FDI in Oman's manufacturing sector topsOMR2bn

Times of Oman

08-02-2025

Muscat: The contribution of industrial activities to the gross domestic product (GDP) at current prices achieved a remarkable growth, reaching OMR6.09 billion by the end of September 2024, marking an increase of 5.4% compared to the same period last year when it was OMR5.7 billion. This growth is attributed to an 8.5% increase in the output of the manufacturing sector, reaching OMR2.686 billion by the end of September 2024 at constant prices.
Dr. Masan affirmed that special economic zones, free zones, and industrial cities across Oman are attracting significant interest from investors. There is an increased focus on implementing infrastructure projects to attract investments, developing legislation, and promoting investment opportunities. He noted that foreign direct investment (FDI) in the manufacturing sector reached OMR2.13 billion by the end of third quarter of 2024, achieving a growth rate of 51.9% compared to the same period in 2023.
This was stated by Dr. Saleh bin Saeed Masan, Undersecretary of the Ministry of Commerce, Industry, and Investment Promotion for Commerce and Industry, on the occasion of the celebration of Omani Industry Day. The day embodies the partnership between the public and private sectors by discussing challenges faced by industrial establishments and providing solutions, creating a suitable industrial environment for investment, and keeping pace with the Fourth Industrial Revolution and future industries.
During this year's event Oman, represented by the Ministry of Commerce, Industry, and Investment Promotion, will celebrate Omani Industry Day on Sunday. The event will be held under the patronage of His Highness Dr. Fahd bin Al Jalanda Al Said, President of Sultan Qaboos University.
The celebration is part of ongoing efforts to enhance Oman's industrial sector. This year's Omani Industry Day will focus on supply chains and the role of local content in localising supply chains. It will also address the importance of local content in logistics services, its role in boosting the industrial sector, and opportunities to enhance local content in logistics services related to manufacturing, innovation, and technology in local logistics. The goal is to develop the national economy, diversify income sources, achieve industrial integration, and enhance the production of goods.
Dr. Masan further emphasised Oman's efforts to build a strong industrial future in line with its aspirations. Over the past five years, significant achievements have been made in the industrial sector, including the royal blessing of the Industrial Strategy 2040 in May 2024. The Ministry organised several discussion sessions involving all stakeholders to begin implementing the initiatives of the Industrial Strategy 2040.
He added that the Ministry's plans focus on increasing the industrial sector's contribution to the GDP and providing job opportunities for citizens. Various initiatives have been launched in recent years to develop the industrial sector and increase its contribution to the GDP. Indicators show that the industrial sector is playing an increasingly important role in Oman's economy, with industrial activities contributing 19.5% to the GDP at current prices and the manufacturing sector contributing 10% to the GDP. This reflects the effectiveness of the government's developmental plans, which aim to enhance production capacities and stimulate investments.
His Excellency pointed out the industrial sector's achievements in 2024 and the efforts made to develop and stimulate the sector and increase its contribution to the GDP. Among these achievements are the royal blessing of the Industrial Strategy 2040 in May 2024 and Oman ranking 53rd globally and 4th regionally in the 2024 Industrial Competitive Performance Report issued by the United Nations Industrial Development Organisation (UNIDO).
He further added that these achievements included the launch of the Omani Product Identity and Oman Barcoding Centre, as well as the commercial identity. Additionally, a number of advanced technology investments were attracted, and programs were started for factory automation and enhancing supply chains.
The Undersecretary of the Ministry of Commerce, Industry, and Investment Promotion for Commerce and Industry, stated that Oman is working on upgrading manufacturing industries to advanced technology and developing innovative products. The country is also implementing a range of policies and legislation aimed at enhancing the competitiveness of national products in local and international markets.
He explained that the "Local Content Plan in the Industrial Sector" was launched under the name "Tasee'ir," along with the "Ta'meer" programme for major projects, and the "Itqan" programme, which aims to empower national competencies in the industrial field.
Mazen bin Hamid Al Siyabi, Assistant Director General of Industry at the Ministry of Commerce, Industry, and Investment Promotion, said that this year's Industry Day celebration focuses on the importance of supply chains and the role of local content in localising supply chains.
He emphasised the importance of local content in logistics services and its role in enhancing the industrial sector, as well as opportunities to enhance local content in logistics services related to manufacturing.
He stressed the importance of supply chain and logistics management, including knowledge of the movement and storage of goods, the plan for distributing goods and services across the global network, reducing waste, improving operational efficiency, reducing overall costs, and attracting customers by providing excellent service.
He pointed out that the number of industrial licenses issued from January to November 2024 reached 84,116 licences, while 697 applications for customs exemptions were submitted during the same period. A total of 569 electronic customs exemptions were issued, along with 4,466 exemptions from customs duties for machinery and equipment. He added that 363 certificates of identity for Omani products were issued by January 2025, and 20 Omani factories were assessed using the Smart Industry Readiness Index.
He explained that the 2025 Industry Day celebration under the name "Supply Chains" comes due to the importance of managing them because of the continuous innovation in technology and rapidly changing customer expectations. He noted that the success and competitiveness of organisations have become dependent on effective supply chain management in alignment with the changing environment and technology.
He highlighted that supply chains represent a connected network of individuals, organisations, resources, activities, and technologies involved in the manufacture and sale of a product or service. It begins with the delivery of raw materials from the supplier to the manufacturer and ends with the delivery of the final product or service to the consumer. In other words, it represents the steps taken by organisations to deliver the product or service from its original state to the end customer.
