Gateways to future growth
Asyad is working to turn Oman’s logistics assets into attractive opportunities for investors, to secure trade volumes for the industry and to maintain business growth
Ports are becoming game-changers for the Sultanate’s long-term economic growth, with the government and policy makers identifying the potential of the logistics industry to supplant the hydrocarbon sector as the nation’s economic mainstay. Through an ambitious ‘the Sultanate of Oman Logistics Strategy (SOLS) 2040’, the government of Oman is looking to boost investments in its transport and logistics sector and double the employment in the sector to 80,000 as well as its GDP contribution to RO3bn by 2020. Oman Global Logistics Group (rebranded as Asyad in June 2017) was formed to consolidate state holdings in the country’s seaports, free zones, and maritime and land transport companies- will be responsible for implementing SOLS.
Asyad has two primary mandates; the first is to maximise returns on the government’s investment in ports, freezones and transport companies. Secondly, Asyad is responsible for executing SOLS with the vision to build a competitive logistics sector as an instrumental contributor to the national GDP. SOLS’ vision will be achieved through facilitating trade and enhancing regulations; building world-class infrastructure; leveraging technology as a disruptive enabler and building human capacity and skills, which will not only attract business and investors, but will also improve the sector’s ranking in global indices such as the Logistics Performance Index (LPI).
Oman has three major ports, strategically located in Sohar, Salalah and Duqm; each has its own unique offering and selling proposition. They are getting kitted out either with massive infrastructure development (Sohar and Duqm) or with new business development strategies (Salalah) to meet the new expectations. (Parenthetically, Sultan Qaboos Port in Muscat which was converted into a tourism port is undergoing an amazing metamorphosis worth billions of rials).
Sohar is emerging as one of the region’s prime logistical hubs. Sohar Port and Freezone is a remarkable infrastructure development not just for Oman, but for the entire region. Not only has it seen consistent year-on-year growth since it was fist established, attracting investments totaling more than $25bn to-date, but also it is a key aspect of the Oman government’s national logistics strategy.
The Port of Salalah, the largest port in Oman, continues its aggressive focus on retaining and growing the existing business. Meanwhile, the port is implementing its overall strategy to reduce reliance on the transshipment business on the container terminal side and on limestone and gypsum exports in the general cargo side. While transshipment of containers and handling of aggregates are expected to form the core of the business in the near term, there are a number of initiatives and projects at various stages of discussion that will leverage the existing connectivity of Salalah and its location and also reduce the overall reliance of the transshipment business.
Construction is in full swing at Port Duqm with the phase 1 expected to be completed by the end of 2019. A lot of infrastructure development projects are being implemented in and around the port. Construction of all the terminals is getting underway. They include container terminal, liquid terminal, dry bulk facilities, and multipurpose terminal.
Before introducing the Asyad umbrella, each port was marketing its services independently- missing out on the opportunity of joining forces to offer a more comprehensive value proposition, deliver a full-suite solution and cater to different needs of the market.
Abdulrahman Salim Al Hatmi, Group CEO of Asyad, says: “Today, Asyad team is working on a business plan to identify the value proposition of each port. The Group’s role is to harness collective integration, connectivity and positive competitiveness among Omani ports. And it aims to turn its logistics assets into attractive opportunities for investors, to secure trade volumes for the industry and to maintain business growth.
On the freight side, Oman Rail Company, Oman Shipping Company, Oman Drydock Company are under Asyad’s purview. The Group has a two-pronged plan – one is to integrate the current portfolio of services including Oman Shipping, Oman Rail – in the future – and the trucking business, which will support assets and companies run by the private sector. This integration will result in providing its customers with an all-encompassing solution, making it more convenient and more efficient for them to do business in the Sultanate.
“Asyad also has a mission to grow and acquire business internationally by offering its services in logistics and freight outside Oman. The Group is studying the possibility of buying freight-oriented companies to complement our operations and solidify our competitive advantage,” Al Hatmi adds.
There has been some tangible results in the development of logistics sector during the last four years since the strategy came into being. For example, Oman’s rank on the World Bank’s recently released Logistics Performance Index (LPI) saw an improvement of 16 positions from 59 to 43. Such a jump is not possible without the multi-layered plan Asyad has designed and started implementing, from modifying regulations and procedures; to streamlining operations and governance; and to harnessing connectivity and integration of logistics assets.
Oman showed marked improvement in the efficiency of customs services and timeliness. These improvements drove Oman’s continued climb up the international rankings. Key initiatives that have contributed to Oman’s improved ranking include establishment of the border One-Stop-Shops for joint inspections, new rules for Bonded Warehouses, Introduction of the Authorised Economic Operator programme, Pre-Clearance of Goods by Customs and Risk-based import controls.
Other initiatives include preparations to join the International Road Transport Convention, enhancing partnership between public and private sectors through focus groups and forums and formation of the Oman Logistics Association to represent the interests of the logistics sector.
To further strengthen its logistics capabilities, Oman has introduced world-class guidelines and systems to make logistics an appealing profession for Omani youth and to attract international investors. The government’s logistics awareness programme aims to guide university and college students undertaking academic and applied research to address the needs of Oman’s logistics sector. The sector had 30,000 jobs when Oman started implementing the strategy. The total number of jobs in the sector went up to 84,000 which include 54,000 jobs created over the last four years.
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