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Duqm News

Asyad Business Opportunities Forum Duqm, 11/07/2018

ASYAD would like to invite SMEs and Local Vendors to be part of our growth journey & attend Business Opportunities Forum by Oman Drydock Company. 

Book your seat & apply at Asyad's website.

Oman gears up for shipbuilding at Duqm yard

Wholly government-owned Oman Drydock Company (ODC) — a subsidiary of ASYAD Group — is preparing the groundwork to scale up its capabilities with the goal of venturing into shipbuilding for the first time in the nation’s modern history.

The announcement came against the backdrop of ODC’s participation in ‘Posidonia 2018’, the world’s leading expo of the global shipping industry, which concluded in Athens — Greece recently.  “Our aim is to be the first choice for ship-owners for ship repair and conversion operations of commercial tonnage and naval vessels, as well as the offshore industry, not only in Oman, but the entire Middle East, and with a strong order book and promising year ahead, we are in an advantageous position,” said Said bin Hamoud al Maawali, the newly appointed CEO of Oman Drydock Company.

“But our plans do not stop there. In a strategic move to continue the evolution of our operations and given our location, facilities, skill-set and the continuous commitment to deliver excellence, we are now looking at entering the world of shipbuilding,” he added in a statement highlighting ODC’s near-term ambitions for business growth. Since it commenced operations in 2011, ODC — which is located within the Port of Duqm — has handled more than 570 vessels. While the large majority of these drydockings have involved ship repairs and maintenance, a growing number pertain to conversions – a specialist skill that the ship repair yard is looking to increasingly capitalise on.

Furthermore, in response to market demand, ODC has also put together expertise to offer both ballast water management system installation and scrubber retrofitting services, said Al Maawali.
Announcing ODC’s proposed foray into shipbuilding activities for the first time, he added: “Our shipyard has the capability and capacity to deliver small units such as OSVs, tugs and barges to the worldwide ship building market. We are confident in our experience and knowledge to deliver this. We have a plan and the demand is there.” 

The CEO was also quoted by a number of leading international maritime publications as saying that the company has drawn up a strategy for investing around $60 million towards upgrading the yard’s capabilities. 
It includes a plan for the addition of a floating dock — the first of its kind in Oman — catering to Post-Panamax size vessels, and which is expected to be deployed within six months of the government’s approval of the investment. Also envisaged are investments in a new floating crane of a capacity of around 3,000 tonnes, designed to enhance the capabilities of the yard’s two graving docks.

ODC’s shipbuilding debut will initially focus on vessels of less than 80 metres, with the company having already submitted bids for the construction of new tug boats, barges and small bulk carriers, the CEO was quoted as stating.

Four large-scale cement mills in Duqm by 2021

The Special Economic Zone (SEZ) of Duqm has been tipped to host a string of new cement mills which, along with a sizable investment planned in Suhar, is set to ramp up Oman’s cement production capacity exponentially.

Driving the strategy to upscale the Sultanate’s aggregate capacity for the production of cement — a strategically important commodity — is the Implementation Support & Follow-Up (ISFU) Unit, a task force set up under the auspices of the Diwan of Royal Court to oversee the timely execution of a number of initiatives designed to spur the nation’s economic diversification.

The goal, according to the ISFU Unit, is to bridge the gap between cement consumption and domestic production capacity — a gulf that is presently addressed by substantial imports. “The aim of the initiative is to increase the local production of cement.

The outlook for the Sultanate for the growth of this industry remains positive as the government has been rolling out infrastructure projects as part of its economic development plans. Moreover, Oman is rich in minerals needed for the cement industry such as limestone and gypsum,” the Unit said in its newly published Annual Report 2017.”

According to the report, the Sultanate “witnessed a gap between the consumption and demand for cement” since 2006.
“Of the total demand of 9 million metric tonnes (MT) of cement in 2015, 54 per cent was met through imports, and the remainder 46 per cent was produced from the local plants. The initiative intends to ensure that the country produces its own cement and reduces the reliance on cement imports.”

In all, four large-scale cement mills are envisioned for implementation in Duqm SEZ. When operational, they will offer around 5 million tonnes of new cement capacity in the SEZ alone by 2021.

Notable is Al Taj Cement, which is investing in a 2 million MT capacity cement plant with backing from Iraq-based Al Yamama Engineering Co. Commercial operations are slated by the fourth quarter of 2020.

Also in the works is a new white cement plant, which will help dramatically reduce Oman’s longstanding dependence on imports covering a substantial part of demand for this commodity — used primarily in the construction industry. Imports averaging 78,200 MT in 2017 are expected to soar to 98,700 MT by 2026. The wider GCC is itself a net importer of white cement, having procured around 587,000 MT of the product in 2017 — a figure set to rise to 726,000 MT by 2026.

