SOHAR Port and Freezone has announced that it is set to follow in the footsteps of companies like Coca-Cola, after a deal was struck with Oman International Petrochemical Industry Company (OMPET) to build a fully renewable manufacturing facility that will produce close to 1.5 million tonnes of environmentally-friendly packaging materials. The plant will complement the port’s existing petrochemicals supply chain, and will feed into a global beverage industry that is currently valued at approximately US$1.3 trillion.



The agreement will see OMPET lease a 330,000 square metre plot at SOHAR for the production of 250 kilotons of Poly Ethylene Terephthalate (PET), which is used to manufacture bottles that are primarily used to package soft drinks and single-serve beverages. PET can also be recycled for use in producing anything from polyester clothing, to sleeping bag insulation and carpeting. Once fully operational the new facility will create 300 direct jobs and produce 1.1 million tonnes of PTA – the raw material used to produce PET.







In a further bid to ensure the long-term sustainability of the project, the OMPET manufacturing plant will be located next to Oman Oil Refineries and Petroleum Industries Company (Orpic) and will consume all of the paraxylene produced by Orpic’s Aromatics unit. Paraxylene is a key ingredient in producing fully renewable PTA and, together with a global distribution centre that will be also built, the OMPET plant is just one of five brand new facilities to be added to SOHAR’s petrochemical cluster over the next five years.

“We are delighted to have finalised a deal with OMPET to lease a significant part of the port for producing renewable packaging materials. Demand for PET packaging globally reached 12 million tonnes in 2010, and this will continue to grow to around 20 million by 2019,” said SOHAR Chief Executive Officer, Andre Toet.

“While the processes and technology to produce environmentally-friendly packaging have been around for some time, we believe that SOHAR possesses the raw materials, energy, and ideal location to capitalise on encouraging market trends, and produce and distribute it on a global commercial scale,” he added.

“Not only is it essential for the local economy that we continue to attract global players in growing markets, but the plant will also have extremely important implications for climate change and the environment.”

According to research published by leading food and beverage specialist FoodBev Media Ltd, a half-litre plastic water bottle uses as little as 9.2 grams of PET, nearly 40 percent less than the average amount just a few years ago. Lightweight PET bottles also require fewer raw materials to produce, less fuel for transport, and are still completely recyclable. Similarly, the manufacturing and transportation of PET containers has far lower greenhouse gas emissions and energy consumption than aluminium and glass alternatives.

However, one of the biggest values the plant will add to the economy will be the extent to which it replaces many of the foreign imports currently used to produce PET, with locally-sourced raw materials. The growth of supporting industries is also expected to multiply employment by five times the number of direct jobs created, and SOHAR CEO Freezone Jamal Aziz declared that the timing of the deal couldn’t be better.

“As well as bottles, PET can be used within electrical, automotive, and consumer appliance industries – many of which already have strong business interests in SOHAR. On top of that, the Gulf region is close to becoming a net exporter of PET products, and could soon have a surplus of 1 million tonnes,” Mr. Toet said.

“We want to be a contributor to that surplus, and to help Oman become a byword for high quality PET exports. As we continue to accommodate the commercial traffic from Muscat, we are also aware of the opportunities that will come as a result of increasing demand, particularly in the Gulf and Asia-Pacific.”

According to Global Business Intelligence, the demand for flexible PET bottles has been driven largely by FMCG and pharmaceutical industries, and grew at a compound annual growth rate of 7 percent over the last decade. Production is projected to grow by 6.4 percent, to 23 million tonnes by 2020, and almost half of this demand came from the Asia-Pacific. Global PET production was valued at US$29 billion in 2013.