$100M Chemicals Project in Salalah: Implications for Investors and the Downstream Industry in Oman
MUSCAT: A significant investment of $100 million has been announced for the Salalah Free Zone, spearheaded by Deepak Oman Industries LLC, a subsidiary of India’s Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL). This initiative aims to foster the development of a chemicals-based industrial ecosystem in Oman’s Dhofar Governorate.
Last week, Deepak Oman Industries signed a long-term offtake agreement with OQ Base Industries (SFZ) SAOG (OQBI), a subsidiary of OQ Group, to secure ammonia from OQBI’s integrated petrochemicals complex in the Salalah Free Zone. This agreement ensures a ten-year renewable supply of ammonia, facilitating the establishment of a new plant dedicated to producing sodium nitrite and sodium nitrate, with an estimated investment of around $100 million. The plant is expected to achieve a production capacity of approximately 70,000 tonnes per year, with its output targeting the pharmaceutical and specialized fertiliser sectors.
Ali al Lawati, Chief People & Technology Officer at OQ and Chairman of OQBI, noted that this investment marks the entry of specialized chemical manufacturing into Oman’s industrial landscape. “By connecting this facility directly to OQ Base Industries’ ammonia production in Salalah, we are solidifying a higher-value segment of the chemical chain within the country,” Al Lawati stated.
He added that OQ’s integrated ecosystem serves as a cohesive industrial platform, aligning feedstock, logistics, infrastructure, and industrial land to minimize risks and ensure a stable supply, thus enabling downstream manufacturing to expand confidently.
The Salalah project is anticipated to create approximately 150 direct job opportunities, promoting the development of specialized skills in the region. It will also lay the groundwork for further downstream industries, increased participation from small and medium-sized enterprises (SMEs), and more resilient domestic supply chains.
Earlier, Ihsan al Jandal, Chief Operating Officer of OQBI, highlighted in a filing to the Muscat Stock Exchange that the offtake agreement demonstrates OQBI’s dedication to supporting Oman Vision 2040 by promoting industrial diversification and localizing value chains within the Sultanate’s petrochemical sector. “This agreement further illustrates OQBI’s ongoing efforts to enable sustainable growth, enhance in-country value, and strengthen strategic partnerships across Oman’s energy and industrial landscape,” he added.
DFPCL, the parent company of Deepak Oman, is a well-established producer of various industrial chemicals and agricultural fertilizers. Over the past 45 years, it has transformed from being an ammonia manufacturer into a multi-product conglomerate, operating multiple manufacturing facilities across several Indian states, supplying products such as nitric acid, methanol, technical ammonium nitrate, and various specialty fertilizers to both domestic and international markets.
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The $100 million investment by Deepak Oman Industries in Salalah signals a significant shift towards a chemicals-based industrial ecosystem in Oman, presenting new opportunities for businesses looking to engage in specialized manufacturing. This initiative not only creates 150 direct jobs but also enhances the potential for downstream industries and SME participation, making it an attractive landscape for entrepreneurs and smart investors. However, stakeholders should remain vigilant about the long-term sustainability of supply chains and market dynamics as these new developments unfold.