The Ministry of Commerce and Industry is currently studying the feasibility of establishing a 900 MT per day capacity white cement plant in Duqm. “Based on the results of the feasibility study, the Ministry of Commerce and Industry will prepare a full opportunity package and look for a potential investor,” ISFU said in its report.

Also making headway is the partnership of Oman-based Al Anwar Holding SAOG (40 per cent) and Hormozgan Cement of Iran (60 per cent), which plans to establish a cement-grinding unit with a capacity of around 1 million MT in Duqm. Land for the project has already been allocated, with commissioning targeted by early 2020.

Rounding off the list of new cement investments in Duqm is Al Wusta Cement — a JV of local cement manufacturers Oman Cement and Raysut Cement. The JV is looking at developing a 1.75 million MT capacity grey cement plant, for which a land usufruct agreement has already been inked with SEZAD.

The partners are currently updating a feasibility study into the venture, upon the completion of which both sides will initiate the groundwork for the necessary permits, financing and other project requirements.

China's Wanfang to establish building materials market in Duqm Special Economic Zone

Chinese company Oman Wanfang has signed a partnership agreement with two Omani companies to establish a building materials market in the Special Economic Zone in Duqm, local media Times of Oman reported Monday.


According to a statement issued by the Duqm Special Economic Zone Authority, the market will be jointly developed by Oman Wanfang, developer and operator of the China-Oman industrial park in Duqm, Al Thabat Holding company, an investment company active in infrastructure activities, and Oman Company for the Development of Special Economic Zone at Duqm.

The three companies will establish a joint venture named Duqm Building Materials Market Company, where Oman Wangfang will hold a 51-percent stake.
The project includes the development of land, main warehouses, and retail space areas for building material companies from around the world, especially the Middle East and East Africa, to showcase, store, market and sell their products in Duqm.

The building materials market, covering an area of 250,000 square meters, is scheduled to start the first phase of construction before the end of this year.

Oman Wanfang, a subsidiary of Wanfang China from the Ningxia Hui Autonomous Region of China, is developing the 40,000-square-meter China-Oman industrial park in Duqm, about 600 km south of the capital Muscat, with a total investment of 10.7 billion U.S. dollars.

Can Duqm become the Arab world's next 'great city?'

The town of Duqm was once a sleepy outpost on Oman's central eastern seaboard. Located roughly 330 miles south of the nation's capital, Muscat, it has been home to fishermen and their families for generations.
But things are changing fast.
"The town is really growing a lot ... especially in the last year," says Vijay Handa, cluster general manager of the City Hotel Duqm, one of three new hotel chains catering to an influx of businesspeople.
"In the next four or five years, it's going to see even more people coming, with more building and more opportunity," he adds.
Duqm is earmarked as the site of a vast new container port, refinery and industrial zone that, it is hoped, will help move the country away from dependence on oil revenues.
A new international airport, tourist resort, fishing harbor and residential zone for a potential 111,000 people are also key components of the Duqm masterplan, which was initiated in 2011.
Population statistics for the town are hard to come by. But Oman's National Center for Statistics and Information reports that the population of the sparsely populated Wilayat ad Duqm province, which includes the town, doubled from around 6,000, in 2011, to just under 12,000, in 2017.
According to Stephen Thomas, CEO of Omani facilities management firm Renaissance Services -- which recently opened a $197 million housing facility in the town capable of accommodating 16,900 workers -- Duqm will become a "great city."
"Already, you can see the momentum coming," he says. "You can see the blueprint for this city."
South Korea's Daewoo Shipbuilding and Marine Engineering has been operating a dry dock, where ships and tankers can be repaired in Duqm since 2012. In a nearby area earmarked to become an industrial zone, Chinese consortium Oman Wanfang aims to invest $10.7 billion to develop a series of projects, including a power plant and SUV manufacturing plant. Ground was also broken on an oil refinery jointly financed by Oman and Kuwait in April this year.
A spokesperson for the Duqm Special Economic Zone Authority (SEZAD) told CNN that 230 companies had invested in Duqm since 2012 with thousands of new jobs created.

