Indian companies taking the leap in making the most of this need gap, we are quite confident that given our unique propositions, strategic location, and excellent connectivity, we are going to attract a lot of big ticket investments from Indian companies, says Neelima Vyas, Chief Operating Officer, Sohar Freezone, in an interview with Sumantra Das.
Amid economic slowdown, what was the trigger for an industrial zone?
We decided to start developing Freezone Sohar some three years back to create an opposite move. Port of Sohar established in 2002 has created a lot of employment and by developing a Freezone with attractive incentives for foreign direct investment (FDI), another vehicle adjacent to the port was developed to create a captive market and more employment.
What is the impact of the Dubai financial crisis?
The port has seen impressive growth figures even during the first financial crisis and the second world crisis. The image below explains this:
What are the incentives investors can get from Sohar Freezone?
Sohar Freezone offers some exciting and unmatchable incentives to all its investors that include but are not limited to:
• A highly skilled and cost-competitive labour force
• 100 per cent freedom to hire people from anywhere
• Many years of experience in supporting large and complex manufacturing, storage and handling benefits
• 100 per cent foreign ownership and free repatriation of capital and profits
• Corporate tax holiday up to 25 years
• Relaxation in level of Omanisation 5 per cent duty
• Sales to GCC market allowed on payment of 5 per cent duty
• All permits and consents are granted by One-Stop-Shop operated by the Sohar Freezone authority, which saves investors from unnecessary logistical hassles and helps them concentrate on setting up their business
• Highly personal approach
These are some of the other key factors that are designed to attract big ticket investments from India.
As several projects are getting delayed in India, do you think Indian companies may look out for other areas like Sohar Freezone?
I would look at it from another angle. As more Indian companies spread their wings, expanding their global footprint and supplying their products across the globe, we at Sohar are well equipped and ready to cater to their growing needs. If you take the example of steel, India, the Middle East and China have accounted for more than 35 per cent of global steel demand and for more than half of its growth. In 2015, the demand-supply gap for semi-finished steel products in the Sohar market region is estimated to be around 45 million metric tonne - just in the Gulf region and the western part of India alone. And with ambitious Indian companies taking the leap in making the most of this need gap, we are quite confident that given our unique propositions, strategic location, excellent connectivity, we are going to attract a lot of big ticket investments from Indian companies.
Some of the benefits of Sohar Freezone are:
Strategic location: Located at the crossroads of Asia and Europe, Freezone Sohar and industrial port offers global connectivity and easy access to world markets. It forms the “Gateway Sohar” due to its proximity to the Sohar Airport and the upcoming railway network. It is also located before the Straits of Hormuz that help avoid increased insurance premiums and immediate access to the world’s shipping lanes.
Largest and most modern Freezone in the region: Designed to be spread over 4,500 acre when fully developed, The Port of Sohar and Sohar Freezone are one of the economic mega-projects of Sultanate of Oman. Out of these, 500 hectare is being developed in the first phase, following a carefully developed cluster approach.
Modern logistics and warehousing: The most modern warehousing and logistics handling facilities are available at Sohar and it also serves as an excellent base to distribute products to a customer base of nearly two billion consumers. Additionally, Freezone Sohar is also developing a 40,000 sq m logistics park that is dedicated to warehousing, cold storage and third-party logistics providers.
What is the cost rationale?
We offer services and land at very competitive costs. Labour costs are also quite reasonable at Freezone Sohar. Other than this, the advantage of the One-Stop-Shop that manages all permits, licensing and formal paperwork, helps in saving valuable effort and time for the investor. It therefore, takes very little time to set up operations in Sohar and helps give returns in good time. Also as I have mentioned before, there are a host of attractive incentives and sops that are designed to lower operating and establishment costs and bulk up the respective companies’ bottom lines.
What is the response from Indian companies?
We have received a phenomenal response from Indian companies. With bilateral trade between India and Oman touching $5.2 billion in 2010-11 and with over 1,527 Omani-India joint ventures across 13 socio-economic sectors, Freezone Sohar is confident that the strong business ties between the two countries will generate active interest amongst Indian companies to invest in the Freezone. While large Indian companies like Jindal Steel & Power, Larsen & Toubro, INDSIL, and Metkore already have a significant presence in Sohar, several other companies like Alma Cabrol and Dunes, Container Solutions amongst others are in the process of setting up their presence there. The Freezone has already received investments from India worth $125 million and we are expecting investment worth $250 million from Indian corporates in the next two years.