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Intilaaqah
Intilaaqah
or 'Getting Started' is a private sector initiative, which is
similar in concept to the Youth Fund, but does not finance projects.
It was launched on the country's 25th National Day and has been
funded by a number of companies, which sponsor the trainees. The
training is designed to encourage young Omanis to start their
own businesses. Advisers take the trainee through the steps needed
to start a business and give them enterprise skills. At the end
of their training a business plan is produced. The trainee can
then go with his plan to banks or other funding bodies for the
finance needed. In May 1999, certificates were presented to 27
trainees in the fifth batch to complete the programme. In December
1998, prizes donated by several companies were awarded for the
best business plans. First prize went to a marine workshop in
Sur, second prize to a marketing development consultancy and third
prize for a guesthouse project at Ras al-Hadd. The Intilaaqah
Enterprise award for the most promising trainee in 1997 went to
the owner of a fleet of water tankers in the Ghala area.
| Manufacturing |
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Manufacturing
is one of the main sectors of the economy for diversification.
It is envisaged that the manufacturing sector, which contributed
4% to GDP in 1997 will be strengthened and expanded to increase
the sector's share of GDP to 6.5% by the year 2000. The annual
compound growth rate in the fifth Five-Year Plan has been revised
to 12.2% in order to make this a reality. Since the domestic market
is small, the growth in manufacturing will be export led and the
following kinds of industry will be encouraged:
- Industries
using local raw materials
- Export-oriented
industries
- Industries
using gas as the main source of energy or feedstock
- Capital,
technology and knowledge-intensive projects
- Projects
that employ Omanis on as wide a scale as possible
- Downstream
petrochemicals
- Industries
that process raw materials or semi-processed goods for re-export
- Precision
engineering industries, machine tools, machinery etc
- Production
centres for multinationals
According
to the industrial survey undertaken in September 1996, there were
1,355 industrial establishments in Oman in 1995 employing a labour
force of over 26,000. Since then another 200 industrial units
have been established, bringing the number of employees to over
29,000 in this sector of the economy. A statistical survey of
industry was carried out in 1998 but the results are still being
analysed. The first survey showed that over half the units produced
cement, cement products and metals. Two-thirds of the total investment
was in these products as well as in foodstuffs and drinks, but
the ready-made garment industry was the most labour intensive
which, with the cement and cement products, employed almost half
the industrial workforce. Much of industry is still concentrated
in or near the Capital area, but the Government has plans which
will bring manufacturing as well as commercial opportunities to
other parts of the country.
| Major
Projects |
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Plans
for three major projects which will require a total capital investment
of well over RO1000 million are well advanced:
Sur
In
addition to the Oman LNG project, a fertiliser plant is to be
built at Qalhat near Sur with a capacity to produce 1.4 million
tonnes of urea and 330,000 tonnes of excess ammonia per annum
from natural gas for export. During the State Visit of His Majesty
the Sultan to India in April 1997, an agreement was signed between
the Oman Oil Company and Rashtriya Chemicals & Fertilisers
(RCF) and Krishak Bharati Corporation (Kribhco) for the formation
of a joint venture company with the name Oman-India Fertiliser
Company (OMIFCO). The preliminary work on the project arrangements
has been completed and the major activity is to secure the finance
needed through lenders and export credit agencies to supplement
the equity capital of the three partners in the project. The Oman
Oil Company will hold 50%, with the other 50% of the equity shared
equally between the other two partners. A total of about RO420
million will be invested in the project. Gas required for the
project is estimated at 0.95 trillion cubic feet over a 20-year
period. The plant will employ some 450 staff, of whom about half
will be Omanis.
Sohar
The
two other projects, which will be established at Sohar, are an
aluminium smelter and a petrochemical plant. The total cost of
the two projects will be in the order of US$4.37 billion. The
feasibility study for the smelter has been completed and the detailed
design and business plan are now being finalised. The project,
which is set to have an annual capacity of 480,000 tonnes, will
be allocated two trillion cubic feet (tcf) of gas over a 25-year
period. The company will be known as the Sohar Aluminium Smelter
Company (SASCO) and 60% will be owned by the founders, a consortium
of Omani and foreign investors. The remaining 40% of the equity
will be offered for public subscription. The smelter will have
its own power station with an initial capacity of 1200MW, increasing
to 1800 MW and a desalination plant producing 12 million gallons
of water per day, increasing to 30 million gallons per day.
