Oman Courts Investors for New Aluminium Cluster: What This Means for Business Growth and Opportunities
MUSCAT – Building on the success of its polymer-based Plastics Cluster at Suhar Industrial City, Oman is advancing plans to establish an Aluminium Processing Cluster anchored by a large-scale primary aluminium smelter in the port city of Sohar.
This initiative is led by the Ladayn Programme, which has previously driven the development of a downstream plastics and polymer hub in Suhar, supported by cost-competitive feedstock from OQ Group’s Liwa Plastics. By the end of 2025, the Plastics Cluster had attracted investments exceeding RO 85 million across 27 projects.
Inspired by this achievement, Oman is now focusing on creating a dedicated Aluminium Processing Cluster downstream of Sohar Aluminium’s smelter, situated in the adjacent industrial zone.
Similar to the Plastics Cluster, the aluminium cluster’s implementation is coordinated by Ladayn, an entity that brings together key stakeholders including the Ministry of Commerce, Industry and Investment Promotion, Madayn (Public Establishment for Industrial Estates), OPAZ (Public Authority for Special Economic Zones and Free Zones), and OQ Group, with support from initiatives like Nazdaher.
To attract international investors, Ladayn recently organised an investment forum in New Delhi, hosted by the Embassy of the Sultanate of Oman. The event gathered Indian industry leaders, investors, trade bodies, and strategic partners to explore opportunities across Oman’s aluminium value chain, such as rolling, extrusion, fabrication, automotive components, packaging, and construction materials.
Officials highlighted Oman’s strategic geographic location, competitive energy costs, investor-friendly policies, and integrated logistics through major ports as key benefits for Indian manufacturers seeking global expansion and cost efficiencies.
Adding to this appeal is the Oman-India Comprehensive Economic Partnership Agreement (CEPA), which provides nearly universal zero-duty access, replacing previous Most Favoured Nation tariffs ranging from 0 to 5 percent. Officials emphasized that CEPA will boost industrial collaboration, especially through joint ventures targeting Gulf, European, and African markets.
At the core of the cluster is Sohar Aluminium, one of Oman’s largest non-oil industrial ventures, established in 2004 with an investment of around $2.4 billion. Approximately 60 percent of its smelting capacity—395,000 tonnes per annum—is allocated to several downstream customers. These include Oman Aluminium Processing Industries (OAPIL), the country’s leading manufacturer of aluminium rods and overhead line conductors; Oman Aluminium Rolling Company LLC (OARC), producing flat-rolled aluminium products; Oman Aluminium Cast LLC (OAC), which specializes in high-current bus bars for smelters and electrolysis plants; and Synergies Casting Oman (SCO), which manufactures high-end aluminium alloy wheels for the global automotive market.
The Vision 2040 Unit, which initially conceived the cluster project, anticipates that an integrated approach will enhance competitiveness through improved efficiency and productivity. Furthermore, opportunities exist to develop supply chains and integrated logistics solutions to ensure effective transport and distribution between factories, according to a recent report by the unit.
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Oman’s strategic development of an Aluminium Processing Cluster, leveraging the success of its Plastics Cluster, presents bold opportunities for industrial diversification and value addition. With strong backing from government bodies and competitive advantages like cost-effective energy and strategic logistics, this initiative positions Oman as a key hub for aluminium manufacturing in the GCC region. Smart investors and entrepreneurs should consider aligning with the cluster to capitalize on integrated supply chains, robust export potential, and the benefits of the Oman-India CEPA for seamless market access.
