Possible Investment Areas

Oman's investment climate is distinct and typical as there are several investment opportunities in petrochemicals, fertilizers and manufacturing industries that depend upon cheap energy. Furthermore, there are several deposits of exportable minerals and assembling industries in Oman, through the Salalah port. Oman's strategic location, as the gateway of the largest energy sources in the world, enhances its marketing dimension. In the field of tourism, Oman is a promising tourist destination and a potential place for investments in large hotels and tourist resorts. 

PROMISING INVESTMENT OPPORTUNITIES IN OMAN

Firstly: Investment Opportunities in Agriculture and Fisheries Sector:

1. Honeybee Keeping (small manufacturing unit):
Project Cost : USD 41.600/-
Rate of Internal Return: 14% 
Breakeven Point : 54% 
Capital Reimbursement Period: 4 years and 4 months

2. Animal Fodder Manufacturing:
Project Cost : USD 463.900/-
Rate of Internal Return: 18 % 
Breakeven Point : 72 % 
Capital Reimbursement Period: 6 years and 4 months

3. Dates Processing Plant:
Project Cost : USD 347,300/-
Rate of Internal Return: 25 % 
Breakeven Point : 45 % 
Capital Reimbursement Period: 4 years

4. Brown Sugar Manufacturing Unit:
Project Cost : USD 46,540/- 
Rate of Internal Return: 13 % 
Breakeven Point : 51 % 
Capital Reimbursement Period: 6 years and 7 months

5. Water Farming Project:
Water farming (without soil) is one of the latest production technologies used to grow vegetables in green houses whereby the production can be doubles and good quality fruits can be grown. Besides, it is very cost effective and requires less labour and manure.
A wide range of vegetables can be commercially grown in this way, such as tomato, cucumber, lettuce, strawberry, etc., during the summer season. Each unit will have an area of 1000 square meters fitted with irrigation systems and computer controlled cooling equipment. The expected production from this project is around 80 tons per year. 
Project Cost : USD 505.300/-
Rate of Internal Return: 31 % 

6. Youth Fishing Vessels Project:
The concept is based on having a partnership between a number of Omani young people (the first party) and the commercial fishing sector (the second party) to carry out fishing and related activities. While the second party will finance, market and train, the Ministry of Agriculture and Fisheries will supervise the project and participate in training. Oman Development Bank will provide soft loans for the project.

Financial Analysis of the project: 

7. Manufacturing and Marketing of Agriculture Equipment:
The private sector can participate in manufacturing modern irrigation systems. If not fully, focus can be made in the beginning, on manufacturing the spare parts that are required on a constant basis for such systems. Besides, it can manufacture maintenance equipment for these systems. There is a very good scope for such projects, particularly if we notice that rationalized usage of irrigation water is considered a strategic goal and a key factor in agricultural development and that around 85% of the area under cultivation still require modern irrigation systems.
Green house farming is one of the major factors of vegetable production development in Oman and as such, projects for marketing production accessories can be set up. This can be either for selling them whereby they will be available for the farmers readily and at reasonable rates, or for offering production services such as setting up of agricultural mechanisation services or veterinary services.

8. Agricultural Marketing Projects
Setting up of marketing establishments for vegetable and animal products, including transportation, sorting, storage and marketing, is one of the major challenges faced by agriculture development and therefore, these activities provide a good opportunity for private investors.

Source: Ministry of Agriculture and Fisheries.

Secondly : Investment Opportunities in the Industrial Sector:

1. Soya Protein Concentrate:
Production : 2,520 tons of Soya protein concentrate plus 4,680 tons of animal fodder per annum.
Sales : USD 3.85 million 
Investment Cost: USD 3.4 million 
Labour Force: 25 
Profitability indicator (IRR): 27% 

2. Speciality Bio fertilizers:
Production : 2,060 tons per year
Sales : USD 4.25 million 
Investment Cost: USD 2.08 million 
Labour Force: 51
Profitability indicator (IRR): 28%

3. Narrow cold rolling Plant:
Production : 35,000 tons per year
Sales : USD 13.67 million 
Investment Cost: USD 13.11 million 
Labour Force: 77
Profitability indicator (IRR): 16%

4. Seafood Can:
Production : 39 million cans per year
Sales : USD 2.56 million 
Investment Cost: USD 1.22 million 
Labour Force: 65
Profitability indicator (IRR): 27 % 

