INDUSTRY SPINOFF: Gulf region’s maiden cotton yarn project set to unleash robust investment and
employment generation in a new economic sector centring on Sohar Freezone –
A greenfield textile industry is set to take root in Oman with the potential to replicate the success of the flourishing textile hubs of India, Germany, China and Italy, amongst others, here at Sohar Freezone in the Sultanate.
The cornerstone for this promising economic sector is being laid by India’s ShriVallabh Pittie Group (SVP), a global leader in the manufacturer of cotton yarn — the raw material for textiles. The Group’s Oman subsidiary, SV Pittie Sohar Textiles FZC LLC, is preparing to launch work on its $300 million cotton yarn project on a 27-hectare site at the free zone adjoining the Port of Sohar — an investment that has the potential to ignite the growth of a wider textile cluster over the long term.
“The SVP Group is investing in the fundamental building block of what will inevitably evolve into a major textile hub in Sohar Freezone. With a cotton yarn plant in place, the potential for upstream, downstream, forward and backward integration is huge, and so is the opportunity for employment generation. Entire cities have sprung up in India, China, UK and the US, among other countries, on the back of textile industries,” said Vinod Pittie (pictured), Chairman of ShriVallabh Pittie Group.
Vinod Pittie oversees a 120-year-old yarn manufacturing conglomerate that is ranked among the largest in India. The Group operates a complex of state-of-the-art plants in the northwest Indian state of Gujarat, as well as a trio of traditional spinning mills in the south of the country. Total capacity is projected to double with the installation of 300,000 spindles and 7000 rotors at its upcoming facility in Oman.
Significantly, the Sohar Freezone project represents the Group’s first-ever investment outside of India — a move that attests to Oman’s strengths as an investment and logistics-friendly destination, says Pittie.
“This is probably the first project of its kind in the world to be set up in a location that neither offer the basic raw material nor is a destination for the end product. Usually, it is either one or both criteria that are a prerequisite. The fact that we are investing in Suhar, where all of the raw cotton has to be imported, and from where all of the yarn has to be exported, is a testament to the logistical advantages it offers, as well as the wider investment appeal of Oman. Besides, Sohar Freezone has well-developed infrastructure and is located not far from Dubai as well.”
Credit also goes to the cordiality and friendliness that he encountered during his exploratory visits to the Sultanate, according to the Chairman. “During my evaluations of potential locations for the project, I found that the economic advantages were broadly similar across the GCC states. But Oman stood out for the warmth of its officials and people, and the chemistry they share with us.”
Helping clinch the deal in Suhar’s favour was a high-level visit led by Sultan bin Salim al Habsi, Chairman of Port of Sohar and also Secretary-General of the Supreme Council for Planning, to India last September. “I was delighted to receive him and his delegation at our state-of-the-art plant in Jhalavar — Rajasthan and to introduce him to the kind of project that we intend to develop in Sohar Freezone.”
Technology-wise, the Suhar project is set to be high-tech, said Pittie. “We have just completed one of the world’s most modern compact yarn projects in India, but our new project in Suhar will the world’s most modern automated plant. Full automation will contribution to the production of a finer count of yarn and cost savings in the form of reduced energy consumption and lower manpower requirements.
Machinery and equipment will be primarily procured from Germany.”
Raw cotton as raw material for the project will be sourced from the United States, Australia and India depending upon the grades of yarn required to be produced and the targeted markets internationally. Exports of compact yarn — the basic ingredient in the manufacture of textiles and fabric — will cover key textile manufacturing countries, notably China, Bangladesh, Pakistan and other European markets.
As the first cotton yarn project in the Gulf region, Pittie envisions significant potential for the growth of a textile based cluster taking shape in Sohar Freezone. “The presence of a spinning project automatically spawns the grown of a wider textile industry around it. Industries like weaving, garment-making and other investments across the value chain will start coming to Sohar. It won’t be surprising to see, say in 3 — 5 years’ time, investments of around $1 billion materializing in the textile cluster at Sohar.”
Sohar Freezone is understood to have earmarked ample land for the development of a textile hub adjoining the industrial port. The Pittie Group, for its part, does not foresee any new investment, beyond its $300 greenfield cotton yarn project, in the wider textile hub at Sohar. It has pledged, nevertheless, to encourage textile and fabric manufacturers to look at Sohar for their investment and expansion plans, now that the region’s first modern cotton yarn project is under development there.
There will be interesting spinoffs for the Port of Sohar as well. Imports and exports linked to the project will generate in excess of 5,000 containers in annual traffic through the Container Terminal.
Longer term, Pittie foresees the potential for its high-quality compact yarn to spur the growth of textile mills in the wider Gulf and Middle East region. With the Gulf states importing almost of its requirements of textiles and fabrics, the availability of cotton yarn in the neighbourhood will incentivise investments in textile plants in the region, he explains.
Oman’s maiden investment in the textile sector also comes against a backdrop of strong global demand for cotton yarn, according to the industry veteran. The global market for textile fibres is projected to reach around 124 million tons by 2022, driven by the development and launch of innovative blends of textile fibres and yarns, expanding applications and burgeoning demand in emerging countries. In value terms, this translates to $156 billion in 2022, up from $126 billion presently.
The textile sector is also a labour-intensive industry, employing around 45 million people — directly and indirectly — in India alone – the second largest employer after agriculture. The sector has since evolved into a $180 billion industry in value terms.
Conrad Prabhu –
MUSCAT, JAN 23 –