MUSCAT, JUNE 6 -
The Special Economic Zone (SEZ) of Duqm has been tipped to host a string of new cement mills which, along with a sizable investment planned in Suhar, is set to ramp up Oman’s cement production capacity exponentially.
Driving the strategy to upscale the Sultanate’s aggregate capacity for the production of cement — a strategically important commodity — is the Implementation Support & Follow-Up (ISFU) Unit, a task force set up under the auspices of the Diwan of Royal Court to oversee the timely execution of a number of initiatives designed to spur the nation’s economic diversification.
The goal, according to the ISFU Unit, is to bridge the gap between cement consumption and domestic production capacity — a gulf that is presently addressed by substantial imports. “The aim of the initiative is to increase the local production of cement.
The outlook for the Sultanate for the growth of this industry remains positive as the government has been rolling out infrastructure projects as part of its economic development plans. Moreover, Oman is rich in minerals needed for the cement industry such as limestone and gypsum,” the Unit said in its newly published Annual Report 2017.”
According to the report, the Sultanate “witnessed a gap between the consumption and demand for cement” since 2006.
“Of the total demand of 9 million metric tonnes (MT) of cement in 2015, 54 per cent was met through imports, and the remainder 46 per cent was produced from the local plants. The initiative intends to ensure that the country produces its own cement and reduces the reliance on cement imports.”
In all, four large-scale cement mills are envisioned for implementation in Duqm SEZ. When operational, they will offer around 5 million tonnes of new cement capacity in the SEZ alone by 2021.
Notable is Al Taj Cement, which is investing in a 2 million MT capacity cement plant with backing from Iraq-based Al Yamama Engineering Co. Commercial operations are slated by the fourth quarter of 2020.
Also in the works is a new white cement plant, which will help dramatically reduce Oman’s longstanding dependence on imports covering a substantial part of demand for this commodity — used primarily in the construction industry. Imports averaging 78,200 MT in 2017 are expected to soar to 98,700 MT by 2026. The wider GCC is itself a net importer of white cement, having procured around 587,000 MT of the product in 2017 — a figure set to rise to 726,000 MT by 2026.
The Ministry of Commerce and Industry is currently studying the feasibility of establishing a 900 MT per day capacity white cement plant in Duqm. “Based on the results of the feasibility study, the Ministry of Commerce and Industry will prepare a full opportunity package and look for a potential investor,” ISFU said in its report.
Also making headway is the partnership of Oman-based Al Anwar Holding SAOG (40 per cent) and Hormozgan Cement of Iran (60 per cent), which plans to establish a cement-grinding unit with a capacity of around 1 million MT in Duqm. Land for the project has already been allocated, with commissioning targeted by early 2020.
Rounding off the list of new cement investments in Duqm is Al Wusta Cement — a JV of local cement manufacturers Oman Cement and Raysut Cement. The JV is looking at developing a 1.75 million MT capacity grey cement plant, for which a land usufruct agreement has already been inked with SEZAD.
The partners are currently updating a feasibility study into the venture, upon the completion of which both sides will initiate the groundwork for the necessary permits, financing and other project requirements.