The ICV dividend

Every few weeks I sit across from a manufacturer in Suhar, Rusayl or Al Duqm who treats In-Country Value (ICV) the way one treats a tax audit — as a cost to be minimised, a box to be ticked, a clause to survive. “ICV is killing our margins,” they tell me. “It is a compliance headache.” I understand the frustration, but I believe it rests on a misreading of what ICV actually is. ICV is not a liability imposed on industry. Properly understood, it is one of the most powerful economic value-creation and competitiveness tools available to an Omani manufacturer today.
Consider the context. Oman’s manufacturing sector grew 7.2 per cent in 2025 and contributed RO 3.9 billion to GDP, with industrial employment climbing to roughly 248,000 — up from barely 20,000 in 2020. Non-oil sectors now account for more than 73 per cent of GDP at constant prices, and non-oil exports reached RO 6.885 billion last year, a 10.5 per cent jump. Vision 2040 aims to lift manufacturing’s share of GDP from around 5 per cent toward as much as 14 per cent. None of these happens by accident. It happens because spending is being retained inside the country and recycled into local suppliers, local skills and local capacity. That, in one sentence, is what ICV does: it converts domestic expenditure into productive national assets and long-term industrial capability.
The institution that proved this is possible is Petroleum Development Oman. PDO is where the ICV concept in Oman was born, and under the stewardship of its Managing Director, Dr Aflah al Hadhrami, it has matured from a procurement policy into a genuine engine of national development. The numbers tell the story: PDO now retains around 42 per cent of its supply chain spend locally — a figure that stood at just 18 per cent in 2012 — and is targeting 52 per cent by 2030. In a single recent year, it channeled some $2.5 billion into ICV, including roughly $900 million to SMEs.
Its ICV programme is credited with helping establish 83 manufacturing facilities, creating more than 17,500 jobs for Omanis, and generating an estimated $4.3 billion in cumulative economic impact. Crucially, PDO has not treated localisation as charity. Through 15 Vendor Development Programmes and recent supply agreements — for high-voltage cables and locally manufactured ball valves — it has built suppliers capable of meeting international benchmarks. That is institutional leadership transforming localisation mandates into globally competitive industrial capabilities.
OQ, Oman’s integrated energy group, has carried the same philosophy into the country’s most ambitious industrial frontier at Al Duqm. Between January 2024 and June 2025, the In-Country Value generated by OQ and its partners there exceeded $1.57 billion, with local spend surpassing $1 billion — 64 per cent of total expenditure.
More than $36 million flowed to SMEs and over $24 million to firms registered under Riyada. These are not token gestures; they are the deliberate construction of a local supply base around anchor investments, the kind of backward linkage that economists know is the surest route to lifting the productivity of domestic firms and increasing the domestic retention of economic value.
If PDO and OQ show what scale can achieve, Voltamp Energy shows what ambition can achieve. This is not Oman’s largest company, but in manufacturing depth it is among our most formidable. From its plants in Suhar and Rusayl, Voltamp designs and builds power and distribution transformers, and in 2023 it manufactured the first 400 kV, 500 MVA power transformer ever produced in the GCC — a class of technology held by only around 30 countries worldwide.
That capability was not handed to Voltamp; it was built, through engineering investment, technology partnership and a deliberate decision to localise high-value work that others import. Its most instructive move, however, came last month. In May 2026 the company launched “Watenha” — a localisation initiative run with the Authority for Public Services Regulation and the Authority for SME Development.
The premise is as commercially shrewd as it is patriotic: Voltamp identified ten high-demand components it currently imports and opened them to local entrepreneurs and investors, offering guaranteed purchase agreements, technical support and access to regional markets. The targets are concrete — an estimated RO 30–50 million in local value, around ten new factories, roughly RO 50 million in investment, and at least 100 specialised jobs.
Within weeks, 84 companies from six countries had registered, every one of the ten opportunities drew interest, and each attracted more than 15 qualified bidders. In one stroke Voltamp converted its own ICV obligation into a shorter, more resilient supply chain and an ecosystem of Omani suppliers around it. That is not box-ticking. It is risk management, cost control and market positioning rolled into one — the “burden” turned into a durable competitive advantage.
And these are not isolated cases. Jindal Shadeed in SOHAR built Oman’s first integrated steel plant and remains one of the GCC’s largest low-carbon steel producers, anchoring an entire downstream ecosystem. Oman Cables Industry, with copper and aluminium capacity exceeding 120,000 tonnes a year, has made Omani-made cable a regional standard rather than an import.
Vale Oman in SOHAR has built lasting relationships with local engineering, maintenance and service suppliers, quietly diffusing global quality and safety standards into the domestic base. Different sectors, same lesson: localization done well is an industrial strategy that strengthens competitiveness, resilience and long-term value creation, not a compliance story.
This is where ICV connects to something larger than any single balance sheet. When a transformer, a valve, a cable or a steel beam is made here, the value chain deepens and Omanis move into the roles that matter — design and engineering, operations, quality control, safety, plant management, leadership.
We are not short of capability; we are short of the deliberate decision to deploy it. ICV is the mechanism that forces that decision and rewards it. It strengthens product competitiveness, improves our trade balance, builds Omani know-how that compounds over decades, and lifts the very economic indicators Vision 2040 is measured against. In economic terms, ICV raises the domestic multiplier effect of every rial spent and increases the share of value retained within the national economy.
The enabling environment has never been more supportive. The Foreign Capital Investment Law, expanded free zones at Suhar, Salalah and Al Duqm, Madayn’s industrial estates, sector tax holidays, restructured public procurement that prioritises ICV-compliant bidders, the new Majd programme and a mandatory list of locally manufactured products, and SME support through Riyada — the scaffolding is in place. The Eleventh Five-Year Plan (2026–2030) names manufacturing a priority engine. The policy question has effectively been answered. What remains is the mindset.
So I would put it plainly to my colleagues in industry. Stop accounting for ICV as a cost line and start treating it as a strategy. If Voltamp — a mid-sized Omani manufacturer — can turn localization into a $130 million pipeline and a regional advantage, and if PDO and OQ can build billion-dollar local supply chains around their operations, the question is not whether your firm can do the same, but why it has not started. ICV is not the price of doing business in Oman. It is, increasingly, one of the country’s most effective mechanisms for creating industrial competitiveness, retaining national wealth and building the productive economy envisioned under Oman Vision 2040.