5. Ultra Thin Aluminium Foil:
Production : 5000 tons per year
Sales : USD 16.49 million 
Investment Cost: USD 18.87 million 
Labour Force: 50 
Profitability indicator (IRR): 19 % 

6. Aluminium Ladders (step, extension and articulated ladders ):
Production: 240,000 units per annum.
Sales : USD 16.8 million 
Investment Cost: USD 10.66 million 
Labour Force: 91
Profitability indicator (IRR): 44 % 

7. Re-cycling of Aluminium Alloy Ingots:
Production of aluminium silicon of various degrees by using aluminium scrap as main raw material.
Production: 6,856 tons per annum
Sales : USD 5.9 million 
Investment Cost: USd 4.32 million 
Labour Force: 24
Profitability indicator (IRR): 54 %

8. Round AC Ducts:
Production: 315.000 m2 of ventilation and air-conditioning ducts plus 126,000 m2 of accessories per annum.
Sales : USD 2.64 million 
Investment Cost: USD 1.71 million 
Labour Force: 27
Profitability indicator (IRR): 33%

9. Teflon Lines/Sleeved Industrial Valves:
Production: .16,200 units per annum
Sales : USD 3.05 million 
Investment Cost: US$ 1.63 million 
Labour Force: 36
Profitability indicator (IRR): 30 % 

10. Glass Reinforced Gypsum Panels:
Production: 734,400 m2 ( 25,700 tons) per annum
Sales : USD 4.96 million 
Investment Cost: USD 4.72 million 
Labour Force: 22
Profitability indicator (IRR): 22%

11. PVC and Hydrochloric Acid (HCl):
Production : 100,000 tons of PVC and 58,000 tons of HCl per annum
Investment Cost: USD 141,69 million

12. Tyre Recycling:
Manufacturing rubber and steel crumbs from used truck and bus tyres.
Production : 550 tons of Rubber granules + 3500 tons of steel per annum
Investment Cost: USD 6.57 million 

13. Acrylic Bathroom Products (Tubs and Basins):
Production : 72,000 tons per annum
Investment Cost: USD 4.19 million 

14. PVC Insulation Panels:
3-15 mm thick PVC insulation panels and 1-2- cm thick solid panels
Production: 3000 tons per annum 
Investment Cost: USD 5.02 million

15. Plastic Waste Recycling:
Manufacturing plastic sheets, profiles, bases used for fencing wires, protective railing, plant pots, outdoor furniture, etc 
Production : 2,700 tons per annum
Investment Cost: USD 4.58 million

16. Ceramic Electrical Insulators:
Manufacturing 4 types of insulators for various usages.
Production : 30,000 tons or 8.2 million units per annum
Investment Cost: USD 26.45 million
Labour Force: 

17. Molecular Sieves:
Manufacturing various types of high efficiency sieves for using in natural gas processing, oil refining, petrochemical industries and air separation.
Production : 5000 tons per annum 
Investment Cost: USD 46.33 million 

18. Ferro Chloride:
Manufacturing ferro chloride (40% solution) used in drinking water and waste water treatment
Production : 6000 tons per annum
Investment Cost: USD 3.9 million 

19. Leaf Springs:
Manufacturing of various types of multi layer leaf springs for automobiles.
Production : 3000 tons per annum
Investment Cost: USD 5.16 million 
Labour Force: 33

Source: Project from 1-10: Gulf Organisation for Industrial consulting (GOIC)
Projects from 11-19: The Omani Centre for Investment Promotion and 
Export Development (OCIPED)

Thirdly: Investment Opportunities in Tourism Sector:

1. A Company for Hotel Management:
The functions of this company will be to construct and manage hotels and tourist resorts, provide management consultations, manage real estates, provide internal design services for hotels, develop tourist hotels in strategic areas, etc.
Capital required: Between $10.4 and $18.2 million .

2. Al Sawadi Resort ( Batinah Region):
Location: Al Sawadi Beach, Wilayat Barka
Investment Cost: USD 279.5 million (approx)
Project Description: Construction of 5 hotels of 5, 4 and 3 stars, a swimming pool, a 5-star health club, golf course, shopping complexes and residential villas. 

3. Tourist Resort in Massirah Island:
Location: Massirah Island
Project Description: construction of a tourist resort comprising all necessary utilities such as a rest house, swimming pool. Water sports club, restaurants and coffee shops. 
Investment Cost: Between 130 and 390 million US Dollars.

