As Oman-made products build up a strong reputation, the up-and-coming manufacturing sector is boosting economic growth, creating jobs, and raising living standards in the Sultanate.

Since the government announced its plans to grow manufacturing to comprise up to 15% of the nation's GDP by 2020, the industry sector has been operating at full throttle. The sector experienced growth of 16% YoY in 2016, with many manufacturers riding on the core tenets of Tanfeedh, the national initiative designed to build up targeted sectors and improve the national economy. The initiative is part of Oman's ninth Five-Year Development Plan (2016-2020), and focuses on manufacturing, tourism, transport and logistics, mining, and fisheries. “The government's vision and strategy to develop local manufacturing capabilities and use Oman's oil revenues as a contribution to the economy is one of the main factors that has supported local manufacturers and allowed them to grow in Oman," Said Amor Ali Al Habsi, CEO of Oman Chlorine, emphasized to TBY.
Early Tanfeedh estimates predict that the manufacturing sector will benefit from 21 projects in total, as well as attract USD27 billion in investments and create 13,000 jobs. The manufacturing sector already emerged as a major contributor to national GDP at USD6 billion in 2015, with early predictions suggesting that the sector will grow to a value of approximately USD9 billion by 2020.

Demonstrating the strength of the sector over time, the Sultanate's non-oil exports have grown from USD650 million in 2002 to USD8 billion in 2016. Today, locally produced goods are exported to 140 countries around the globe.

As in any industry sector, one of the key methods for success is to bring down the cost of production. In order to compete with industry giants such as India and China, low labor costs are a must. Instead of reducing wages for workers in the sector, Oman looks toward alternatives to produce more for less. Local experts believe that manufacturing and industrial companies in Oman can lower production costs by adopting more automation. In Oman, automation could be used for heavily produced goods such as confectionery, batteries, plastic, marble, cables, fragrances, steel, ceramics, women's fashion items, and precision engineering.


The ease of doing business, including relatively simple export and import documentation, has been one the greatest boons for industrial corporations operating in Oman. Sourcing locally can be a challenge in Oman, but for FMCG companies, packaging is something that can produced in the country and used to reduce costs. One such company is Sweets of Oman, a local confectioner famous for the production of toffees, éclairs, fudges, gum, jellies, hard-boiled candies, marshmallows, and mints. In an interview with TBY, S. Balakrishna, General Manager of Sweets of Oman, explained, “We have to import most of our raw materials, as there is nothing produced locally that we can really use for confectionary goods. We try to source our packaging locally if we can and give local manufacturers the first option." Sweets of Oman has a production capacity of 1,500 tons per month, with much of the confectionery made using traditional methods at its modernized plant. Automated production plays a significant role in making production simple and cost-effective. Through a direct distribution system, the company's products are present at approximately 1,200 retail outlets around the country, while exporting to 45 other nations. Streamlining its branding, the company also staffs its own team, operates its own fleet of delivery vehicles, and has a uniquely trained merchandising staff. With Oman as a base, Sweets of Oman is also doing direct distribution in the UAE, and seeking international partnerships that can be utilized to develop more advanced production strategies and packaging types.

Flexible Industrial Packages Co. (FIPCO) is also focused on the packaging aspect of the FMCG segment, with products used for packing milk powder, tea, coffee, tomato paste, ketchup, juices, chips, chocolates, biscuits, as well as personal care products such as shampoo, detergents, and hair gel. The company has chosen Oman as a base for operations not only because of the vibrant domestic market, but also because of the organic growth of the manufacturing sector nationwide. The company currently produces 5,000 tons of packages per year, exporting up to 60% of that total. “Oman has huge export potential in its manufacturing facilities," Vinay Bhardwaj, CEO of FIPCO, told TBY. “There are four key advantages of being in Oman… the geographic location, the cost factors, the political situation, and the available manpower… [are] exactly what the manufacturing industry needs."

