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Riding on good location to develop ports and more

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The Port of Salalah is currently expanding capacity at its general cargo terminal to cater for expected future increases in demand. It is Oman's biggest port and main shipment centre.

OMAN has excellent port and logistics infrastructure that it has developed with an eye to the future. The Sultanate has two well-developed ports at strategic locations on the main East-West trade routes, with good air connections as well.

Oman's main cargo ports of Salalah and Sohar are seen as the region's best located ports to serve the Middle East, Indian subcontinent and East Africa markets.

The APM Terminals-managed Port of Salalah began operations in 1998 and is currently expanding capacity at its general cargo terminal (GCT) to cater for expected future increases in demand. It is Oman's biggest port and main shipment centre. APM Terminals also has a 30 per cent stake in the port.

The Port of Salalah comprises a container terminal with seven berths of up to 18-metre draft and the GCT with 14 berths of up to 18m draft.

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To meet increasing demands at the GCT, a new general cargo and liquid bulk jetty was built by the government at a cost of RO55million (S$194 million). The new facilities feature a quay length of 1,266m and a draft of 18m.

The port offers one of the fastest transit times from the region to connect businesses to the Asia-Europe trade lane, with 52 direct-port connections and feeder connections to reach developing markets of East Africa, India and the Gulf Cooperation Council (GCC) markets.

The Port of Salalah also receives cruise ships, with some 25 port calls bringing in 32,000 tourists in 2016.

Between 1998 and December 2016, the port handled over 45 million twenty-foot equivalent units (TEU) and over 85 million tonnes of cargo at the GCT. With the development of new berths, capacity will rise to about 20 million tonnes per annum.

Meanwhile, the container terminal has an annual capacity of 5 million TEUs. In 2016, the port handled 3.3 million TEUs as well as 13.3 million tonnes of bulk cargo. It was 44th among the top 100 container ports globally, receiving some 3,000 vessels a year.

The Port of Salalah is also a well-integrated facility, with seamless connections between the port, free zone and Salalah Airport. It can handle sea and air logistics through to Salalah Airport, which is 15 minutes away from the port, enabling good intermodal connections from its frequent liner calls.

Adjacent to the port, the Free Zone of Salalah offers facilities with 30-year tax exemption and 100 per cent ownership. Businesses can also benefit from the advantages that the United States-Oman Free Trade Agreement offers, in the form of zero to minimum tariffs on trade between the two countries.

Among the companies operating at Salalah Port and its Free Zone are those specialising in bulk commodities such as cement, minerals, limestone, wheat, methanol, liquids, construction materials and other raw materials used in manufacturing plastics, car parts and clothes. Meanwhile other companies specialising in logistics and freight forwarding use Salalah Port as their port of choice due to its efficient supply chain and transportation links.

The relatively newer Sohar Port and Free Zone has taken advantage of its good location to develop rapidly as a logistics hub. Since starting operations in 2004, the region's youngest port has grown to handle an average throughput of over one million tonnes of cargo per week last year.

Container volumes in the second quarter of 2017 were up by 11 per cent year on year and overall throughput at the Hutchison Ports-managed Sohar terminal has tripled over the past five years, in line with added investments to increase efficiency.

With more lines from Asia making direct calls at Sohar on ever larger vessels, the port is working together with Hutchison and other terminal operators to increase efficiency and help reduce costs at the new remote-controlled Terminal C.

These include an automated truck appointment system to reduce turnaround times, and new auto-gates, which reduce paperwork and speed up container collections which have been introduced by Hutchison.

Combined with the new port management system (PMS) in Sohar, an online platform that allows shipping agents to access and share realtime information on cargo movements, Sohar Port now ranks among the best equipped and most innovative ports in the Middle East.

Sohar has also bagged several significant projects recently. The region's first cotton yarn plant will be built in Sohar Free Zone, and will create another 1,500 jobs.

Meanwhile, the first phase of a major new oil storage facility is due to be built in the port by Singapore-based Trescorp Group. Investors see potential in the oil storage and services market here as it is still relatively undeveloped compared to more-established bunkering centres such as Singapore and Fujairah.

The potential for oil trading and storage activities in the Gulf is huge, as all growth forecasts far exceed the currently available capacity. These investments will also enable Sohar to achieve its ambition of offering a full suite of marine services including international standard bunker fuel.

Sohar Port is also planning to stay one step ahead by ensuring that land availability, infrastructure and power supply keep up with demand. For example, Sohar Port South is a significant land reclamation project that will add more land for industrial expansion in the port and more deep-water berths.

This includes a berth that has been specially designed to accommodate the largest 320,000 dwt very large crude carriers (VLCC).

Dry bulk cargo comprises a significant part of cargo throughput at Sohar Port.

In the first half of this year it grew by 24 per cent compared to the previous corresponding period, making Sohar officially the largest bulk port in the Middle East and South Asia.

In 2016, the port welcomed over 2,600 vessels and despite the trend towards fewer and larger ships, it expects a 15 per cent rise in port calls to about 3,000 for the full year.

Unlike many of its regional competitors, Sohar does not position itself as a transshipment port. It is leveraging its 50 per cent joint venture partner, Port of Rotterdam, to build itself up as an industrial port.

With its neighbouring fast growing and seamlessly connected Free Zone the port is managed as a single entity, aiming to add value for industries that produce finished or semi-finished products.

In this way, Sohar has a part in the whole value chain, using imported feedstock and raw materials and turning them into goods that can then be exported back out through the port.

The long-term vision is for the sustainable growth of Sohar and the surrounding Battinah region of Oman.

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