Overview
Oman’s manufacturing sector accounts for approximately 9 percent of GDP, anchored by heavy industries such as Sohar Aluminium (390,000 tonnes/yr), Raysut Cement, OQ petrochemicals, and a growing base of downstream plastics and food processing. Vision 2040 targets raising manufacturing to over 15 percent of GDP through import substitution, export-oriented production, and integration with free zone ecosystems.
The value chain for Oman’s manufacturing sector encompasses upstream inputs, midstream processing and logistics, and downstream distribution and export channels. Mapping this chain reveals critical nodes where value addition can be maximised and leakage to imports can be reduced.
Key Indicators
| Indicator | Current | 2040 Target |
|---|---|---|
| GDP Contribution | ~9% | 15%+ by 2040 |
| Aluminium Output | 390,000 tonnes/yr | 500,000+ tonnes/yr |
| Omanisation Rate | ~38% | 50%+ by 2040 |
| Non-Oil Industrial Exports | ~USD 8B | USD 20B+ by 2040 |
| Manufacturing Employment | ~90,000 | 240,000 by 2040 |
Analysis
The manufacturing value chain in Oman is characterised by significant upstream concentration, with Sohar Aluminium, Raysut Cement, OQ, Oman Cables, A’Saffa Foods dominating primary production. Midstream processing and logistics represent the largest opportunity for value capture, as much of the raw output is currently exported with minimal transformation. Investment of USD 12 billion in active and pipeline projects signals strong commitment to building out downstream capacity. The sector employs ~90,000 direct workers, though value-chain deepening could multiply employment effects significantly.
Challenges
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.
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.