Overview
Oman’s manufacturing sector occupies a distinct competitive position within the GCC landscape. While the UAE and Saudi Arabia dominate in scale and investment volume, Oman differentiates through strategic location, competitive cost structures, and niche specialisation. The sector’s GDP contribution of ~9% positions Oman as a mid-tier GCC player with significant upside potential under Vision 2040.
Key Indicators
| Metric | Current Position | 2040 Target |
|---|---|---|
| Oman GDP Share | ~9% | 15%+ |
| GCC Rank | 4th-5th | Top 3 |
| Competitive Advantage | Cost, location | Quality, specialisation |
Analysis
GCC peer comparison reveals that Oman’s manufacturing sector benefits from lower operating costs than UAE and Qatar, a strategic geographic position bridging the Arabian Sea and Indian Ocean trade routes, and a less saturated market offering first-mover advantages in select sub-sectors. Sohar Aluminium, Raysut Cement, OQ, Oman Cables, A’Saffa Foods compete regionally through operational efficiency and government support. However, Oman trails in marketing sophistication, scale of infrastructure investment, and regulatory speed compared to Dubai and Riyadh. Integration with GCC economic convergence initiatives (customs union, rail connectivity) presents collaborative opportunities alongside competitive dynamics.
Challenges
Competing against larger GCC economies with deeper capital markets and stronger global brand recognition remains difficult. High energy input costs for non-subsidised operations, limited domestic supply chains, skill shortages in advanced manufacturing, competition from Saudi and UAE mega-factories, and reliance on imported raw materials.
Opportunities
Niche positioning, GCC supply chain integration, and bilateral trade agreements can elevate Oman’s standing. Downstream aluminium value addition (extrusions, cables), food processing for regional export, pharmaceutical manufacturing (Oman Pharma), building materials for GCC mega-projects, and defence manufacturing under the IKTIFA programme.
Vision 2040 Targets
Raise manufacturing GDP share to 15 percent; double non-oil exports; create 150,000 new manufacturing jobs; achieve 50 percent Omanisation; establish Oman as a GCC advanced manufacturing hub.