Chinese firm to start work on $84m auto unit in Duqm within two months

Duqm/Muscat: Wuhan Xiao Long Automotive Technologies Co. Ltd, which signed a land lease agreement with Oman Wanfang last week, plans to start work on a high-mobility special utility vehicle (SUV) project in Duqm free zone within two months. The company plans to design the plant before starting construction of the first phase, which will have a capital expenditure of $84 million.
The Chinese company last week signed a land lease (sub-usufruct) deal with Oman Wanfang, which is managing 1,172 hectares of land for developing a major China-Oman industrial zone in Duqm.
Wuhan Xiao also started discussions with Oman-based investment funds to attract investment for building the automobile unit as a joint venture project. “Two levels of discussions with investment funds have already been completed,” said a senior official of the company.
Lee Chee Khian, chief executive officer of Special Economic Zone Authority, Duqm, said that the company plans to produce 10,000 units per annum – 9,000 units for civil use and 1,000 for military use – in the first phase. These all-terrain vehicles, which have heavy loading capability, are used by military, UN peace-keeping force as well as in oil fields and mining sector.
These vehicles are also used during natural calamities for emergency purposes. “The vehicle has several special features and heavy loading capability,” noted the company official.
The Chinese company has already conducted three levels of feasibility study. “Our next step is to do the design work of the manufacturing plant.” The Duqm plant will not be just an assembling unit, rather automobile spare parts for the plant will be manufactured there. Plans also afoot to build an electro-mechanical industrial unit to support the whole venture in the second phase.
A major chunk of the vehicles produced in Duqm will be for export to the Gulf region and African markets since Oman market for such vehicles is limited.
Strategic location
The strategic location of Duqm port and tax incentives offered by Oman government in free zones are advantages for the specialised vehicle manufacturer to export its products to the larger Middle East region. Apart from Wuhan Xiao, nine Chinese firms last week signed land lease agreements with Oman Wanfang LLC for building various projects, ranging from a methanol venture to a five-star hotel, totaling an investment of $3.06 billion. Oman Wanfang, which is a consortium of six Chinese private firms, will develop and attract direct foreign investment from China for building a host of light, medium and heavy industries and tourism projects.
Wanfang, which is a consortium of six Chinese private firms, will develop, manage and attract direct foreign investment from China for building a host of light, medium and heavy industries and tourism projects.