Wholly Omani government-owned integrated water services utility Majis Industrial Services (MIS) has ambitions to expand its operations, currently limited to Suhar, to other industrial and economic hubs of the Sultanate of Oman, as well as potential markets in the wider Gulf Cooperation Council (GCC) region.
Majis, a subsidiary of Oman Investment Authority (OIA) – the integrated sovereign wealth fund of the Sultanate of Oman – is among a number of state-owned entities that are being primed for partial privatisation as part of OIA’s divestment strategy. Initial Public Offerings (IPOs) via the Muscat Stock Exchange (MSX) is the preferred route for privatisation.
At the MSX Investors Roadshow held last week, a top official of Majis provided an overview of the company’s business model, operational performance and vision for growth.
Hamed Ali al Wahaibi, Acting CEO, said the company currently provides an array of water-related utility services to mainly industrial customers operating at Sohar Port and Free Zone, as well as the nearby Suhar Industrial City. As many as 50 customers are presently connected to Majis’ comprehensive networks that supply cooling seawater, ultra-pure process water and potable water, as well as benefit from sewage and industrial effluent treatment services provided by the company.
“We have a very attractive business model, with well-invested assets and also sustainable growth acceleration, backed by capable and experienced management,” said the Acting CEO. “We have an exclusive concession with Sohar Port and Free Zone as the sole utility services provider, with ownership of integrated utility assets, such as seawater intake system, RO plant (and other infrastructure), with the ability to scale and grow the business. We have long term agreements with our customers, with an average remaining duration of 15 years and with over 90 per cent of our agreements based on ‘take or pay’ arrangements. That gives you an indication that our cash flow is pretty much predictable and also stable.”
Commenting on Majis’ financial performance, he said the company has been growing at a compound annual rate of about 20 per cent since its establishment in 2007. Majis continues to deliver “double-digit” profits for its shareholders, he noted.
Sharing insights into Majis’ growth plans, Al Wahaibi said the company aims to set up similar integrated utility networks to support industries in Salalah Free Zone. Following the signing of an MoU in this regard last year, Majis recently completed the ‘business case’ for delivering on this initiative and hopes to “reach an agreement” with the free zone authority to take this forward.
Additionally, Majis is exploring opportunities to provide its integrated model of water utility services to potential customers via the Public Private Partnership (PPP) route, he said. In March, the company submitted its bid for a PPP-based water services project planned for procurement by Oman Water and Wastewater Services Company (OWWSC), which emerged from the restructuring and merger of Haya Water and Diam.
Going forward, Majis also has its sights on opportunities in the wider GCC region, based on an outward expansion envisioned within the next “3 – 4 years”, he added.
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