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Oman 2014 | TRANSPORT | B2B: SOHAR INDUSTRIAL PORT COMPANY

TBY talks to André Toet, CEO of Sohar Industrial Port Company, and Jamal T. Aziz, CEO of Sohar Freezone & Deputy CEO of Sohar Industrial Port Company, on relations with between Rotterdam and Oman, freezones, and attracting investment.

André Toet
ANDRÉ TOET
CEO
Sohar Industrial Port Company
Jamal T. Aziz
JAMAL T. AZIZ
CEO & Deputy CEO
Sohar Freezone & Sohar Industrial Port Company

TBY Could you tell me about the relationship between the Port of Rotterdam and the Port of Sohar?

ANDRÉ TOET We are a 50/50 joint venture between the Omani government and the Port of Rotterdam. It first started as a port management joint venture in 2003, but now it is a fully fledged joint venture. Our growth has been stunning since we started. In 2012, we achieved 51% growth and managed to move 43 million tons of goods. The Port of Sohar is on 2,500 hectares of land and the free zone is spread over 4,500 hectares. Container traffic is still relatively low at 200,000 TEUs per annum. The biggest contributors to the port are liquids and dry bulk, followed by general cargo. We are not necessarily uniquely focused on industrial shipping. We have a beautiful port that is built upon three types of business: upstream hydrocarbons, upstream metal and steel, and logistics. Logistics includes liquid and dry bulk, containers, and general cargo. We are also an industrial port, having upstream facilities in oil, refining, methanol, and aromatics. We are a port in which the industry is linked to the logistics activities.

How significant is having the free zone relative to the success of the port?

JAMAL T. AZIZ We started in 2003 with a greenfield site, and owing to the rapid growth in the early years, three-quarters of the port area was fully occupied by 2008. There was $12 billion worth of investments in infrastructure and upstream industries in an area that was almost full. That is about the time we started to look at a possible expansion to encourage downstream industries to take advantage of the port and energy infrastructure available. The free zone is essentially an expansion of the port's industrial estate, but with incentives.

How much business are you receiving from Port Sultan Qaboos?

JTA In terms of containers, we deal with approximately 300,000 TEUs. It is not very big. The key is to create a critical mass for the large ships to come into your port. With 500,000 TEUs, we could attract the main lines.

AT We are receiving container traffic from Port Sultan Qaboos in order to achieve economies of scale by concentrating all the traffic through one port. We have a captive market of 200,000 TEUs now, which in itself is good. There is also a possible 300,000 TEUs from Port Sultan Qaboos in Muscat and 200,000 through Jebel Ali. Our total market is about 500,000-600,000 TEUs, which internationally is an insignificant figure. Jebel Ali is the fifth largest container terminal in the world moving 13 million TEUs. However, having access to the Strait of Hormuz, Sohar could play a vital role with real connections in getting into a game-changing position.

Do you think Oman could become a maritime hub on a global scale?

JTA You have to be very streamlined and efficient in your operations, so that when goods come they can flow quickly inland. Rotterdam is successful in Europe, and it is the gateway to Europe because it is efficient. It has the infrastructure, it can receive large volumes, but they quickly discharge the volumes. We are in a desirable position; however, the road and rail connections need to be efficient. Customs has to be efficient, and the cargo moving through border posts has to be streamlined and easy.