4. Hotel in Khasab:
Location: Khasab, Governorate of Musandam
Cost: USD 9.1 million (USD 7.8m founders and the rest through soft loans $1300.000.

5. Tourist Resort in the Wilayat of Diba:
Location: Diba, Governorate of Musandam
Cost: Between USD 3.12 and 7 million 
Manpower: 25-75 full time employees

6. Tourist Village in Mirbat:
Location: Beach near Mirbat in the southern region.
Project execution status: The execution contract of the first phase has been already awarded to the Modern Contracting Co. The project has received a royal subsidy of USD 2.6 million and a soft loan of USD 10.4 million from the Ministry of Finance. The project still welcomes foreign participation.

7. Eco-Tourism Resort in Ras al Jinz (4 star):
Location: Sur in the Sharqiya Region
Number of rooms: 84 
Total cost: USD 11.76 million
IRR: 15%
Capital Reimbursement Period: 7 years 4 months 

8. Tourist Resort in Salalah ( 4-5 stars):
Location: Salalah, Dhofar Governorate
Number of rooms: 250 
Total cost: USD 45 million
IRR: 22%
Capital Reimbursement Period: 5 years 5 months 

9. Tourist Resort in Musandam:
Location: Khasab, Musandam Governorate
Number of rooms: 150 
Total cost: USD 43.5 million
IRR: 24%
Capital Reimbursement Period: 4 years 1 month

Fourthly: Investment Opportunities in Privatisation Programme:

1. Rusayl Power Station:
Location: Muscat 
Objectives: To ensure private sector participation in gas turbine power generation plant to produce around 690 megawatt electricity per year for a 15 years of concession.
Provisional cost: USD 180 million approx. 
Commencement date: 2001
Project structure: The project is currently owned and run by the Government and its assets will be transferred to a government holding company which will sell 65% of its equity to strategic investors. The Government will retain the remaining equity for a short period after which it will be offered to the private sector through Muscat Securities Market. 
Current Status: A power company shall be set up as one of the three power companies in the near future within the industry restructuring programme. 

2. Ghubra Power and Desalination Station:
Location: Muscat Governorate
Objectives: To participate the private sector in managing and operating the station and to provide water and power to the capital area. Annula power generation will be 540 megawatt per annum and 1.680 million cubic metres of desalinated water per day. 
Provisional cost: USD 490 million approx. 
Commencement date: 2001
Project structure: The project is currently owned and run by the Government and its assets will be transferred to a government holding company which will sell 65% of its equity to strategic investors. The Government will retain the remaining equity for a short period after which it will be offered to the private sector through Muscat Securities Market. 
Current Status: The Ghubra Power and Desalination Company shall be set up as one of the three power companies in the near future within the industry restructuring programme. 

3. Wadi Jizzi Power Station:
Location: 25 km west of Sohar (North Batinah region) 
Objectives: The private sector to produce 337 megawatt electricity per year for the Dhahira and Batinah regions and the surrounding areas.
Provisional cost: USD145 million approx. 
Commencement date: 2001
Project structure: The project is currently owned and run by the Government and its assets will be transferred to a government holding company which will sell 65% of its equity to strategic investors. The Government will retain the remaining equity for a short period after which it will be offered to the private sector through Muscat Securities Market. 
Current Status: The Wadi Jizzi Power Company shall be set up as one of the three power companies in the near future within the industry restructuring programme. 

4. Power Transmission and Control Grids:
Location: All over the Sultanate 
Objectives: Participation of the private sector in managing and owning the power transmission grids and distribution centre. 
Provisional cost: USD 890 million approx. 
Commencement date: 2002
Project structure: Though the project will be initially owned by the Government through a government holding company, it will be widely privatised by selling off 65% of its equity to strategic investors, followed by offering the remaining shares for public subscription. 
Current Status: A Power transmission company (Transco) is being set up by the Government.

5. Power Supply & Distribution:
Location: all over the Sultanate 
Objectives: Participation of the private sector in managing and owning the power supply networks all over Oman..
Provisional cost: USD 390 million approx. 
Commencement date: 2002-03
Project structure: The power supply network will be divided for three regional areas and the Government will set up three companies to manage the supply system. 65% of the project's equity will be sold to strategic investors. The remaining shares will be offered for public subscription at a later stage.
Current Status: The Government is in the process of forming three companies, one each for Muscat, Sharqiya/Dakhiliya and Batinah/Dhahira regions.

Source: Ministry of National Economy.