This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/29/2018

Overview
A sizeable market exists in the transportation and logistics sectors in Oman with the government focus on economic diversification. The Oman Logistics Strategy lays out long-term objectives for increasing the contribution of the logistics sector to GDP. Strategic objectives over the past few years have been focused on easing congestion and enhancing capacity by investing in infrastructure and technology for the upgrade of ports, airport facilities, and new road links. Consolidating its infrastructure and improving the ease of doing business will prove crucial for Oman in competing with other Gulf ports.

Duqm is Oman’s flagship development project. The new city being built in the interior of Oman will eventually include: a new port; naval base; dry dock; fisheries hub; industrial free zone; hotels; power and desalination plants; a refinery; a 250km pipeline network from interior oil fields; liquid jetty; and an oil tank storage terminal. The government also aspires to build a local rail line, which is expected to facilitate the transfer of mineral resources from the Shweimiyah area in the Dhofar governorate to the Port of Duqm.

Road construction is another major focus of domestic and regional development, as evidenced by the new road connecting Oman and Saudi Arabia. There is also a drive to improve the public transport infrastructure in Oman through the addition of a limited bus system and a government-run taxi service. Oman imports vehicles for domestic sales and for re-exports to regional markets. In 2017, U.S. exports of new passenger vehicles reached USD 216.5 million, one of the U.S. top-20 export markets. This trend is expected to continue despite the decline in sales of vehicles in Oman due to the economic conditions in the last few years.

The new Muscat International Airport opened in March 2018 and U.S. contractor Bechtel played an important role in its construction. The Sultanate’s flag carrier, Oman Air, is exploring direct flights to the United States as part of a general strategy to expand routes and designations. Oman Air remains a key export market for Boeing and the airline has chosen to replace its aging fleet with Boeing aircraft. Oman’s first budget airline, Salam Air, launched operations in 2016 and is already looking at expanding its regional routes.

The government anticipates a larger role for the private sector in the future, not only in providing capital, but also in tie-ups with the public sector to help manage state assets. One significant change in the sector’s organization in recent years has been the formation of two large holding companies, Oman Aviation Group and Asyad. The move, which brought both under the Ministry of Transport and Communications, is aimed at streamlining and improving coordination between the various entities.

Leading Sub-Sectors
In addition to a continuing market for passenger vehicles, Oman is importing construction, airport, and port equipment including buses, aircraft, X-ray security screening equipment, cranes, rubber tire gantries, port access control and security solutions, logistics software, and engineering, project management, and consultancy services.

Opportunities
Oman’s strategic location will serve it increasingly well as its logistics infrastructure grows and connectivity improves. The challenge in the short term will be financing amid budget constraints and oil price uncertainty. Many large infrastructure projects are currently on hold or delayed.

The Special Economic Zone Authority for Duqm (SEZAD) and the Port of Duqm are actively seeking foreign investment to help finance development.  In addition to the massive array of construction projects, the new city requires infrastructure development in sewage treatment, drainage, water desalination, power plants, buildings, telecommunication services, and landscaping.

Oman’s two established ports in Sohar and Salalah also present significant opportunities.  Sohar’s free zone has been at the forefront of Oman's downstream manufacturing boom. The industrial zone is seeking to attract additional manufacturing companies to establish facilities or distribution centers. Sohar also hosts Oman's largest oil refinery, and it is in the process of a USD 1.5 billion expansion to add another 60,000 barrels to its current 116,400 bpd capacity. Salalah is in a prime location at the crossroads of East-West shipping and boasts the fastest transit times between Europe and Asia.

Oman is increasingly looking to the private sector for investment and expertise, particularly to develop its projects pipeline through joint ventures or public-private partnerships, such as Khazaen Logistics City; to run the four terminals for containers, general cargo, bulk goods, and liquids being developed at Port of Duqm; and in the developments of ports at Khasab and Shinas located in the north of the Sultanate. Port Sultan Qaboos, from where the commercial port operations shifted to Sohar Port, is being transformed into a mixed-use waterfront cruise and leisure destination.

The country’s airline industry also experienced significant changes in 2018 with the opening of the new international airport in Muscat. Opening access to new tourism and business markets is likely to be key to maintaining growth. The replacement of aging aircraft and the addition of new routes provide opportunities for U.S. aerospace companies.

Web Resources
ASYAD
Ministry of Transport and Communications
Port of Salalah
Port of Duqm
Sohar Port and Freezone
Oman Rail
Oman Air
GCC Supply Chain & Logistics Expo 2018
 

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