A strategic location on the Sohar Industrial Estate and close to the newly developed Sohar Port, OPP’s new plant will act as a catalyst spurring a multitude of downstream industries.

OPP partnership demonstrates how the synergy of industries can bolster the economy and open opportunities to create a domino effect on growth

A new cylinder in Oman’s Sohar industrial engine is the emergence of Oman Polypropylene LLC (OPP). Its expansive new plant is a direct result of the government’s drive for diversification of the national economy and Omanisation of the workforce through its Vision 2020 action plan. Majority-owned by the government with involvement from GIC of Kuwait, IPIC of Abu Dhabi, and LG of Korea, the $313 million investment also reflects the movement towards forging international partnerships in the Sultanate.

‘We want to have as much value addition as possible from the crude oil and gas; it is going to create much more employment’

Strategically located on the Sohar Industrial Estate, Oman Polypropylene is in close proximity to the Sohar oil refinery and will open new horizons for the petrochemical industry in Oman, serving as a catalyst to spur a multitude of downstream investment, employment and business opportunities.

The Sohar Industrial Estate has the advantage of being close to polymer-producing plants and other service providers, thereby lowering logistics and overhead costs. Continuity and availability of raw materials and services such as natural gas, nitrogen, ammonia, methanol, compressed air, electricity, and steam provide added advantages and a competitive edge for downstream industries. This plastics park will also have access to the newly developed Sohar Port.

The port offers benefits to both the production and transportation of end products as well as in minimizing costs, and in doing so empowering investors to make the most of their resources.
Furthermore, the government is actively supporting the downstream industries by offering tax breaks, access to low-cost land and utilities, and providing loans on favorable terms.

MOHAMMED BENAYOUNE CEO of OPP

“We want to have as much value addition as possible from the crude oil and gas. The idea was to establish a center which can provide for and build on the downstream industries until we export final parts, rather than just crude oil and natural gas,” says OPP Chief Executive Officer Mohammed Benayoune. “That is where we feel the real juice is going to be. It is going to create much more employment than just the projects themselves.”

Polypropylene (PP) itself is the fastest growing thermoplastic polymer. Used in a wide variety of applications, from food packaging and laboratory equipment to automotive components and polymer banknotes, it opens a vast diversity of business opportunities. “The petrochemical business is a cyclical business,” Mr. Benayoune comments. “Today, I am glad to say, it is a sales market and is very much in our favor, so it is good for us. Because the demand is higher than the supply, it is not difficult to sell this versatile product.” From an environmental point of view, OPP takes its corporate social responsibility seriously, and utilizes every single grain of polypropylene for maximum benefit.

After the new plant’s imminent inauguration, it will produce 340,000 metric tons of polypropylene per year, of which around 40,000 tons will be for the local market, and will have two production lines allowing for greater flexibility. China is currently the company’s biggest consumer, taking 50 percent of its production.

Through LG, Oman Polypropylene also sells in the Indian subcontinent, the Middle East, Eastern Africa, Europe and a slight presence in South America. OPP’s plant will receive its feedstock from the Sohar oil refinery, and together they will market their products towards Southeast Asia, China and Europe. The following phase will be to see further expansion in the Indian market.

“Once we complete the major projects, we will concentrate more on the downstream sector, which will buy our polypropylene granules, melt them down and make all sorts of things,” says Mr. Benayoune. “If you look at Saudi Arabia, they have much more experience in this field and have had a longer time to develop it than Oman. The polypropylene industry created a large number of small companies with 15 to 200 or 250 people. Once we have more people here making everything from car parts to diapers and polyester bags, then we may see these emerge as the real creators. In Saudi Arabia, over a period of 25 years, over 70,000 jobs were created in the downstream polypropylene business alone. In Oman, we are looking to do the same thing. If we could repeat that experience, then it will be a big contribution to the Omani economy.”