Sohar Port delivers robust growth in 2017

Despite volatility in the global maritime sector, Sohar Port and Freezone once again posted a year of consistent growth with an average of over one million tonnes of cargo handled by the port every week in 2017. Container traffic was up by 36 per cent compared to 2016, dry bulk throughput increased by 25 per cent year-on-year. Sohar Port received 3,075 vessel calls in 2017, marking a significant increase of 17 per cent, despite the continued global trend towards consolidation and larger ships. Details about the port and free zone’s stellar 2017 performance were revealed at Sohar Port’s annual Business Reception at The Chedi in Muscat last week.
One of the major highlights for Sohar Port in 2017 was the establishment of a 40-hectare food cluster at the port which will include a major flour mill, a world-class sugar refinery, and a grain silo complex. The former, operated by Sohar Flour Mills will have a capacity of 500 tonnes per day, while the planned sugar refinery, owned and operated by the Oman Sugar Refinery Company, will boast a production capacity of one-million tonnes per annum. Suhar now operates a terminal at the port dedicated exclusively for the food cluster.
“We are pleased to report another year of solid growth for Sohar Port and Freezone. In 2017 we focused strongly on the food sector and were able to attract significant public and private sector investments to the cluster. Our focus on this field enabled us to capture a larger slice of the food products cargo trade in the region,” said Mark Geilenkirchen, Chief Executive Officer of Sohar Port and Freezone. “This is aided by the steady growth in aggregate cargo volumes and investments at the port, such as the upcoming port Sohar Port South expansion, which is set to deliver additional cargo capacity and attract significantly more business.”
Sohar Port South: Launched in 2017 and now nearing completion, the Sohar Port South expansion will add new deep-water berths and a further 200 hectares of land to Sohar’s present capacity of around 2,000 hectares. Given its proximity to the bustling petrochemicals cluster, the expansion will be earmarked almost exclusively for oil and gas-based investment. Sohar Port and Freezone also witnessed a number of milestones in 2017, the most significant of which was the signing with India’s Pittie Group, one of the biggest cotton yarn manufacturers in the world, for a $300 million cotton yarn project. The project, when completed, will produce 100,000 tonnes of cotton yarn per year and generate over 1,500 sustainable jobs in the free zone.
“Another major project was for the production of antimony, a mineral which is primarily used as a fire-retardant. In total around 26 companies are already reaping the benefits of unrivalled access to land, low-cost energy, and skilled workforce in the region,” said Jamal Aziz, Chief Executive Officer, Sohar Freezone. Industries already located at Sohar Port and Freezone are also expanding with Oman Oil Refineries and Petroleum Industries (Orpic) boosting refinery capacity, from 120,000 to 180,000 barrels per day; while Gulf Mining are constructing five ferrochrome smelters to boost metals output.
“Investment in the smelter is part of a push to grow our metals cluster; to complement and support iron and aluminium industries at Sohar Port and Freezone. The metals cluster at Sohar is one of the fastest growing, with a high economic yield. Studies indicate iron industries and their derivatives have experienced exceptional growth as they continue to strive to meet demand,” says Aziz.
“Looking ahead, a $60 million deal with a UK-led consortium will see Sohar Port and Freezone houses the largest rare earth metal plant of its kind outside of China. Plus, agreements with two of Oman’s biggest business houses will see an annual assembly within the free zone of 200,000 vehicles from some of the world’s leading automotive brands.”
Bitumen refinery: Another new addition to Sohar Port in 2018 is Oman’s first bitumen refinery, a new plant that will significantly reduce the reliance imports of bitumen and asphalt for road paving and industrial applications. Taking advantage of the growing local and global market for asphalt and bitumen, the project will create new business opportunities and employment in Oman with 34 direct jobs for citizens generated in the first phase of operations.
According to market projections, the capacity of phase 1 will be around 1.6 million tonnes per annum, with 35 per cent allocated to the Omani market, 35 per cent exported to GCC countries and 30 per cent destined for the international market. The plant is backed by Sohar Asphalt LLC, an Oman-registered company who are investing $386 million in the new venture.
Mark Geilenkirchen mentions that growth from within the Freezone also plays a significant role in the growth of port operations. As the number of resident businesses increase, so to do cargo volumes. “Additionally, we are promoting the consolidation of shipping cargo for smaller players in the Freezone, many of whom currently transport their cargo overland to other port destinations in the region. Providing more practical options for clients to consolidate their cargo reduces unnecessary handling and delays, and helps to increase cargo volumes,” he said.
Looking ahead at 2018, Sohar Port and Freezone is promoting the theme of ‘Smarter Thinking’, streamlining operations and improving efficiencies. “We work closely with our colleagues at the Port of Rotterdam in the areas of new logistics strategies and adopting the latest technologies. At Sohar Port and Freezone, we pride ourselves in promoting a ‘Smarter Thinking’ culture, one that ensures that innovative ideas are freely shared and championed,” says Geilenkirchen.