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Oman 2016 | MINING & INDUSTRY | FOCUS: TALENT

International companies will continue to play an important role to support knowledge transfer in the industrial sector.

It would be hard to find someone who would argue that Omanization has been a bad thing for Oman. Increasing employment opportunities and developing new expertise are critical to the development of a sustainable economy, and this initiative has undoubtedly supported that in each sector of the economy. However, knowledge transfer is not always a fast process, and foreign expertise will continue to be pivotal for the industrial sector in particular.

The Sohar Port & Freezone is a particularly attractive location for international companies due to the freedoms provided. One of those is that the minimum level for Omanization in the first years is at 15%—this must then reach 25% after 10 years of operation. The incentive is not so much to encourage international companies to neglect local talent, but more to provide foreign corporations with a greater liberty in the initial years of operation.

Two of these international companies in the Sohar Port & Freezone are Jindal and Vale. Jindal Steel & Power, a part of the Indian conglomerate Jindal Group, is a giant in the field of mining and steel in particular. Vale, from Brazil, is the third largest mining company in the world as well as the largest producer of iron ore. Both of these companies are well established in Sohar, and their contribution to the industrial zone, the city, and the country itself has been significant.

Jindal took over the Shadeed Iron & Steel to become Jindal Shadeed Iron & Steel (JSIS) back in 2010, and the past five years have proved the value of their contribution. The major upgrades that have been made to the Shadeed complex in Sohar has quickly improved the facilities, increased output of their primary product, hot briquetted iron (HBI), and supported the company's contribution to the industrial sector. Similarly, Vale started operations in the Sultanate back in 2011, and its establishment has supported Oman's intentions to discover new markets and new clients. The creation of new markets and trade links is certainly a positive that Oman will relish. According to Naushad Ansari, CEO of JSIS, demand for steel is increasing in the GCC. He pointed to the fact that “Demand has also grown in Africa, especially in the North African region.” For Vale, its presence in Oman has also strengthened its international client base. Sergio Espeschit, CEO of Vale Oman, focused on the fact that Vale was now closer to its clients; “Vale has been a supplier in this market for almost 30 years, but since 2011 when our operations began here, our clients have been receiving our pellets from Oman as opposed to Brazil.” The contribution that an international company makes in a foreign country has to work both ways. In order for the company to profit, it must also benefit the country it is operating in. On the other side, in order for the country to prosper, it must support international companies. Mr. Ansari is confident that this support, among other incentives, has attracted international companies; “Sohar Port has a jetty that can be used for large cargo, and it [Oman] has got geo-political centrality. Another factor that influenced our investment decision is the availability of natural gas in Oman, a vital resource component for our supply-chain. The positive approach of Oman's government also demonstrated that this was the right place to invest.”
The Sohar industrial zone has created the ideal situation for international companies to bring in their expertise. In addition to their economic impact, companies the size of Jindal and Vale have a wealth of expertise that can be passed on successfully to the local workforce. Despite the low minimum for Omanization, Vale had reached 60% of Omanization by 2015. More impressively, perhaps, is that “from this group of Omanis, almost 80% are between 20-30 years old, with around 90% of the group having their first job with Vale.” Encouraging youth to discover new skillsets is a critical part of any foreign company's role, and this has been allowed to take place through the freedoms provided in Sohar.