the agreement, Sadeen Group will finance Shumookh Investment to implement a range of major projects in Rusayl and Samail Industrial Cities, and the Knowledge Oasis Muscat.

The Engineering, Procurement, Construction and Financing (EPCF) agreement aims at providing comprehensive services such as offices and housing. The projects will be implemented over the next three years with building areas exceeding 164,000 square metres.

The vision of Shumookh is to develop globally competitive industrial infrastructure in the industrial cities of Madayn and create the best environment for the growth of industries in Oman through the attraction of strategic partnerships to invest and implementation of diverse infrastructure development projects in the industrial cities pertaining to Madayn.

Sohar-based industries   

Oman is also investing more than $5 billion in the steel industry in which the Sultanate aims to be one of the Gulf Cooperation Council’s leading producers. In addition to the steel industry, there is also the industry of aluminium in Sohar industrial area.

Sohar Aluminium Company

Sohar Aluminium Company, established in 2004, is considered one of the leading projects that play a major role in the sultanate’s economic diversification strategy. A central component of Sohar Aluminium’s strategy is to promote and support the growth of downstream aluminium industries within the Sultanate.

Read: Sohar Aluminium: A decade of excellence

A new factory that is being set up in Sohar to manufacture alloy wheels with an export value targeted at upwards of RO20mn is expected to generate up to 500 jobs for talented local workers across the 12 steps of its production process. Sohar Aluminium Plant, located next door to the alloy wheel manufacturing facility, will supply 45 per cent of the raw materials needed for the proposed output.

Sohar Port and Freezone

The Food Cluster at Sohar Port and Freezone has arguably been one of the most prominent projects, especially given the massive potential of the food industry, both in upstream and downstream businesses.

This project will drive further integration between the port and free zone complex. The aim of this cluster is to promote the entire value chain of food processing and logistics support within the expanding multibillion-dollar regional food industry.

In a significant effort to tap into the Sultanate’s renewable energy potential, Sohar Port and Freezone recently entered into a land lease agreement with Shell Development Oman (SDO).

This agreement means that businesses in the Sohar Freezone could be powered by solar photovoltaic (PV) projects instead of gas. In line with the partnership, Sohar Freezone will allocate 600-hectares of land for solar plants under development, with capacities ranging from 10MW up to 40MV.

The pioneering project of 25MW will be focused on providing dedicated supply to Al Tamman Indsil Ferrochrome, and the entire development will create long lasting economic value for the nation and the companies within the free zone.

Industry Insights: Oman’s Manufacturing Sector

SV Pittie Sohar Textiles

In December 2018, SV Pittie Sohar Textiles launched their textile cluster in Sohar with the inauguration of the company’s cotton yarn production unit No 1. Altogether, there will be four state-of-the-art yarn manufacturing units on this campus, covering over two million square feet area, housing the latest and most efficient automated technology in the textile industry, while also emphasising an optimal health and safety environment for its employees.

With planned completion by November 2019, the units will compose of 300,000 spindles and 7,000 rotors producing over 100,000 metric tonnes of world-class compact cotton yarn. Total investment in the project is estimated at $300mn – an investment that has the potential to ignite the growth of a wider textile cluster over the long-term.

Global Glass Recycling

The GCC’s first glass recycling plant, a fully-automated facility with a production capacity of 650-tonnes per day, will be operational by the first half of 2020 at phase 7, Sohar Industrial Estate. Global Glass Recycling, which owns and will operate the plant, will be the first glass recycling facility within the Gulf Cooperation Council (GCC).

It will be a fully automated plant with a 650-tonne per day capacity. The plant is particularly designed to meet the needs of varied glass manufacturers within the GCC region in terms of specifications, volumes and pricing.


Brazil’s mining giant Vale, the world’s No.1 iron ore and nickel producer, invested around $2bn in its pelletizing plant in Sohar with a nominal capacity of 9 million tonne of pellets per annum connected with a distribution cenre with 40 million tonnes of handling capacity.

In November 2018, Vale signed a four-year contract with Emirates Steel, the largest steel producer in the United Arab Emirates, to supply iron ore pellets for the Arabian company’s steel production in Abu Dhabi.

