Salalah, the second-largest city in Oman, historically renowned for being a vital hub for trade and commerce, is a land of endless investment opportunities for foreign, local, and regional investors. The city is known for its natural beauty, vibrant culture, natural resources, and strategic location on the Arabian Sea. The city has been actively promoting its business-friendly environment and been taking steps to attract investors from all over the world.
The city also has several universities and colleges that offer courses in a range of disciplines, including engineering, business, and tourism which positions Salalah labour as high performing skilled candidates.
One of the key factors driving investment in Salalah is the government's commitment to economic diversification. Diversity in Salalah’s opportunities are many with great potentials for growth. Key sectors with potential for investment and growth identified being;
* The logistics sector of Salalah, which is strategically located on the Arabian Sea, makes it an important hub for trade and commerce. The region is home to the Port of Salalah, which is one of the largest ports in the Middle East and Africa and a global hub on the East-West trade route. The port offers easy access to markets in Asia, Africa, and Europe, and America making it an attractive destination for investors looking to expand their operations in the region. The Port of Salalah handles a wide range of cargo since it has three terminals for containers, dry bulk, and liquids. The government has invested heavily in expanding and modernizing the port, creating opportunities for foreign, local, and regional investors to invest in logistics, transportation, and other related sectors. This growth is expected to continue, with the government planning to invest in new logistics infrastructure, including the expansion of the port and the development of a new logistics park.
* The tourism sector in Salalah is well known for its natural beauty, including the Khareef (monsoon) season with visitors from around the world. Salalah is also home to several natural attractions, including the UNESCO World Heritage Site, the Frankincense Land, and a pristine coastline, which has attracted an increasing number of tourists in recent years with the number of visitors increasing annually. This trend is expected to continue as the government has been investing heavily in developing the city's tourism infrastructure. The growth in tourism has led to an increase in demand for accommodation, transportation, and other tourist-related services, creating lucrative opportunities in the sector as the growth is expected to continue.
* Manufacturing is a rapidly growing sector driven by the government's efforts to diversify the economy away from oil. The city has several industrial estates that offer investors access to affordable land, green energy, access skilled manpower and water resources. Others include food processing, chemicals, and textiles.
* Furthermore, Salalah has significant natural resources, including minerals. The government has also been investing in the development of the mining sector, which has the potential to contribute significantly to the country's GDP. In 2020, Oman's mining exports increased by 33.6% compared to the previous year, reaching a total of RO 1.48 billion. Untapped potential in minerals is inviting investors to explore and capitalize on the opportunities.
* Salalah is also home to thriving agricultural and fisheries industries, thanks to its fertile land, its fish production and favourable climate. Salalah Free Zone (SFZ) showcases outstanding competitive advantages tailored to the global food industry as it is a main food producer in the Arabian Gulf with only 150 km away from Najd agricultural land.
Meanwhile, SFZ offers easy, unrestricted access to the world’s greatest regional and global agricultural production areas such as East Africa, one of the fastest growing agricultural regions, and India, the second largest producer of rice and wheat. The region is also known for its production of frankincense, which has been traded for centuries and is highly valued in international markets. In addition to frankincense, Salalah produces a wide range of crops, including fruits, vegetables, and livestock. The agricultural and fisheries sector in Salalah has attracted significant foreign investment in recent years with more impact in food production projects with more capacity to be catered for.
* In addition, Salalah has the potential to become a center for green hydrogen and green ammonia production, by attracting several projects to establish ammonia production plants using green hydrogen thanks to the abundant renewable energy sources in Salalah, as it enjoys rich resources of solar energy and wind energy, supported by a world-class shipping infrastructure through the port of Salalah which is equipped with liquid jetty and a 4.6 km of pipelines connecting the port of Salalah directly to Salalah Free Zone, and is currently exporting ammonia, methanol and LPG through that infrastructure.
* Salalah Free Zone also proudly supports the pharmaceuticals industry’s needs with well-equipped, purpose-built facilities for cargo handling and cold storage. All this is supervised by trained personnel who are determined to provide a most inclusive ecosystem of service and solution providers. In addition, Salalah's proximity to developing markets such as Yemen, , Africa and the Indian subcontinent ,which shows an increasing need for medicines and medical supplies, making Salalah the ideal geographical location for the pharmaceutical industries. Salalah Free Zone is also home to the biggest pharmaceutical production plant in Oman.
* The petrochemical sector can also flourish in the Salalah Free Zone thanks to the availability of the locally manufactured petrochemical materials such as PET, Methanol, Ammonia, LPG etc. and the cross-border trade facilitation platform for petrochemicals shipments at port of Salalah.
The Salalah Free Zone (SFZ) has become a prominent magnet for investors seeking investment opportunities in the city. With an impressive anchor investment of RO 3.8 billion and the generation of 2490 job opportunities, the SFZ encompasses a vast area of 4,500 hectares. It presents investors with a tax-free environment and a host of incentives, including duty-free imports and exports, complete foreign ownership, and unrestricted repatriation of profits. Additionally, the SFZ has established an investment-friendly ecosystem, offering highly competitive manufacturing and logistics costs within the MENA region.
To encourage investment in these sectors, the government other stakeholder including other stake holder Oman Investment authority, Ministry of Commerce, Industry and Investment Promotion, ASYAD, OPAZ has taken several measures, including offering tax incentives, streamlining regulations, and providing infrastructure support. The abundance of investment opportunities in Salalah has been driven by the government's commitment to economic diversification, its efforts to improve the business environment, and the region's untapped potential.
The city's strategic location, growing economy, and business-friendly environment make it an ideal destination for foreign, regional, and local investors as well as the optimal gateway for expanding operations in the Middle East and Africa. The Salalah Port expansion project and the Salalah Free Zone are among the leading projects and locations that present promising investment opportunities in Salalah. With the government's support and commitment to economic diversification, Salalah is poised to become a leading investment destination in the region and warmly welcoming investors to explore the untapped potentials in the ocean of opportunities.
Dr Yousuf Hamed al Balushi
yousufh@omaninvestgateway.com
www.omaninvestgateway.com
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