DUQM IS IN THE PROCESS OF GETTING TRANSFORMED INTO A WORLD-CLASS INDUSTRIAL AND LOGISTICAL HUB, AND PORT OF DUQM IS ONE OF THE CENTERPIECES OF THESE DEVELOPMENTS. CAN YOU TALK ABOUT THE CURRENT STATUS OF PORT OF DUQM? WHEN IS THE PHASE ONE EXPECTED TO BE COMPLETED?
Construction is in full swing at Port of Duqm with the phase 1 expected to be completed by the end of 2019. Construction of all the terminals is getting underway. They include container terminal, liquid terminal, dry bulk facilities, and multipurpose terminal. In addition, we are also building our head office and gate complexes with facilities for ROP inspection, customs and the Ministry of Health.
For the current construction phase, we are erecting around 13 buildings and will be spending hundreds of million rials to finish the port. The construction of liquid terminal includes dredging and reclamation, jetty structure and topside facilities including product storage tanks, dry bulk facilities, pipelines, buildings and roads.
HOW WAS THE PORT’S PERFORMANCE IN 2016 AND THE FIRST HALF OF 2017? WHAT ARE THE MAJOR MILESTONE ACHIEVEMENTS?
The port which started its operations in 2012 has grown exponentially during the last couple of years. We started operations in 2012 on a very low scale. But there has been a steady growth over the years. The port posted a substantial growth in 2016 and we are continuing it in 2017 as well.
We are mainly focused on exporting minerals and importing project cargo as well as containers for Al Wusta region and more specifically for the oil and gas industry in the region. Although the port is not fully operational like the ones in Sohar or Salalah, it has crossed some significant milestones recently.
In 2017, we received the first containers from French shipping giant CMA CGM followed by the first container from Mediterranean Shipping Company (MSC). In addition, we are receiving big-size project cargos on a regular basis for PDO and BP. Another major milestone is the starting of minerals export from Al Wusta region.
This year we also started the first shipment of limestone from Duqm; this follows the successful exports in 2016 of dolomite, another mineral mined in the vicinity of Duqm. Another significant development is PDO’s five-year deal with Japanese supplier Sumitomo signed earlier in 2017 to supply piping for its drilling operations through Duqm. Although the container terminal will be commissioned only after 2020, the port is operating on an early container terminal.
Our capacity is 200,000 containers a year which is rather limited compared to the final capacity. However, we are able to cope with any type of container, whether it be standard containers or reefer containers.
LOGISTICS IS ONE OF THE MAIN PLANKS OF OMAN’S DIVERSIFICATION STRATEGY AND THE GOVERNMENT HAS RECENTLY COME UP WITH AN AMBITIOUS 2040 LOGISTICS STRATEGY. CAN YOU TALK ABOUT THE ROLE TO BE PLAYED BY PORT OF DUQM IN POSITIONING OMAN AS A FORMIDABLE HUB FOR REGIONAL TRADE AND AN IDEAL PLACE TO INVEST?
The creation of ASYAD will help further establish Oman as a serious logistics hub in the region and will boost our competitive edge. It will help improve collaboration and coordination in the sector and boost synergies between stakeholders. Obviously, we are fully integrated to the government‘s vision of economic diversification and are an essential component of its logistics strategy which is heavily relying on us like other two ports. Al Wusta region is very rich in minerals and oil and gas. But the region does not have a proper logistics hub catering to its economic potential. Therefore our primary role will be developing a logistics hub to complement the economic development in the region. You cannot sustain a manufacturing hub without having the means to import the raw materials and export the finished products.
In addition, on a national level, we are looking to identify the logistics requirements of Oman that are not currently being met by two other major ports: Sohar and Salalah. We can cater to these new requirements as we are the latest entrant and are still being constructed so that a lot of things can still be bent and a lot of new things can be built. We have identified some niche market logistics requirements which are not present in Oman.
The whole idea is to generate businesses that are not available in Salalah nor in Sohar but are there in our neighbouring countries.
HAS THE OIL PRICE FALL HAD ANY IMPACT ON THE INVESTMENTS AND ACTIVITIES IN PORT OF DUQM? WHAT ARE THE MAIN CHALLENGES FACING THE PORT?
Although we had suffered a delay in the past, things are running pretty smooth now. If you have been to Duqm recently, you can see that there is a frenzy of activities which are making up for any delay in the past. SEZAD is putting in tremendous efforts to sustain the projects, despite the economic slowdown.
There was a fear, but that fear has already been overcome and there has never been a massive impact. In addition, there is a national will and agenda for economic diversification and Duqm lies at the heart of it; therefore slowdown on a project like Duqm is not a good message.
The big challenge confronting us a few months ago was to continue the growth momentum despite the economic conditions. But SEZAD has proved to the country and investors as well that we have achieved that. Things are moving much faster than they did a couple of years ago. That is quite significant. But still there are challenges, because it is a new project and we are creating it from scratch.
We are now attracting the so-called early birds rather than established companies who will join once the free zone is set in motion. Attracting your first client is the real challenge. The advent of refinery is really significant, in reinsuring the market and convincing everybody that Duqm is happening. Despite the economic slowdown, we have witnessed a growth both in revenue and volume and in the number of ships we received. Our market and our volumes are growing, because for some types of industries using port of Duqm is actually cheaper. It is a win-win situation: they are saving money and we are increasing our trade volume and efficiencies.
WHAT IS YOUR FUTURE OUTLOOK?
We are quite optimistic and really going on the right direction. We are working with our clients to convince them that using the Port of Duqm is actually valuable for them as it helps them save money. The current economic situation is all about saving money. When they use the Port of Duqm, they have fewer kilometres to travel.
The low oil price is forcing the companies to be more efficient; and in order to be more efficient, they need to ease their logistics hurdles. Here, Port of Duqm comes in handy because of its strategic location in the middle of Oman. We are working with PDO to implement their new logistics strategy, aimed at concentrating their warehouses and distribution network. That makes them save a lot of money and millions of driven kilometres.
HOW IS PORT OF DUQM GOING TO CONTRIBUTE TO THE NEW MANUFACTURING DEVELOPMENTS IN DUQM SUCH AS THE CHINESE INDUSTRIAL PARK?
As an enabler of trade and business in the region, we are making the logistics easy and smooth for them, by helping source raw materials from across the world and exporting their finished products. It is our duty to serve the industries in Duqm in a fast and efficient way.
WILL DUQM TAKE OFF AS EXPECTED?
A mega project of Duqm’s stature will take time. Ports like Sohar or Jebel Ali were not built in five years. So Duqm will also grow steadily. But I am confident that the government of Oman is putting in place the right ingredients to build its new economic and logistics hub. There are a lot of potential that are not fully tapped in Duqm and they are going to be utilised in the future such as political and economic stability of Oman, the proximity to African markets etc. These elements are key for the investors. So as the machine started to roll, we need to promote ourselves, increase our visibility and win the credibility of more investors.