Build it and they will Duqm

Oman is not traditionally seen as one of the most prominent oil-producing Arab nations. The US Energy Information Agency (EIA) estimates it holds relatively modest reserves of 5.4 billion barrels of crude.
While that figure pales in comparison with the 266 billion barrels in Saudi Arabia and 158 billion barrels in Iran, Oman's oil sector accounts for 46% of its GDP, according to the CIA World Factbook.
The country aims to slash that figure to 9% of GDP by 2020.
Manufacturing, logistics and tourism are among the sectors Oman has identified as central to its post-oil future. Over 30,000 square kilometers (11,500 sq miles) of territory around the country has been designated as a nature and wildlife sanctuary to help attract eco tourists.
Oman sees its natural geography as a key advantage to its plans in Duqm, as well.
The town is marketing itself as a convenient location for major shipping routes that link growing economies in India, East Africa and beyond.
With Oman bordering Saudi Arabia and the UAE to the west, planners also see Duqm as an alternative entry and exit point for the region, should maritime routes in the Strait of Hormuz become imperiled.
The narrow waterway at the mouth of the Persian Gulf -- through which the EIA says 18.5% of the world's crude oil supply flows -- has witnessed a series of tense incidents between the US and Iranian navies in recent years.
Any escalation of tensions between Iran and its regional rivals Saudi Arabia and Israel could also impact trade.

A new Dubai?

Despite these geographic advantages, it may take time before Duqm reaches what the Omani authorities regard as its full potential, given the sheer scale of the projects planned. The second phase of the port's development, which is slated to feature further container terminals, is only expected to become operationalbetween 2025 and 2030.
A number of challenges also remain.
Initial plans to build a railway connecting Duqm with Saudi Arabia and the UAE were shelved as oil prices crashed in 2014. With Oman having less oil wealth to fall back on than its neighbors, much of the financing for the wider Duqm project will have to be sought from international investors as well -- although that doesn't seem to have been a problem thus far.
Giorgio Cafiero, CEO and founder of Washington DC-based consultancy Gulf State Analytics, states that Oman must also look at honing "the technical skills" for the specialized industries that Duqm will come to host.
That will require further investment in education and retraining for many Omanis.
But the country's reputation as a stable, peaceful nation that maintains good relations with its neighbors makes it an attractive "entry point to the Arabian peninsula" for maritime traders, Cafiero adds.
For Thomas, whose Renaissance Services has already bought up extra land so it has the option to expand its presence in Duqm, the town's potential remains unlimited.
He predicts it will be "transformational for Oman" and something that enables the country "to compete on logistics on a global scale."
When asked if it could even come to challenge the likes of Dubai, which hosts the huge Jebel Ali commercial port and has been transformed into a bustling megacity over the past 40 years, Thomas doesn't discount the idea.
"It won't happen in my time," Thomas says. "(But) I love the fact that that is the ambition (to build a great city).
    "Why not shoot for the stars and try and land somewhere great?"

    Duqm Refinery issues a “Notice to Proceed” to its EPC Contractors

    Following the Groundbreaking Ceremony of Duqm Refinery held at their project site on 26 April, officials have now formally issued a “notice to proceed” (NTP) to the contractors of the three EPC packages worth $5.75 billion dollar.
    The formal issue of the NTP signifies start of the project schedule of the construction work of the 230,000 bpd Refinery project. The project is expected to complete and be ready for startup 42 months from the issue of NTP.
    Initially, contractors will allocate resources to complete detailed engineering design work at their home offices where they will be joined by staff from Duqm Refinery.
    Jacobus Nieuwenhuijze, Project Director of Duqm Refinery, commented: “This truly is an exciting and important milestone for all of us, since it not only signifies start of construction work but also culminates the efforts put in by stakeholders to have the project reach this stage.” He further added: “the contractors and the project team have prepared themselves thoroughly to ensure a solid start of the project activities.” The commencement of the construction work of this key project will also trigger other direct and indirect benefits to Duqm and the region.
    Duqm Refinery’s EPC scope of work is divided into three separate packages. The scope of EPC 1 includes the process units of the Refinery, while EPC 2 consists of the utilities and offsite facilities. EPC 3 includes the product export terminal at Duqm Port, the Duqm Refinery dedicated crude storage tanks in Ras Markaz and the 80 km interconnecting pipeline from these crude tanks to Duqm Refinery.
    The contractors for the three EPC packages are:
    • EPC Package 1 (Process Units): Joint Venture of T├ęcnicas Reunidas S.A. and Daewoo Engineering & Construction Co., Ltd
    • EPC Package 2 (Utilities and Offsites): Joint Venture of Petrofac International Limited and Samsung Engineering Co Limited
    • EPC Package 3 (Offsite Facilities): Joint Venture of Saipem SpA and CB&I.
    The Duqm Refinery project is a 50/50 joint venture between Oman Oil Company and Kuwait Petroleum International. It is being established in the special economic zone of Duqm. It is a project that would synergize the area of Duqm and make it a viable and strategic energy hub in the region.

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    Duqm 1 is an online guide that gives full access to information on things to do and see in Duqm with detailed info such as maps, government entities, locals’ favourite restaurants, shops, hotels, tour operators and natural landmarks. Additionally, Duqm 1 brings readers all the latest Duqm news as it happens.

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