The
petrochemical plant project is expected to have a 450,000 tonnes
per annum ethylene cracker and a similar-sized polyethylene plant.
British Petroleum (BP) will have a 49% stake with the Oman Oil
Company holding 11% and the remaining 40% will be offered to the
public in due course. One trillion cubic feet of gas, over a period
of 25 years, has been allocated for the project. This and other
projects are dependent on delivery of sufficient supplies of natural
gas which are now being developed. A company is being formed to
build and operate a second gas pipeline to Sohar. The Government
has appointed a consultant to prepare a gas master plan to include
a number of outstanding issues, such as where to locate the gas
extractor plant for the petrochemical complex. The construction
of Oman's third port is going ahead and plans are also being made
for an airport, additional power generation, the country's second
oil refinery and a steel plant.
Salalah
The
most important development in 1998 was the modernisation and expansion
of Mina Raysut (now known as Port Salalah) as a container terminal,
which will provide many opportunities for the private sector to
set up commercial and manufacturing ventures. Studies are under
way for an industrial export free zone to be established close
to the new container terminal. The terminal, one of the largest
in the world, is capable of taking the biggest container ships
and will be an important facility before Singapore and Colombo,
hitherto the two nearest ports for such ships after Europe. The
infrastructure is being developed to provide accommodation, warehousing,
electricity and water supplies in anticipation of a new wave of
private sector investment and construction. Proposals are being
considered for a special chemicals zone to be established and
for natural gas to be supplied by pipeline for power generation.
Heavy
Industry
The
cement industry is one of the most successful existing projects
in Oman. The Oman Cement Company (OCC) has increased its clinker
production capacity to 1.2 million and its cement capacity to
1.26 million tonnes by investing in advanced automation. The cement
produced by OCC is nearly all sold on the local market where demand
is increasing. Total sales during 1998 amounted to 892,315 tonnes,
of which only 7,510 tonnes were exported. The Government owns
63% of the company with the remaining 37% of the shares issued
to the public. OCC employs 174 Omanis.
The
Raysut Cement Company has also increased production capacity from
250,000 tonnes per year to 750,000 tonnes per year.
| Industrial
Estates in Oman |
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Industry
in Oman has received a boost with the establishment of the Public
Establishment for Industrial Estates (PEIE) in 1993 under a Royal
Decree to replace the limited mandate of the Rusayl Industrial
Estate Authority. The objectives of PEIE, as defined by the Royal
Decree, are to develop and administer industrial estates and to
encourage the private sector to contribute to the industrialisation
drive in Oman.
So
far, there are four industrial estates operating under PEIE all
over the country: Rusayl, Sohar, Raysut and Nizwa. More estates
in other towns like Sur, Khasab and Buraimi are being planned.
The power & duties of PEIE are as follow:
- Set
up industrial estates as decided in the development plans.
- Set
up and develop services and public utilities like electricity,
water, sewage and roads required by the estates and as determined
by the competent authorities.
- Determine
and distribute land plots for the industries set up at the estates,
while observing the technical conditions as set out by the competent
authorities.
- Issue
building licenses to the industrial installations set up at
the estates, while observing the technical conditions as set
out by the competent authorities.
- Contribute
in promoting products of the estates through exhibitions, advertisements
and media campaigns.
- Hold
training courses and seminars for spreading industrial awareness
among investors and implement them with the help of the concerned
authorities.
Rusayl
Industrial Estate
Established
in 1983, the Rusayl Industrial Estate became fully operational
in 1985, making it the oldest of all the planned and serviced
industrial estates in Oman.
Site
and Size
The
Rusayl Industrial Estate is situated 45km from the Capital city
of Muscat and the main sea port of Mina Qaboos. The Seeb International
Airport, the largest in the country, is just 6km from the estate.
