SOHAR Port and Freezone is becoming instrumental in the growth of Sohar as Oman’s industrial, logistics and manufacturing hub. Excerpts from an interview with CEO, Mark Geilenkirchen
How was your performance in 2018? And please give us a brief on the latest developments and major milestones in SOHAR Port and Freezone’s operations?
SOHAR had another great year in 2018. The volumes that went through our port went up and the number of ships also increased. We received almost 10 ships per day in 2018, totalling up to 3443 vessels.
The volumes went up to a total of 64 million tonnes. (For the non-logisticians: this is comparable to 640 million large refrigerators. If you put these in a long row, you cover 448,000 kilometres of road, so refrigerators 11 times around the world).
Signalling a positive start to 2019, SOHAR has already welcomed Mannesmann and Oman Maritime Waste Treatment in the port to ensure our growth continues.
The collaboration with Mannesmann will see the creation of Calcined Petroleum Coke (CPC) and Recarburizer Calcined Coke (RPC) plants on a 40ha of land at the Port. This is one of the first projects that will be built in the reclaimed area of the Port, and will add value to both the aluminium and steel industries within SOHAR.
The agreement with Oman Maritime Water Treatment will result in the construction of a full-fledged International Protocol of Marine Pollution (MARPOL-compliant facility at the port. This is being done to ensure that ship waste collection and disposal are carried out in compliance with global MARPOL standards.
As well, SOHAR has signed an agreement to replace existing tug boats. Five vessels that provide towage services for all the vessels entering and exiting the port will be replaced. The contract includes the supply, manning, management, operation and maintenance of these five boats on a 24-hour basis.
In a significant effort to tap into the Sultanate’s renewable energy potential, SOHAR Port and Freezone has entered into a land lease agreement with Shell Development Oman (SDO) in collaboration with Shell New Energies. The agreement will see the provision of clean energy solutions through the installation of solar photovoltaic (PV) projects, to meet energy demands of industrial tenants within SOHAR Freezone.
Sustainability is one of our key values at SOHAR and this partnership with Shell will create solar powered solutions that are the first-of-its-kind in the country. It also marks an incredible milestone and the first step in our proactive long-term programme to transform our 4,500-hectare development into a ‘green port’.
We hope that the changes we are implementing today will encourage current clients and future investors to adopt cleaner technologies and sustainable practices tomorrow.
Finally, SOHAR Port and Freezone have launched SOHAR Navigate, a unique online route planner, which provides information to find the best and most efficient way to transport container cargo globally via the port. The platform is the first of its kind in the region and will offer sea schedules to connect up to 550 ports worldwide. It is considered the most comprehensive route planner of its kind and capitalises on the technology of our partner, the Port of Rotterdam. We have designed SOHAR Navigate to suit our regional and global stakeholders and provide them with outreach, as well as a user-friendly means to locate the most efficient and optimal routes for their containers.
How is SOHAR Port and Freezone becoming instrumental in the growth of Sohar as Oman’s industrial, logistics and manufacturing hub?
Over the past year, SOHAR has not only witnessed growth in its capacity, but also in its physical size thanks to the SOHAR Port South expansion. In 2018, 50 hectares of land was added to the current capacity of 2,000 hectares in the first phase of the expansion and a further 200 hectares is planned to be added in the future. This significant development will ensure that we can attract even more interest in Oman as a logistics hub for the Gulf.
An achievement I am very pleased about is our partnership with Marafi Sohar to create and operate a new high-capacity mineral aggregate terminal at the Port. This development is expected to generate more market opportunities since SOHAR is ideally equipped to develop high-capacity aggregate facilities, especially when you consider most of the quarries producing mineral aggregate are in close proximity to the port. As a result, we can provide easy access for export, which is a great opportunity for development.
Apart from fuel products, the refinery in SOHAR also produces significant volumes of naphtha and propylene, which serve as feedstock for the adjoining aromatics and polypropylene plant.
Our deep-water berths also allow for raw materials such as iron ore to be easily offloaded, ensuring smoother primary and secondary production processes.
The Food Cluster at SOHAR has arguably been one of our most innovative projects, given the massive potential of the food industry both in upstream and downstream businesses. This project will drive further integration between the port and free zone complex as this cluster is to designed to offer an entire value chain of food processing and logistics support for the expanding multibillion-dollar regional food industry.
In addition to a new flour mill and grain silo complex, the SOHAR food cluster will also house a sugar refinery, with packaging and distribution facilities planned in the future.
The cluster will enable us to attract significant new business to SOHAR with a dedicated deep-water berth and agro-terminal for the fast and efficient movement of foodstuffs within the Port.
At the Freezone, agreements for warehouse units with Matrix Prime Logistics and J-Line Logistics will add a further 6,700 square metres (64 units) to the total current capacity of 13,000 square metres. Our goal is to establish a logistics cluster in the freezone, where transhipment and value-added logistics (VAL) can take place.
Similarly, SOHAR Freezone has also entered into a new partnership to develop a 58-hectare area to offer turnkey, readymade, built-to-lease logistics and light industrial units in various size formats, including box and flex-log. This will further help position SOHAR as a premier logistics hub in the region.
And how is your vision is aligning with the Sultanate of Oman’s national logistics strategy?
As part of the Asyad Group, established in 2016 to maximise the economic and financial returns from government investments in ports, freezones, land and sea transport and logistic services companies, we seek to play an active role in the nation’s vision to become a global logistics hub.
Earlier this year, we signed an agreement with Dredging International NV for the development of the first phase of SOHAR Port South. This expansion is vital for SOHAR and has been facilitated by our rapid growth and will be assigned almost exclusively for oil and gas-based investments. We expect to see a significant increase in trade flows to the Sultanate as a result, as it will encourage shipping lines to make more direct calls to the port, opening the doors of opportunity to a larger group of potential customers in the future. Oman is already experiencing solid growth in the food logistics sector and e-commerce so the rapid development of transportation infrastructure and modern warehousing equipped with IT, will be major contributors to that growth.
What is your future outlook?
We have many exciting new projects coming online in 2019.
To attract smaller players in cargo shipment, we are planning to promote the consolidation of shipping cargo in the Freezone, as many currently transport their cargo over land to other port destinations in the region. Providing more practical options for cargo consolidation will reduce unnecessary delays and helps increase cargo volumes.
Some of our larger projects include new ferrochrome smelters that are under construction in the Freezone. This will be accompanied by the second biggest antimony plant of its kind in the world, and the creation of the SOHAR Cotton Cluster.
We have also recently concluded an agreement for the creation of a petroleum coke calciner plant in the Freezone, where raw petroleum coke will be used as feedstock for downstream petrochemical industries.
As always, keeping in line with the SOHAR motto ‘It all starts here’, we are constantly seeking out new and innovative solutions for the benefit of everyone in and around SOHAR in order to sustain our rapid growth rate as well as a become known as one of the leading global integrated Port and Freezone complexes.
