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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Developing local cargo key to bolstering growth

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By Conrad Prabhu — MUSCAT: MAY 14 - Developing local export and import cargo volumes is indispensable to the goal of securing additional shipping business at the Port of Salalah, a top official of the maritime and logistics hub has stressed. The warning comes against a decline in container and general cargo throughput in the first quarter of this year, versus figures for the corresponding quarter of 2016, which along with the increase in corporate income tax coming into effect this year, resulted in the port suffering a rare consolidated net loss for the quarter under review.


A long-term solution for attracting new shipping lines to Salalah lies in bolstering local import and export cargoes, according to Braik Musallam al Amri, Chairman of the Board of Directors.


“Developing more gate cargo remains the essential priority to anchor new and additional business in the Port. Gate cargo development is directly tied to economic growth and activity in Dhofar (Governorate). New projects in the free zone have an immediate positive impact on the gate volumes, and more encouragement of growth in the free zone and investment in industry will increase gate cargo,” said Al Amri in the Directors’ Report of the port’s performance for the quarter ended on March 31, 2017.


Container volumes slipped 8 per cent to around 722,000 TEUs during Q1 2017, down from around 782,000 TEUs a year earlier. Contributing to this decline was a decision by the customer of a shipping line to reduce their transshipment volumes through the port, said Al Amri, noting however that efforts are under way to claw back these volumes.


General cargo throughput also dipped 3 per cent to 3.361 million tonnes during the same period, versus 3.464 million tonnes for the corresponding quarter of 2016. Mineral based commodities, notably limestone and gypsum, accounted for the dominant share of general cargo exports, alongside sizable volumes of methanol and cement as well.


The downtick in cargo throughput impacted revenues which, along with the higher corporate tax, resulted in a consolidated net loss for the company amounting to RO 1.020 million for Q1 2017, as compared to a profit of RO 1.567 million in Q1 2016.  Changes in the Oman Income Tax Laws required the company to provide a higher deferred tax liability of RO 1.483 million for the quarter, said Al Amri.


In the report, the Chairman also lamented the “sudden” introduction of additional customs duty and surcharges on general cargo — measures that resulted in the complete stoppage of exports for almost a week, he said. Efforts are ongoing to alleviate the impact of these measures, he said.


The Chairman also noted efforts by the port management to achieve a diversified portfolio of shipping lines operating at Salalah. “Discussions ongoing with existing customers for improving value by offering trucking services and therefore a differentiated product for the Yemen transit cargo,” he added.


Last week, Port of Salalah signed a memorandum of understanding (MoU) with SASCO International for Logistics Services to support the movement of Yemen-bound goods via the free zone at Mazyunah straddling the common border between the two countries.


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