Overview
Investment in Oman’s manufacturing sector totals USD 12 billion in active and pipeline projects, reflecting both sovereign and private capital deployment. The sector’s GDP contribution of ~9% is targeted to reach 15%+ by 2040, requiring sustained capital inflows across the investment pipeline. Deal flow has accelerated since 2020 with Vision 2040 providing a clear policy framework for investor confidence.
Key Indicators
| Indicator | Current | 2040 Target |
|---|---|---|
| Total Investment | USD 12 billion in active and pipeline projects | Growing |
| GDP Contribution | ~9% | 15%+ |
| Key Investors | Sohar Aluminium, Raysut Cement, OQ, Oman… | Diversifying |
Analysis
The investment landscape for manufacturing in Oman is shaped by a combination of government-led strategic investments and growing private sector participation. Sohar Aluminium, Raysut Cement, OQ, Oman Cables, A’Saffa Foods represent the core investor base, with increasing interest from international institutional investors and sovereign wealth funds. The Oman Investment Authority (OIA) has prioritised the sector in its portfolio rebalancing strategy. Foreign direct investment is facilitated through free zones, tax incentives, and streamlined licensing processes. However, deal sizes remain modest compared to UAE and Saudi equivalents, suggesting room for growth.
Challenges
Capital mobilisation faces headwinds from 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
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. Green and sustainable financing instruments (sukuk, green bonds) represent an emerging channel for sector investment.
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.