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Oman's Sohar Freezone Seeking Packaging Sector

by Lorys Charalambous, Lowtax.net, Cyprus
19 January, 2015

Oman's Sohar Port and Freezone has announced that it is seeking investors to expand the variety of companies offering vertical supply chain solutions to the key industries in the zone, including packaging providers for its new dedicated agricultural terminal.

The free zone's officials said that it will take full advantage of the expansion of its petrochemicals industries in order to attract downstream plastics manufacturers to the logistics hub. It noted that Oman Oil Refineries & Petroleum Industries is developing a polyethylene and polypropylene plant to supply packaging companies interested in setting up operations in the zone.

Sohar Port was opened in 2002 and the free zone was established in 2010. The business incentives offered by the free zone include 100 percent foreign ownership, exemption from Oman's 12 percent corporate tax for up to 25 years, zero percent import and re-export duties, and zero percent personal income tax. The free zone is currently home to logistics, petrochemical, metals, and automotive clusters that feed downstream industries with iron, steel, plastics, rubber, ceramics, and chemicals, among other materials.

"With the planned construction of an agricultural terminal and anticipated influx of grain products that will accompany its completion, our aim is to attract new investment in food and food processing industries and create a cluster than can feed the region," the free zone's Executive Commercial Manager, Edwin Lammers, said during a recent trade show in Dubai. "Grain silos and a sugar refinery are already in the pipeline, and as this sector grows, the opportunities for packaging companies to serve multinational businesses will grow."

Lammers said that more than 1.5m tons of environmentally friendly packaging materials will soon be produced at Sohar Port and Freezone, led by Oman International Petrochemical Industry Company.

"The link between food and plastics is clear," Lammers said. "The global packaging industry will generate USD975bn in sales by 2018, and 60 percent of that will be created in the food industry. 30 percent of packaging is made from plastics, and 90 percent of the region's foodstuffs are imported. Much of this is pre-packaged elsewhere at a higher cost and our aim is to leverage our low-cost energy resources to reduce that cost."

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