'Oman’s industrial sector needs to diversify income sources'

Business Saturday 06/February/2016 20:05 PM
By: Times News Service
'Oman’s industrial sector needs to diversify income sources'

Muscat: On the occasion of the upcoming Sultanate’s Industry Day, which falls on February 9 each year, Hilal bin Hamad Al Hasani, chief executive officer (CEO) of the Public Establishment for Industrial Estates (PEIE), said all market players are aiming to step up efforts towards the further development of the industrial sector and thus diversifying income sources and advancing the national economy, in light of the global oil price slump.
Al Hasani emphasised on the support enjoyed by the industrial sector under the leadership of His Majesty Sultan Qaboos bin Said, saying it is one of the vital economic pillars of the country.
"This support culminated by the issuance of the Royal Decree no. 32/2015 promulgating the system (law) of the Public Establishment for Industrial Estates (PEIE). The Royal Decree comes in line with the development witnessed to provide a legal framework for contributing effectively in localising national investments and attracting foreign investments. It also falls in line with the advancement of applying international conventions by taking advantage of several international cooperation agreements," Al Hasani stated.
He further said the Royal Decree and the regulations of PEIE included legal aspects related to several functions and requirements of PEIE that contribute to attracting and developing investments in all sectors. It also grants PEIE with additional incentives and benefits for several activities, as well as the industrial estates in the area of opening doors for foreign investments with specific tax incentives to promote the capability of regional competition. As per the Royal Decree, integrated investment outlets will be established within the industrial estates to provide government services with regards to the issuance of licenses, approvals, visas, activity registration, among other services.
"As per the regulations, PEIE will attract local and international developers to develop, establish and operate some of the new industrial estates, expand the existing estates, and provide additional services in the estates that meet the needs and requirements of our investors," Al Hasani pointed out, adding, "Since the regulations were announced, the final drafts of the executive regulations have been prepared and will be submitted to the board of directors for approval before they are submitted to the Minister of Commerce and Industry for final approval. Work is also underway to establish investment outlets in the industrial estates in cooperation with concerned government entities."
Attracting Investments
Commenting on the results of PEIE’s 5th Plan, accompanying the 8th Development Plan (2011-2015), Al Hasani said, "The Public Establishment for Industrial Estates has been able to attract investments valued at more than OMR1,800 million, at a rate of OMR36 million annually. Besides, PEIE has been able to localise 805 projects involved in various investment activities in the various industrial estates, at a rate of 161 projects per year, which brings the cumulative total of the projects to 1,555 by the end of 2015. The localised productive projects have contributed to the creation of 19,973 direct job opportunities, bringing the cumulative number of workforce in the industrial estates to 41,337. Adding to this, more job opportunities will be created through the projects that are currently under implementation (242 projects), and the projects that have been allocated land (458 projects), which will commence production in the next three years. It is estimated that these projects will offer more than 33,000 job opportunities."
He added that PEIE has been able to lease7.29 million square meters of lands for industrial, commercial and service uses, which will eventually boost the total area of leased space to around 32.2 million square meters at a growth rate of 1.46 million square meters per year.
The total area has increased by an additional 11.69 million square meters, with the total space touching more than 90.5 million square meters, adding to the area of the new proposed industrial estates in Thumrait, Shinas and Al Mudhaibi. Land allocation for these estates had already been completed by the end of 2015.
Al Raha Village
On the progress of the Al Raha Village, which is located in the Al Rusayl Industrial Estate, Al Hasani informed that the occupancy rate of the project during its first phase had touched 100 per cent.
The project will be inaugurated by Dr. Ali bin Masoud Al Sunaidi, minister of Commerce and Industry on the Sultanate’s Industry Day. "This project will fulfil the future vision of PEIE and offer value added services in the industrial estates. Developed by the investment arm of PEIE–Shumookh Investment and Services SAOC, the Al Raha Village is a township project with integrated residential, commercial and recreational facilities, as well as other related services. The township has been designed to offer high living standards in line with the international norms of observing best welfare for resident workers in the companies and factories," he pointed out.
He emphasised that the Al Raha Village has been designed to provide an integrated solution to the problem of accommodating thousands of workers and technicians, who will be mobilised in the coming years. "This project is located at a strategic site on the Al Rusayl Industrial Estate.
It is being built over a total land plot of about 65,000 square meters. The project is divided into three phases at a total cost of OMR56 million and has a capacity to accommodate more than 11,000 residents. The project comprises a full range of integrated facilities and services, including a central kitchen, dining halls, outdoor and indoor recreational facilities, a health centre, a transportation hub and around 3,000 square metres of commercial spaces," he added.
Al Hasani explained that the Shumookh Investment and Services Company is a closed joint company (S.A.O.C) established in October, 2010. The vision of Shumookh is to develop globally competitive industrial infrastructure in the industrial estates of PEIE and strive to create the best environment for the growth of industries in Oman. This shall be achieved through attracting strategic partnerships from a range of local and global economic entities to invest, and by implementing diverse infrastructure development projects in the industrial estates of PEIE.