Tarmac roads link the estate with Muscat, other parts of Oman
and the neighbouring countries. The Rusayl Industrial Estate lies
on a stretch of land of 340 hectares, out of which, 170 hectares
have been fully developed and subdivided into plots of various
sizes.
Industries
at Rusayl
There
are 107 industries in operation at Rusayl Estate. There are a
further five industrial units under construction and over 40 projects
currently under evaluation. Factories in operation produce chemicals,
electric and building materials, paints, textiles and garments,
computer stationery, aluminium products, car batteries, steel
structures and poly products, to name but a few.
Housing
Complex
An
imposing residential complex for male workers employed by the
estate's tenants was constructed in 1989. Situated 3 km away from
the estate, the residential complex has a housing capacity for
over 1,000 persons. A ladies' dormitory was recently constructed
within the estate to accommodate female workers.
Amenities
and recreational facilities
The
housing complex is provided with a variety of services such as
shops, a mosque, a leisure centre, a cinema theatre and grassed
soccer play ground.
Sohar Industrial Estate
Site
and Size
Sohar
Industrial Estate is situated about 220 km away from the Capital
city of Muscat and 180 km from Dubai in the United Arab Emirates
(UAE). It is linked to Muscat and UAE through the international
highway. The rural town of Sohar - 'The Garden City of Oman' -
is just 22km to the south of the industrial estate. Majan township,
the Oman Mining Company's residential quarters, is about 3km southwest
of the Estate. Majis jetty, on the coast of Oman gulf, is only
4km northwest. Thanks to its strategic location, Sohar Estate
is the focus of attention to prospective investors.
Industries
at Sohar
There
are 28 industries in production at Sohar, 18 units under construction
and 44 projects expected to come up in the near future, thus making
Sohar a rapidly growing estate. Industries in Sohar Estate produce
a wide range of products such as food stuffs, detergents, sulpho-chemicals,
leather footwear, furniture, toothpaste, ice cream, resins, glass,
steel bars and engine oil. The anticipated products from the forthcoming
factories include jewelry, roof and cladding sheets, baby food,
galvanized pipes, electric fittings, sports shoes, ear buds, sweets,
polythene bags, and chlorine.
Raysut
Industrial Estate
Site
and Size
The
Raysut Industrial Estate is located in Oman's southern province
of Dhofar. The provincial capital city of Salalah lies 15km away
from the estate. The estate is just 2km off the Arabian sea coast
and 6km from the Raysut sea port which has been extended to make
it one of the most important container ports in the whole of the
Middle East. Oman's international borders with the Arab Republic
of Yemen are 200 km away from the estate. Raysut holds a strategic
position on the intersection between East Africa, Yemen and the
Far East. The total surface area of Raysut Industrial Estate is
103 hectares, of which 30 hectares have been fully developed,
serviced and subdivided into industrial plots with sizes ranging
from 1350m2 to 6300m2.
Industries
at Raysut
Industries
existent at Raysut estate are zoned in such a way that highly
polluting industries are kept far away from foodstuff and other
clean factories. There are five industries currently operational:
school stationery manufacturers; ice and fish; shoes; garments;
and box files. Four more industries are being constructed which
are expected to produce flour, frozen chickens, PVC pipes and
steel fabrication.
Nizwa Industrial Estate
Site
and Size
The
Nizwa Industrial Estate lies at about 15km from the regional city
of Nizwa, the Capital of Oman's interior region. Nizwa town itself
is 180km away from Muscat. The total area of Nizwa Industrial
Estate is 200 hectares. Only 26 hectares has been developed so
far. The developed area contains 80 land plots provided with all
infrastructure services.
Industries
at Nizwa
Being
a newly developed estate, five pre-built industrial sheds have
so far been constructed and among the projects in operation are
the manufacture of ceramic tiles, paper products and foodstuffs.
A further nine industrial projects have applied for units on the
Nizwa Estate and these are under the process of technical evaluation.
Other planned projects are the manufacture of leather suitcases,
novelties, military badges, medical drugs, medical gloves, chemicals,
and disinfectants.