Also operating in the FMCG market is Areej Vegetable Oils & Derivatives (AVOD), a company that has focused on developing logistics and warehousing to have a leading edge in the GCC. “We built our own warehouse with room temperature storage that is totally automated, which is one of only three warehouses in the GCC with those capabilities," Prem Maker, Managing Director of AVOD, told TBY. In terms of logistics, the company has developed a powerful domestic base. Perhaps more important, however, is that AVOD is capitalizing on new international logistics hubs in Oman, such as ports and port facilities. To take full advantage, AVOD is forming partnerships with facilities that will eventually connect the company to international partners in important hotspots like Sohar Port and Jebel Ali. “We are talking about supplying all of eastern North Africa, even South Africa, and anywhere else in the world. We have built our own logistics center so that we can tie up effectively with international links," Maker concluded.


Sourcing raw materials may be difficult for some industries in Oman, but for chemical companies there are a number of ways to ensure that products are local. Demand for chemicals is rising in nearly every sector as the country continues to industrialize, and there is a special need in the oil and gas and infrastructure segments.
Oman Chlorine is a specialized manufacturer focused on producing hydrochloric acid, calcium chloride, and caustic soda. Its reputation for high-quality products has helped it become a key part of Oman's enhanced oil recovery (EOR) efforts, which involves using spillover from the oil and gas industry as a result of acid fracking or well acid treatment. “We try to buy our raw materials from Oman as much as possible in order increase our local content. For example, we buy our limestone from three local mines and use this to produce our calcium products," Al Habsi, CEO of Oman Chlorine, told TBY. “This means this product is 100% made in Oman by Omanis with raw materials from Oman." The company's current production reached 100,000 tons in 2016, with 46% Omanization companywide. In the future, the company plans to utilize its accessible resources and capabilities to expand further.

Meanwhile, Jotun Paints Oman recently opened a new facility of 6ha in area and an annual production capacity of 50 million liters of paint per year. The facility will be home to production areas, warehouses, and administrative offices, built in an environmentally friendly way and designed to emit less volatile organic compounds emissions and have a low carbon footprint. The opening of this technologically advanced factory reflects the commitment of Jotun Paint Oman to the goal of a diversified economy with increased investments in the manufacturing sector.

Supplying much of the raw material needed for many chemical producers, Kunooz Holding produces roughly 1.2 million tons of sand and stone, 48,000sqm of marble, and 250,000 cubic meters of concrete per year. With more than enough material to cover local demand, the company also exports extensively, with approximately 50% of its exports—including 7 million tons of gypsum and limestone—leaving from the Port of Salalah. In total, the company produces annually about 2.4 million tons and 4.2 million tons of gypsum and limestone, respectively. Speaking in regard to the benefits of improving logistics and infrastructure in the industry sector, Dean Cunningham, CEO of Kunooz Holding, advised, “There should be a bit more consolidation among big players, and bigger projects should be made available to the big players who have the technical expertise, financial capacity, and the existing operations so they can grow and build these opportunities."


Automation, better logistics infrastructure, and locally sourced raw materials are the ingredients for success in Oman's industry sector. Ensuring that the success not only continues but also grows exponentially are key international partners and distinct government and private sector support. The Prysmian Group, the largest cable manufacturer in the world, increased its share in the Oman Cables Industry (OCI) to 51% in 2015, becoming a majority stakeholder in an up-and-coming GCC manufacturer. The Prysmian Group intends to share technology, cable expertise, and access to markets. Opening up access to different markets, products, and technologies, OCI represents a case study in a possible path for a variety of Omani companies.

With the Ministry of Industry and Commerce as one of the prime sponsors for better infrastructure, logistics, and automation in the sector, both smaller and larger players are set to see immense growth in coming years. In an interview with TBY, Naushad Akhter Ansari, CEO of Jindal Shadeed Iron & Steel, said, “Support from the ministry is one of the big advantages in Oman. The one thing that has to continue is that the understanding of industrialization and the way that industry works in Oman. Oman taking industrial culture in a positive way helps." Jindal Shadeed is owner of the largest and most modern steel mills in the Middle East, with an annual capacity of 1.4 million tons of rebar and 2 million tons of steel melt per year. Sweets of Oman head Balakrishna confirms, “Manufacturing has been growing in Oman, even though as a percentage it is not large because of the dominance of oil and gas. Manufacturing will continue to grow."