Al Mazunah Free Zone
The strategic location of the Al Mazunah Free Zone on the border of the Sultanate of Oman and Yemen makes it the Gulf gateway for transit trade to Yemen and Eastern Africa. To enhance the opportunities of the Al Mazunah Free Zone, the government has developed a package of incentives and facilities to encourage investors and facilitate the investment process. These incentives include exemption of profits from income tax and no need for income declaration, permit to import all eligible goods into the zone, and exemption from the requirement of a minimum investment.
Al Hasani added, "In spite of the ongoing security and political conditions in Yemen, the Al Mazunah Free Zone could attract more than 10 Arab companies to invest in the zone in 2015.
There are currently 41 companies operating in the Al Mazunah Free Zone. There are more applications under study and we hope we will sign up with them in the coming months.
Moreover, the number of vehicles and machinery exported from the Al Mazunah Free Zone to Yemen exceeded 5,300 in 2015, and more than 1,600 tons of different goods. It has been noted that there was growth in the commercial traffic during the period from 2012 to 2015. It is hoped that the first factory in the zone will commence the production process before the end of the first half of this year.”
The incubated companies at the National Business Centre, which fall under the umbrella of PEIE, has generated financial returns estimated at OMR1.3 million. "Today, 29 companies are incubated in NBC and Riyada, with the occupancy rate exceeding 71 per cent. These companies have succeeded in providing 74 job opportunities," the CEO of PEIE noted.
In 2015, the National Business Centre organised 10 events as part of various initiatives targeting different segments of entrepreneurs, including a series of events that marked the Global Entrepreneurship Week (GEW) that were organised by NBC for the third consecutive year in cooperation with a number of local institutions that support entrepreneurship. NBC is an initiative launched by PEIE at the Knowledge Oasis Muscat (KOM) to offer promising Omani entrepreneurs a platform for developing their business ideas and advancing them into growing ventures. The centre offers a premier platform for Omani entrepreneurs by providing business development support and guidance, training and mentoring, access to markets and industry experts, and state-of-the-art and fully equipped office space, meeting rooms and presentation facilities.
Significant efforts are being made by PEIE’s Directorate General of Marketing and Media to promote the industrial estates among various segments. "In 2015, several seminars and workshops were organised to highlight various aspects, including branding and marketing; sustainable manufacturing; big data; and technologies for differently able people. In addition, a meeting was hosted by PEIE for commercial attachés’ representatives in the Sultanate that was aimed at underlining the existing investment opportunities in various industrial estates, which fall under the umbrella of PEIE in different governorates, and the value added services provided by PEIE in collaboration with government and private bodies in Oman. Being a partner of the INCONET-GCC2 project, PEIE also hosted an Info Day to generate awareness about Horizon 2020 (H2020), which underscored the international dimension and opportunities offered by ‘Horizon 2020,’ the biggest European Research and Innovation funding programme," Al Hasani said.
He also added that an online service, which was recently launched by PEIE on its website www.peie.om, will provide an interactive interface linking PEIE’s staff with existing and potential investors, and business owners.
"The Live Chat service aims to answer enquiries, provide assistance, and welcome suggestions, among other services. This service also aspires to strengthen relations with our existing and potential investors through a direct interaction with them and eventually these relations shall grow further to become actual investments on the ground," Al Hasani stressed.
Origin Oman Campaign
The campaign has continued its efforts inside and outside the Sultanate to support locally manufactured products and motivate consumers, individuals or institutions, and encourage people to buy Omani products.
"PEIE participated in various events, including Gulfood 2015 in Dubai, the International Embassies Bazaar in Bahrain, Expo Halal in Spain, Omani Companies’ Exhibition in Ahvaz—Iran, SIAL Exhibition in Indonesia, as well as in an exhibition organised as part of cultural and tourism events in Geneva on the occasion of 45th National Day. Additionally, OPEX 2015 was organised in Jeddah, Saudi Arabia in cooperation with the Public Authority for Investment Promotion and Export Development (Ithraa), and the Oman Chamber of Commerce and Industry (OCCI). In the Sultanate, PEIE organised and took part in 15 exhibitions and events to disseminate awareness on the significance of supporting Omani products and its direct contribution to the advancement of the national economy," he said.
Training and innovation
PEIE accords prime importance to training activities to expand the knowledge and skills of its human cadres to ensure outstanding quality of performance.
"Through its Human Resources Development Centre, PEIE has continued its efforts to develop its national human cadres in the companies and factories based in the various industrial estates. The centre offers a line-up of management and technical, lectures and awareness programmes. During the last five years, nearly 2,600 Omani employees have benefited from these activities," Al Hasani stated.
Industrial Innovation Centre (IIC), which was established in the Rusayl Industrial Estate in 2010 as a government organisation parented by The Research Council and PEIE, is also continuing with its efforts to develop and assist industrial progression through Research and Development (R&D).
Talking about the achievements of IIC, Al Hasani said, "Since its inception, IIC has organised more than 150 visits to Omani factories throughout the Sultanate’s governorates. Additionally, IIC financed 25 projects, of which 23 have been completed at a total value of OMR1,446,216, where the centre contributed with more than 30 per cent. In addition, the centre has signed several MoUs with various organisations to cooperate in certain areas, including with the Information Technology Authority and Ministry of Agriculture and Fisheries. Besides, the centre also plays a pivotal role in assisting SMEs in the area of innovation and research."