Voltamp Power

Voltamp Power is the first and only company in the GCC to manufacture and supply 160MVA and 125MVA of 132KV class power transformers. The company’s world-class manufacturing facility in Sohar is one of its kind in the region.

Liwa Plastics Industry Project

Orpic confirmed that the construction work in its Liwa Plastics Industry Project has exceeded the 67 per cent barrier in all four project packages.

This project is one of the largest transformational projects in the Sultanate, which will contribute to improving and increasing the diversity of the production of Orpic, developing its business model and increasing profits, as well as developing the plastic products industry in the Sultanate and providing opportunities for business and employment in the Sultanate, besides providing new opportunities for business development in the Sultanate.

The project is expected to be completed by 2020. The total value of the project is $6.7bn, with $1.5bn being allocated as an added domestic value. The engineering, procurement and construction activities of this project extend over a period of four years until its launch in 2020, which will add greater value to the local value of the Oman through the efforts of the local value added management team at Orpic, which works together with key contractors for the four project packages.

Plastic production in the Sultanate is expected to rise after the operation of the Liwa Plastic Industries Complex at a rate of more than 2 million tonnes, which raises the production of Orpic of polypropylene and polyethylene to 1.4 million tonnes.

Through its operations in its integrated complex in Sohar, which includes refineries, aromatics plant, steam cracking unit, polypropylene and polyethylene plants, Orpic will become one of the most effective companies in the refineries and petrochemical industries in the world, which will enable the company to achieve the maximum value of the Sultanate’s production of hydrocarbons.

Salalah Free Zone

Salalah Free Zone Company continues its efforts to attract foreign direct investments and the zone has achieved an increase in the volume of investments to reach RO2 billion. In May 2019, Salalah Free Zone (SFZ) has signed a usufruct subcontract agreement for two new projects in food and import-export trade sectors with an investment of $19mn. 

Deepak Oman Industries Project has laid the foundation for its $120 million integrated chemical complex in Salalah Free Zone. The project includes the construction of a complex that will produce about 225,000 tonnes per year of chemicals, including calcium chloride and sodium nitrate, as well as locally available raw materials such as ammonia and limestone.

Developments in Duqm 

The government of Oman has invested substantial public funds and executed several strategic projects to unlock the economic potential of Duqm.

The Special Economic Zone in Oman offers an attractive package of investment incentives and tax cuts that aim at enhancing the business environment for the private sector and improve its competitive standing.

Duqm Industrial Land Company DILC, a subsidiary of Port of Duqm Company has been granted by the Oman Government the usufruct right over Industrial Land for over 35 years. Under the arrangement it has the exclusive rights to develop, lease, manage, operate and market about 2000 ha of industrial land located inside of the Special Economic Zone of Duqm.

These industrial lands will be largely accommodated by petrochemical, medium heavy and heavy industrial activities.

Duqm Refinery

Duqm Refinery, a joint venture equally owned by Oman Oil Company and Kuwait Petroleum International, is currently building the 230,000 barrels per day (bpd)-refinery in Duqm. In June 2019, Duqm Refinery and Petrochemicals Industries Company (DRPIC) has awarded the front-end engineering design (FEED) contract for its petrochemicals complex in Duqm to the UK-based Wood Plc. The Duqm Petrochemical Project is the second stage of the integrated refinery and petrochemical complex.

Sebacic Oman Refinery

Sebacic Oman Refinery, the first industrial project in the heavy industries zone, has entered the production stage in February 2019. The refinery is the first of its kind in the Middle East for the production of Sebacic acid extracted from castor oil and used in many chemical, plastics and pharmaceutical industries, as well as a feedstock in the manufacture of disinfectants, paints and perfumes. This product of high economic value encourages the establishment of other industries.

Karwa Motors

Karwa Motors bus manufacturing plant, which will start production in the second half of 2020 at its manufacturing plant in Duqm, is one of the several mega industrial projects that will generate job opportunities for Omanis in the country.

Karwa Motors is a joint venture partnership between Mowasalat, Qatar national transport company, with a 70 per cent equity stake and Oman Investment Fund (OIF) with the remaining 30 per cent stake, will start production of buses in the second half of 2020. Spread over 100,000 sqm, the manufacturing and assembly plant in Duqm will be well-equipped to produce around 1,000 a year.

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