Muscat: Planned investments in power generation and distribution as well as upstream oil and gas along with its emphasis on increasing 'In-Country Value' (ICV) will see further development of ancillary industries and more private sector participation in manufacturing activities in Oman.
When it comes to the economic and business growth in the Gulf Cooperation Council (GCC) and Oman in particular for the second half of 2014, the government spending in large infrastructure projects will continue to feed the economy, says Rohit Walia, executive chairman of Alpen Capital — a leading investment banking services provider in the region.
"With the oil prices expected to rule firm, the government will have the necessary fiscal fire power to continue with its investment programme within the country," he said.
Speaking about the industry sectors in Oman, Walia said that the country offers important benefits to manufacturers. Attractive power tariffs and availability of land in industrial estates and free zones across the country along with world class infrastructure facilities (modern ports and road network) and fiscal benefits completes the entire envelop of facilities that new projects look for. This, together with a well-developed banking sector and the country's strategic location presenting access to Middle East and North African (Mena) region, African, and European markets are all factors that can make Oman a manufacturing hub for exports to these markets.
"Oman can certainly be an attractive destination for power intensive industries and also for those projects where raw material or feedstock are available locally such as downstream petrochemicals or metal processing and mining projects, to name a few. The government's ICV initiative will encourage new manufacturing activity targeting the oil and gas equipment space and the railway project amongst others. Oman's Free Trade Agreement with United States is another important advantage which presents exciting opportunities to manufacturers which we think has still not been fully exploited," he elaborated.
"Besides manufacturing, Oman is also an attractive market for the services sector. Oman's growing population and increasing middle class with higher disposable income presents opportunities in sectors such as retail, hospitality, healthcare and education. We expect to see steady flow of investments into these areas. We are seeing good interest from established Indian companies who are willing to bring in their expertise and skills to participate in these sectors along with local partners," Walia said.
Alpen business strategy
About Alpen Capital's business strategy for Oman, he says that Oman is a very important market for the company. "It was one of the first markets we established a presence outside Dubai as early as 2008. We primarily work with large institutional clients in Oman to meet their investment banking requirements. We are also looking at several transactions where in Indian companies are looking at setting up a base in Oman and vice versa and we see this as a unique opportunity given our wide expertise in the area."
Alpen Capital is currently working on at least five potential projects in Oman which involve reputed Indian companies seeking to set up manufacturing facilities. The developments are going on. In certain cases, MoUs have been signed with local investors and project feasibilities are underway.
"The year 2014 has started out well for us and we have advised on some interesting transactions across locations including the launch of the first sukuk in the region for this year for Dubai Investments Park. In addition, we have worked on several mergers and acquisitions and debt transactions in sectors such as education, retail and media," Walia said.
"We are also quite active in the GCC-India corridor promoting cross border opportunities and have staff working together to execute these transactions. We have published three research reports this year," he added.