Salalah project sets corporate pulse racing
2008-02-29
Lloyds List: PHASE one of the Salalah Free Trade Zone project has now been completed on a site of around 260 ha, out of the 1,500 ha of land available for the zone adjacent to Salalah port.
Although marketing of the zone has so far been at a relatively low key level, it has already been successful in attracting some significant investment projects. Around 90% of this first stage is in fact already leased, with four major projects signed up. Octal Petrochemicals is setting up a polymer products manufacturing facility on the site and has started exporting PET-Film via the Port of Salalah. Construction of a factory that will manufacture the PET resins as a raw material is now under way. The US-based company has pledged around $1bn of investment in the Salalah Free Trade Zone, and will create around 850 jobs on the site.
In addition, the zone will be home to the Salalah Methanol project, which is being undertaken by the Oman Oil Co. Production of methanol is due to start in the first half of 2010 at an initial rate of 3,000 tonnes per day, using liquefied natural gas supplied by Oman Oil. The size of the investment in the Salalah Methanol Project will be around $900m and it is expected to employ around 400 people once it is operational. Dunes Oman is a company backed by Brakes India and will operate a foundry inside the zone, capable of producing 17,500 tonnes of ductile iron and grey iron castings annually, for the automotive industry. The fourth confirmed investor is Dofar Nutraceuticals, which will target the global market for food supplements and energy drinks.
Awadh Salim Al-Shafrani, chief executive officer of the Salalah Free Trade Zone Authority, said: “Salalah Free Trade Zone is on a fast-track development course. “Although we are yet to launch a global marketing campaign, the result achieved in a brief span of time are remarkable.” He pointed out that the Royal Decree to set up the free zone was only issued in June 2006.
Phase two of the project is expected to commence shortly. This will focus on a second parcel of land in the Adhan area, close to the Salalah Hilton. It is expected that developments on this site will include warehousing units, leased offices, the Salalah Free Trade Zone’s own headquarters and a Commercial Zone. Mr Al-Shafrani said: “We are open for any investment that supports the objectives of the sustainable economic and trade development of Oman.
“Salalah’s geographic and geo-political advantages are on a par with any other location in the region and companies can enjoy a safe haven for their investments in a peaceful environment. “The zone is well placed to serve markets in Africa, Asia, the US and Europe, and offers significant savings in ocean transport times.”
Salalah Free Trade Zone provides all of the incentives typically offered by free zones in the region, including 100% ownership by foreign investors, exemption from customs duties on raw materials and finished products, no income tax, no restrictions on the transfer and repatriation of income and long term leases.
One of the unique advantages of the zone, aside from its proximity to the Salalah port complex, is that there is no paid up capital requirement for free zone-based companies.