Oman’s manufacturing sector scenario as compared to other GCC countries is very different. It is known for its micro-manufacturing industrial units. Oman has continued decreasing imports by encouraging these light industries locally. These industries consist mostly of chemicals, plastics, furniture, paper products, textiles etc. The growth in the manufacturing sector in Oman was stagnant at 0.4% as of 2014 but is projected to reach USD XX billion by 2021 at a CAGR of XX%. Physical capital investment, greater exposure to trade, competition in the sector, and encouraging foreign direct investments are factors affecting the growth of this market.
Foreign Investments and ‘Special Economic Zones’ Driving the Sector
The government of Oman is putting its best efforts, through various incentives, to promote foreign investments and to give the manufacturing sector the push it needs. They are aiming at bridging the gap between the resources and capabilities; and are seeking to get advanced technology through participation in many economic diversification projects.
Oman has created special economic zones to boost manufacturing and business friendly regulations. These economic zones and industrial estates have been set-up in Soham, Duqm, Salalah, AlMazunah etc. to encourage new industries and start-ups. In 2012, it was announced by the free trade zones authority that it will invest USD 450 million in expanding these economic zones, which will include constructing warehouses, staff quarters and more land plots.
The biggest challenge that the manufacturing sector faces in Oman is the lack of experience. There are many small scale industries in Oman but they have a very limited number of large scale industries. The other gulf countries have a lot to offer in comparison to Oman and foreign companies prefer them.
The target of 15% share of the manufacturing sector to the GDP of Oman by 2020 is being taken up seriously by the government. Efforts are being made in every sector i.e. automotive, food and beverage etc.; including the launch of a new scheme ICV (in-country value), which is specifically addressed towards the oil and gas industry, aiming to develop local content in servicing the energy sector.
Key Deliverables in the Study