Mid-scale industrial ventures in the China-Oman Industrial Complex — a mega development envisioned at the Duqm Special Economic Zone (SEZ) as part of Beijing’s ambitious global Belt and Road Initiative (BRI) — are finally beginning to take off.
In the second quarter of this year, the first industrial investment implemented in this sprawling complex is set to be brought into operation. Duqm Hongtong Piping LLC’s plant will commence production of Reinforced Polyethylene Pipes (RPP) with an eye on domestic, regional and international markets.
Although initial investment in the project is a modest $6 million, Duqm Hongtong Piping is the only plant of its kind in the Sultanate. Its looming launch also bodes well for new investment inflows into the China-Oman Industrial Complex planned on a 11.72 sq kilometre site within the SEZ at Duqm.
First unveiled in 2016, the industrial park is proposed to host a diverse slate of petrochemical, refining, heavy and light industrial units, renewable energy schemes, and e-commerce and logistics projects totalling over $10 billion in investments.
In an interview published in the latest edition of Duqm Economist, the newsletter of the Public Authority for Special Economic Zones and Free Zones (OPAZ), Duqm Hongtong Piping’s General Manager, Dr Shao Longnan, said the plant, which is nearing completion on a 60,000 sq metre site, is a testament to Sino-Omani bilateral ties as well as Duqm’s strategic importance.
“We decided to invest in Duqm, as a promising investment destination in Oman, to serve the SEZ and the oil and gas companies in the nearby concession areas,” the newsletter quoted the General Manager as stating.
“Another good reason to bring our investment into Oman is the strategic geographical location of Duqm and its proximity to the GCC and African markets. The promising future of the SEZ and its potential status regionally and internationally will play a key role in attracting more businesses and projects, particularly from China.”
The plant has a capacity to produce around 1,200 kilometres of non-metallic pipes suitable primarily for the oil and gas industry and specifically for the transport of hydrocarbon fluids through piped networks.
However, with further upgrades, the plant can be scaled up to achieve a three-fold increase in output, as well as introduce a range of thermo-polyethylene pipe systems for use in water and gas distribution networks, civil engineering, sewer water treatment, and other applications.
Plant officials also see the project’s piping systems as serving as high-quality, locally manufactured substitutes to imported products, thus contributing to In-Country Value (ICV) objectives, as well as helping conserve foreign exchange outflows through import substitution.
Indeed, the ICV component of the project’s supply chain is expected to climb to over 90 per cent when the plant begins sourcing its raw material requirements of polyethylene from Liwa Plastics, the wholly government-owned petrochemicals scheme, which was recently brought into operation at Sohar Port.
As the only plant of its kind in the Sultanate to manufacture long-length reinforced thermoplastic pipes, Duqm Hongtong is hopeful of meeting at least 15 per cent of the country’s domestic requirement of RPP pipes.
Buyers of the locally produced piping systems enjoy a 40-per cent cost advantage over imported alternatives by saving on shipping and transportation, according to the officials.
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