The Assistant Director General of Industry pointed out that organisations periodically develop supply chains to reduce costs and ensure their competitiveness in business. Supply chain management tasks include planning and executing the movement of raw materials, capital, and information, determining sources of raw materials, managing inventory and storage, dividing products, and handling returns or defective items.
He confirmed that improving the manufacturing process is one of the most important tasks of supply chain management (SCM). It starts with raw materials, moves through production and logistics, and ends with delivery to the customer. He added that supply chain management provides many benefits that translate into higher profits, a better brand image, and a greater competitive advantage, such as risk management and market demand forecasting, increased sustainability from a societal and environmental perspective, improved cash flow, and more efficient logistics services.
He explained that the supply chain management process consists of five main elements: plan or strategy, supplier, manufacturing, delivery, and returns. He stressed the importance of supply chain management in enhancing customer service, reducing operating costs, improving the organization's financial position, ensuring efficiency, and improving quality.
He said that the latest data from the National Centre for Statistics and Information indicate that the trade balance increased by the end of November 2024, reaching OMR37.312 billion, an increase of 8.86% compared to the same period in 2023. This is due to a 7.7% increase in merchandise exports, reaching OMR22.225 billion, and a 10.6% increase in merchandise imports, reaching OMR15.087 billion. Additionally, the trade balance recorded a surplus of OMR7.137 billion, an increase of 2% compared to the same period in 2023.
Eng. Jassim bin Saif Al Judaidi, Technical Director of the Office of the Undersecretary of the Ministry of Commerce, Industry, and Investment Promotion for Commerce and Industry, praised the positive performance of the trade balance, which increased by 31%, and the growth of the trade balance surplus by 52.5% since the beginning of the Tenth Five-Year Plan (2021-2025). This reflects the success of the economic policies adopted by Oman under Oman Vision 2040, contributing to the enhancement of non-oil economic sectors, increased productivity, and attracting investments to support sustainable economic growth.
He confirmed the continued governmental efforts in developing economic infrastructure and improving the business environment, which enhances productivity levels, increases the efficiency of economic sectors, and stimulates innovation and entrepreneurship, ultimately enhancing financial and economic stability in the long term to achieve strong and balanced growth rates supporting social and economic progress.
Tawfiq bin Abdul Hussein bin Jumaa Al Lawati, Chairman of the Industry Committee at the Oman Chamber of Commerce and Industry, said that the celebration of Omani Industry Day reflects the prominent position held by the industrial sector in the national economy. The industrial sector is relied upon to achieve comprehensive development in Oman, as other economic sectors revolve around and integrate with it.
He added that Omani Industry Day is of great importance as it honors industrialists in Oman and recognizes their role in supporting the diversity of the national economy, expanding the productivity base, and enhancing local products both domestically and internationally. This day provides an opportunity to closely examine the latest developments in Oman's industrial sector, explore industrialists' visions on ways to develop and empower the sector, and identify the main challenges facing Oman's industry. It also discusses solutions and proposals to develop the industrial sector, addressing key problems and issues faced by the sector and investors.
He pointed out that there are many incentives and facilities provided by the government to support the industrial sector, such as incentives in industrial areas, efforts to attract foreign investment, and exemptions. Additionally, several initiatives, like the local content enhancement policy, work on increasing connections between commercial entities and factories and empowering small and medium enterprises (SMEs) by enhancing the production of goods and providing locally delivered services. This also includes increasing Oman's manufacturing capacity, achieving industrial integration, and developing the skills and capabilities of the national workforce.
Sheikh Dr. Hilal bin Abdullah Al Hinai, Chairman of the Board of Directors of the Omani Industrialists Association, stated that Omani Industry Day is an occasion to honor the efforts made in developing the industrial sector and highlighting its achievements that contribute to diversifying the national economy. He confirmed that the sector is witnessing significant growth and increasingly contributing to the GDP.
He pointed out that the Fourth Industrial Revolution imposes radical transformations on the global industrial sector. Adopting these technologies can enhance production efficiency and reduce costs. He confirmed that, according to the Omani Industrialists Association, 70% of local industrial companies have obtained international quality certifications like ISO, reflecting their commitment to high-quality standards. He added that competitiveness can be enhanced through effective marketing and expanding export markets to regional and international markets.
He proposed increasing support for SMEs, which make up about 90% of the total industrial establishments in Oman. Encouraging innovation and enhancing partnerships between the public and private sectors can yield positive results. Additionally, developing logistical infrastructure and facilitating investment procedures can attract more investors, especially given the presence of industrial areas across different governorates in Oman.
He confirmed that local content plays a vital role in localizing supply chains by increasing reliance on local suppliers and reducing costs associated with imports. According to the Public Authority for Industrial Estates data, the local content percentage in some key industries reached 30% in 2023, with plans to increase it to 50% by 2030.
He added that the association significantly contributes to developing the industrial sector by representing industrialists' interests, providing consultations and technical support, and organizing events that enhance communication between companies and government institutions. The association also works to strengthen cooperation between the public and private sectors to achieve industrial development goals. – With inputs from ONA