New
Industrial Estates
As
part of its drive to build industrial estates in various regions
of Oman, PEIE has commissioned a consultant for preparing the
feasibility studies of proposed parks in the regional towns of
Sur Buraimi and Khasab.
Industrial
Bank of Oman
The
IBO, which was formally inaugurated in December 1998, has become
the first private sector industrial bank to be established in
the Middle East. Besides advancing loans for medium and large
scale projects, the new bank offers advisory services and may
consider equity participation in industrial projects. The IBO
is a joint stock company with authorised capital of RO40 million
and issued share capital of RO25 million.
| Minerals |
|
In
December 1997, a Royal Decree transferred the Directorate General
of Minerals to the Ministry of Commerce and Industry from the
Ministry of Petroleum and Minerals (now renamed Ministry of Oil
and Gas).
Minerals
played an important part in Oman’s ancient economy. Copper
was mined from several sites about 5000 years ago. During the
Iron Age in 1000 B.C, copper was extracted from a mine at Lasail
in the Wadi Jizzi near to Sohar. The deposit was reworked in 1983
by the Oman Mining Company. Cumulative production and reserves
from Lasail and two other mines in the same area amounted to 19.2
million tonnes until all three mines were depleted in 1994. As
part of the copper project, the Oman Mining Company had built
a smelter adjacent to the mining sites which produced over 142,946
tonnes of copper cathodes since it went into production in 1983
until September 1994. The mines were closed due to depletion of
the copper ore in October 1994. Imported copper concentrate is
now treated, refined and re-exported from Mina Qaboos.
After
continuous exploration activity, significant reserves of copper
were discovered along the Batinah coast in 1997. Copper ore deposits
have also been found at Rakkah and Hayl as-Safil, Wilayat of Yanqul,
some 275 km from the smelter. According to a pre-feasibility study,
there are reserves of 18.66 million tonnes at 0.35% cut-off grade.
The ore, which has not yet been mined, will be converted into
concentrate on site and transported to Sohar for refining and
export. During 1999, the exploration of the Batinah coastal area
continued.
The
Oman Mining Company was established originally as a joint venture
with the private sector but is now entirely State owned. With
the prospect of developing further deposits, a consultant was
appointed in 1996 to evaluate the company for privatisation. Phase
One of the report has been accepted by the privatisation committee
and as soon as Phase Two has been approved, it is expected that
privatisation will go ahead. The decision will depend on the state
of the international commodity market and the world price of metals
like gold and copper. Prices are currently depressed but are expected
to improve in the year 2000.
In
1994, a processing plant to extract gold and silver from the copper
oxide deposits near Yanqul was built and production started later
in the year. In 1998, the gold produced was 18,309 troy oz. The
life of the project is unlikely to extend much beyond 2000. The
company, which was originally established in 1978, has achieved
74% Omanisation.
The
Oman Chromite Company was formed in 1991 and currently exports
chromite ore to Japan and China. Chromite reserves are put at
two million tonnes and annual production increased from 17,985
tonnes in 1997 to 29,756 tonnes in 1998.
Coal
deposits with reserves of 122 million tonnes have been discovered
in the Wadi Muswa and the Wadi Fisaw areas of the Sharqiya near
Sur. Private investors are being encouraged to develop the deposits,
while additional studies are being made with UN technical assistance.
Oman
has large resources of industrial rocks and minerals, some of
which are already being exploited. They include silica sand, dolomite,
limestone, gypsum, various types of clay, sands and aggregate.
Production of sand and aggregate was 13,518,010 tonnes in 1998.
Laterite production was 37,640 tonnes and salt production was
13,778 tonnes in 1998.
The
Majan Glass Company is likely to extract the silica sand deposits
in central and north Oman. There are four separate companies extracting
marble. Production of marble in 1998 amounted to 166,085 tonnes.
It is hoped to launch new export projects this year, exploiting
the gypsum found at Shuwaymiyah and the limestone deposits at
Quriyat, Musandam, Sur and Salalah. Production of limestone in
1998 was 1,901,713 tonnes and gypsum 165,000 tonnes. Gabbro is
expected to be mined at Jabal Al-Sheick and Khatmat Milaha for
export to various Gulf countries.
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