Oman and member states of the GCC bloc are expected to see an uptick in the localisation of food and pharmaceutical manufacturing activities – one of several learnings from the COVID-19 pandemic which had thrown global supply chains into disarray and imperilled the smooth flow of essential commodities into the import-dependent Gulf region.
Local production of critical goods is one of several potential opportunities emerging from the crisis that Oman, among other GCC states, must look to capitalise on in order to be better equipped for future upheavals of this nature, according to a key official of the Sultanate’s logistics industry
Omar Mahmood al Mahrizi (pictured), CEO – Sohar Freezone and Deputy CEO – Sohar Port, made the comments while taking part in a webinar on Thursday, organised by leading Hong Kong based events management firm Transport Events. Fellow panellists included Shaikh Al Abdullah al Sabah, Director General – Kuwait Ports Authority, and Gagan Seksari, Director – Global Investments, Red Sea Gateway Terminal, Saudi Arabia.
Speaking on the theme, ‘Current Challenges and Future Opportunities for Ports and Terminals in the Middle East,’ Al Mahrizi said: “With the Gulf states importing around 70 percent of their food requirements, (sourcing supplies) became a huge challenge when supply chains were under disruption; India was under lockdown, and so were trucking movements. We had to resort to direct importing in the circumstances; it was a harsh lesson for us in the region. Hopefully we shall see more investment in these critical sectors,” he stated.
Al Mahrizi also listed opportunities emerging from the anticipated de-risking of supply chains, with countries expected to give greater emphasis to port-centric logistics, direct importing, and intermodal options. Digitalisation and paperless transactions are also expected to speed up trade facilitation, while port authorities themselves will step in to contribute to supply chain transparency by improving integration and information sharing via technology, he noted.
But he acknowledged challenges ahead for the port and maritime industry from the pandemic as well as the economic downturn unleashed by low oil prices. Import and export volumes are expected to slump as a result of the slowdown across the Gulf region. Economic uncertainty is also likely to delay new investment decisions over the short term, while funding of new industrial projects could become more expensive, thus delaying new expansions, he said.
The grim outlook comes as Sohar Port and Freezone reported continued steady growth in 2019, attracting 3,144 vessels calls and generating 62 million tonnes in total throughput volumes during the year. Sohar Freezone, which currently has over 200 tenants and investors, saw an uptick in warehousing capacity, which was put to good use during the pandemic, he added.