• January 27, 2019

SOHAR Port and Freezone Looks Forward to Further Growth After 15 Years of Excellence

  •  Another year of significant growth and major projects in the upcoming year
  • SOHAR signed multiple agreements for upcoming projects

SOHAR Port and Freezone commenced the year of its 15th anniversary with its annual Business Reception held at The Chedi Muscat on Wednesday, January 23. During the event, SOHAR revealed its operating results for 2018, looked back over its 15 years of double digit growth and entered into new partnership agreements signalling a strong start to 2019. The event was attended by members of the management team, alongside SOHAR employees, strategic partners and valued customers.

In 2018, SOHAR witnessed yet another year of consistent growth with an average of 1.2 million tonnes of cargo handled by the port every week in 2018, and has also set new records in both vessel calls and cargo throughput. Dry bulk and liquid bulk throughput increased by 14% as compared to 2017 and SOHAR received 3,464 vessel calls in 2018, marking a significant increase of more than 12%.
Signalling a positive start to 2019, SOHAR did not wait to ensure that new partnerships were forged and growth at the Port and Freezone continued. SOHAR entered into two partnership agreements, the first was with Mannesmann and the second with Oman Maritime Waste Treatment.

The collaboration with Mannesmann will see the creation of Calcined Petroleum Coke (CPC) and Recarburizer Calcined Coke (RPC) plants on 30ha of land at the Port. This is one the first projects that will be built in the reclaimed area of the Port, and will add value to both the aluminium and steel industries within SOHAR.

The agreement with Oman Maritime Water Treatment, which is a joint venture between Khimji Ramdas LLC in Oman, Ramky Enviro Engineers Limited in India and Nature Group of the Netherlands, will see the construction of a full-fledged International Protocol of Marine Pollution (MARPOL) compliant facility at the Port. This is done to ensure that ship waste collection and disposal are carried out in compliance with MARPOL. As of January 2018, all countries that are signatories to MARPOL must adhere to its requirements.

SOHAR also signed an agreement to replace its existing tug boats. According to the agreement, five existing vessels that provide towage services for all the vessels entering and exiting the port safely and in an efficient way, will be replaced. The scope of the contract entails the supply, manning, management, operation and maintenance of the five tugboats based on 24 hour operations. The contract will have a duration period of 15 years, and delivery of the first tugboats is expected on the 1st of August 2020.

Over the past year, SOHAR did not only witness capacity growth, but the Port itself grew in size owing to the SOHAR Port South expansion. In 2018, 50 hectares of land was added to the current capacity of 2,000 hectares in the first phase of the expansion and a further 200 hectares will be added in subsequent phases.

“Earlier this year, we signed an agreement with Dredging International NV for the development of the first phase of SOHAR Port South,” Mark Geilenkirchen noted. “This expansion is vital for SOHAR and has been steered by our rapid growth; it will be assigned almost exclusively for oil and gas-based investments. The SOHAR Port South Development will lead us to an increase in trade flows to the Sultanate and will encourage shipping lines to make more direct calls to the Port, thus opening the doors of opportunity to a larger group of potential customers in the future. The additional land area will significantly boost our ability to handle greater volumes of cargo traffic and simultaneously create new and sustainable jobs in SOHAR.”

“An achievement I would very much like to highlight is our partnership with Marafi Sohar for the creation and operation of new high-capacity mineral aggregate terminal at the Port. The new development is expected to generate more market opportunities since SOHAR is ideally equipped to develop high-capacity aggregate facilities, especially when you consider most of the quarries producing mineral aggregate are in close proximity to the port. As a result, we can provide easy access for export, which is a great opportunity for development,” Mark added.

Apart from fuel products, the refinery in SOHAR also produces significant volumes of naphtha and propylene, which serve as feedstock for an adjoining aromatics and polypropylene plant. The deep-water berths allow for raw materials such as iron ore to be easily received, ensuring smooth primary and secondary production processes.

“The Food Cluster at SOHAR has arguably been one of our most prominent projects, especially given the massive potential of the food industry, both in upstream and downstream businesses. This project will drive further integration between the port and free zone complex. The aim of this cluster is to promote the entire value chain of food processing and logistics support within the expanding multibillion-dollar regional food industry. In addition to the new flour mill and grain silo complex, the SOHAR food cluster will also house a sugar refinery, with packaging and distribution facilities planned in the future. The cluster will enable us to attract significant business in the coming years and is complemented by a dedicated deep-water berth and agro-terminal for the fast and efficient movement of foodstuffs within the Port,” Mark Geilenkirchen added.

Commenting on the growth in the Freezone, Jamal Aziz states, “The increase in businesses plays a significant role in Port development. The number of cargo volumes directly tie in with the various investments that are currently present at SOHAR Port and Freezone. The Freezone hosts a multitude of companies not only from Oman, but also from the GCC, the Indian sub-continent, Asia and Europe. These exceptional companies are experienced in the industrial and logistics sectors, and have established a competitive advantage in SOHAR by offering lower operating costs, energy-saving systems, and providing quick and easy land lease options, which include pre-built warehouses and commercial offices. Moreover, all our tenants can avail of our One-Stop-Shop approach, which provides a simplified method of setting up businesses, and our unique feature of hosting an entire supply chain in a single easily accessible area.”

“Additionally, we are also promoting the consolidation of shipping cargo for smaller players in the Freezone, many of whom currently transport their cargo over land to other port destinations in the region. Providing more practical options for cargo consolidation reduces unnecessary delays and helps increase cargo volumes. Our much larger upcoming projects include new ferrochrome smelters that are under construction in the Freezone. This will be accompanied by the second biggest antimony plant of its kind in the world, and the creation of the SOHAR Cotton Cluster. SOHAR has also recently concluded an agreement for the creation of a petroleum coke calciner plant in the Freezone, where raw petroleum coke will be used as feedstock for downstream petrochemical industries," Jamal Aziz concluded.

SOHAR continues to adapt, staying abreast of the latest developments and creating innovative ways to maximise efficiency and utilise cleaner energy. With many upcoming projects, investments and potential business opportunities, SOHAR has set its focus on the implementation of better, smarter solutions for the benefit of the community, the nation and all its citizens.