$100m chemicals project to boost downstream industry in Salalah

MUSCAT: A new $100 million chemicals investment in the Salalah Free Zone, backed by a local subsidiary of India’s Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL), is set to drive the growth of a chemicals-based industrial ecosystem in Oman’s Dhofar Governorate.
Last week, Deepak Oman Industries LLC (SFZ) — a subsidiary of the Pune-based, publicly listed DFPCL — signed an agreement with OQ Base Industries (SFZ) SAOG (OQBI), a subsidiary of OQ Group, for the long-term offtake of ammonia from the latter’s integrated petrochemicals complex in the Salalah Free Zone.
The agreement secures Deepak Oman Industries a supply of ammonia for a ten-year renewable period, enabling the establishment of a new plant within the Free Zone to produce sodium nitrite and sodium nitrate with an investment of around $100 million. The plant, with a production capacity of approximately 70,000 tonnes per year, will market its output to pharmaceutical and specialised fertiliser industries.
Significantly, the investment introduces specialised chemical manufacturing into Oman’s industrial system, according to Ali al Lawati, Chief People & Technology Officer at OQ and Chairman of the Board of OQ Base Industries.
“By connecting this facility directly to OQ Base Industries’ ammonia production in Salalah, a higher-value segment of the chemical chain is now anchored within the country rather than remaining external to it”, Al Lawati said in a post.
“Within this framework, OQ’s integrated ecosystem acts as a unified industrial platform, aligning feedstock, logistics, infrastructure and industrial land to reduce risk, secure supply and enable downstream manufacturing to scale with confidence”, he added.
According to the official, the Salalah project is projected to generate about 150 direct employment opportunities, fostering specialised skills development in Salalah while strengthening the foundation for further downstream industries, greater SME participation and more resilient domestic supply chains.
Earlier, in a filing to the Muscat Stock Exchange, Ihsan al Jandal, Chief Operating Officer of OQBI, said the offtake agreement “underscores OQBI’s commitment to supporting Oman Vision 2040, fostering industrial diversification and promoting value-chain localisation within the Sultanate of Oman’s petrochemical sector”.
“It further demonstrates OQBI’s ongoing efforts to enable sustainable growth, enhance in-country value and strengthen strategic partnerships across Oman’s energy and industrial ecosystem”, he added.
DFPCL, Deepak Oman’s parent company, is a well-established producer of a wide range of industrial chemicals and agricultural fertilisers. Over the past 45 years, it has evolved from an ammonia manufacturer into a multi-product conglomerate with manufacturing facilities across several Indian states, supplying products such as nitric acid, methanol, technical ammonium nitrate and NPK and specialty fertilisers to domestic and international markets.