Sohar Port: Setting Soaring Standards
Sohar Port is set to play a key and instrumental role in realizing the Sultanate’s Logistics Strategy 2040 which aims to rank Oman among the top ten countries in the world for exceptional logistics performance by the year 2040.
Sohar Port’s stellar accomplishment since its inception in 2002 and further fortified by the establishment of the sprawling and rapidly developing Free Zone in 2010, is well chronicled and makes for an interesting narrative.
SOHAR is rapidly becoming a major industrial and logistics hub in the region, with easy access to global markets. Its strategic location makes it a gateway between the East and West, at the heart of some of the busiest shipping lanes in the world. Our vision is to establish SOHAR on the global map for transhipments, thereby contributing to Oman’s logistics performance.
In 2002, the Government of Oman and the Port of Rotterdam signed a Memorandum of Understanding to develop a concession agreement for SOHAR Port. Royal Decree 80/2002 ratified the Concession Agreement of Sohar Port and was issued in August of the same year.
- Briefly, provide us the history and origins of the SOHAR Port & Free Zone?
In 2002, the Government of Oman and the Port of Rotterdam signed a Memorandum of Understanding to develop a concession agreement for a 50/50 joint venture for SOHAR Port until 2043. The Royal Decree 80/2002 ratified the concession agreement and was issued in August of the same year.
SOHAR is rapidly becoming a major industrial and logistics hub in the region, with easy access to global markets. Its strategic location makes it a gateway between the East and West, at the heart of some of the busiest shipping routes in the world. Our vision is to establish SOHAR on the global map for transshipments, thereby contributing to Oman’s logistics performance.
The construction of the petrochemical complex, the first terminal and other facilities started in 2003. The same year, the first lease agreement was signed between Sohar Industrial Port Company and Sohar Refinery, followed by a second agreement for the general cargo terminal with C. Steinweg Oman LLC.
In 2007, a concession agreement was signed between the Omani government and SOHAR to develop SOHAR Freezone, with the 4,500 ha free zone officially established in 2010. Since then, SOHAR Port and Freezone has been at the core of Oman’s economic diversification efforts, contributing to the Sultanate’s growth and logistics network.
- How have things shaped and evolved for the port over the past over 18 years since the formation of the port?
SOHAR Port has created a remarkable footprint, both in the region and globally and we are proud to be ranked one of the fastest-growing port and free zones in the world, with investments exceeding USD 27 billion. Thanks to our strategic geographical location we provide convenient access to markets in Asia, Africa and the Middle East, with an outreach of over 2 billion end consumers,
SOHAR Port continues to play a vital role in accomplishing the objectives of the Sultanate of Oman Logistics Strategy 2040 (SOLS), which aims to place Oman among the top ten countries for logistics performance by the year 2040, and the transport sector as the second-highest source of national income.
- What are the future plans for the growth of SOHAR Port? You currently have new two licenses—can you please elaborate these and what other plans are in line with the further port expansion and development?
SOHAR Port and Freezone continues to expand and reach out to important markets and reinforce relationships with investors from across the globe. Our well-established mission and vision have helped all the members of the SOHAR family remain focused on delivering business excellence to clients and tenants.
There are several projects in the pipeline, including establishing a Solar Park for both upstream and downstream opportunities and the creation of an LNG bunkering facility. Both are in line with our commitment to sustainability and the provision of cleaner energy sources.
Our land lease opportunities at SOHAR Port South and Terminal 2D help us grow and adapt as per current market demands. We also take pride in implementing other innovative solutions, based on the latest developments and technologies that are beneficial to our existing and future tenants as well as the community at large.
Businesses looking to set up a business at the Port or Freezone can apply for a General Trade License (GTL), which extends several discounts to established and potential investors. A second license, Tasheel, is available for our customers to streamline documentation requirements. Derived from the Arabic word for ‘Simplified’, this easy-to-use online Permit Management System is one of our many digitised services and additions to Tasheel are planned to offer more features and flexibility to all users.
- In tandem with the growth of the Port is the Freezone and its multiple clusters. Please elaborate.
SOHAR hosts a number of industrial clusters at both the Port and the Freezone, with the latter specifically comprises of the solar, metals, logistics and automotive clusters. It also offers several incentives for investors to set up and operate their businesses with ease, including 100% foreign ownership, corporate tax holiday of up to 25 years, One-Stop-Shop for all relevant clearance, 0% personal income tax, low capital requirements and much more.
SOHAR Freezone boasts of a large grid power infrastructure within its area. Together with Shell Development Oman (SDO), SOHAR signed an agreement that will see the provision of clean energy solutions through the facilitation of solar photovoltaic (PV) projects. The development will focus on meeting the energy demands of industrial tenants within the Freezone. The Freezone will see the development of the biggest antimony-gold processing facility,which will be the first-of-its-kind in the region.
The developing area is home to several warehousing spaces that are ready and tailor-made to suit customers’ needs. With the expansion of several tenants, including Al Hosn Logistics & Warehousing Services LLC, Matrix Prime and RFX Parks, the Freezone is looking forward to welcoming potential visitors seeking to set up in a rapidly expanding logistics hub, enhanced by integrated facilities to the Port.
Recently, we established additional office space and are overseeing the construction of cold storage facilities (by Al Hosn), both of which will enable the transit of products and commodities through Oman or for distribution within the region.
- What are key takeaways / broad observations from a corporate perspective for SOHAR Port and separately for the Freezone?
Our strategic location and the Sultanate’s stable political climate make SOHAR the optimal location to set up a business. High levels of government support, easy-to-obtain project financing from local banks, 100% foreign ownership, and seamless connectivity are all key incentives for investors.
Our integrated facilities enable us to support the entire supply chain, from production to delivery, in one easily accessible area. As an example, everything from the import of minerals, to its processing and final distribution, can take place entirely within SOHAR Port and Freezone.
We believe that working together with the Port of Rotterdam is an immensely fruitful partnership. With over 600 years of experience, their insight into the industry and best practices in the field of environmental protection and technological innovation is second to none. While we continue to chart our own course, the knowledge we have obtained from such close ties has been vital to our growth and expansion. As a result, despite SOHAR being 18 years young, we have emerged as one of the fastest-growing ports in the region and one that is steadily emerging as a regional logistics hub.
- How has pandemic impacted your business in the Sultanate of Oman and regionally?
We are in the fortunate position to have experienced a limited impact on transshipment business due to the COVID-19 crisis. Although Oman may see a decline in import and export volumes over the course of 2020, our outlook remains positive with the supply chain’s ongoing adaptations to current challenges. It remains to be seen how the decline in global demand affects the Sultanate’s diversification opportunities, but we continue to work towards a better and bright future.
- How is SOHAR Port better preparing to possibly avert and deal more effectively with this current situation?
We are moving towards finding innovative methods to digitalise our services and enhance the ease of doing business. Our most recent project, Tasheel, enables our tenants and service providers to apply for various work permits online. Our business continuity plan has seen the implementation of preventive measures all around our facility – from welcoming vessels to the port to creating a safe work environment at our offices. Inspections are conducted aboard all vessels and our marine staff is equipped with the necessary PPE.
We continue to keep ourselves well-informed, not only to be in the position to adhere to the regulations of the Supreme Committee, but also to ensure quality customer service.
On the community level, we support initiatives that aim to minimise the impact of COVID-19, including donating to the Endowment Fund of the Ministry of Health and providing vehicles and equipment to frontline workers. Overall, we hope to avert any challenges the communities may face as a result of the pandemic.
More on this article can be found on the Global Supply Chain: July August 2020 link http://globalsupplychainme.com/digital-issues/jul-aug20/