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Frost & Sullivan Automotive & Transportation Program Manager Srinath Manda.

Frost and Sullivan: Planned investments in infrastructure and industrial development to drive logistics market growth in Oman

: Tuesday, August 12 - 2014 @ 12:04

The nascent transportation and logistics market in Oman will witness steady growth over the next five to seven years due to planned investments in logistics infrastructure and industrial development in the country. Widespread opportunities for integrated logistics service providers that offer end-to-end logistics solutions will arise in certain industries such as chemicals.

New analysis from Frost & Sullivan, Strategic Analysis of Oman’s Transportation and Logistics Market, finds that the market earned revenues of $7.87 Billion in 2013 and estimates this to reach $12.02 billion in 2017.

The study covers transportation, warehousing, freight forwarding, and value-added logistics services. Being a highly import-dependent economy, Oman will be particularly attractive for logistics providers that have a significant presence in the global freight forwarding business.

“Oman’s strong transportation and logistics requirements stem from its centralised location in the Arabian Gulf, which makes it a trans-shipment centre and an ideal gateway for goods moving to the interior parts of Saudi Arabia, United Arab Emirates and Yemen,” said Frost & Sullivan Automotive & Transportation Program Manager Srinath Manda.

To fulfil the needs of the logistics industry and consolidate the nation’s position as a premier logistics and transshipment hub, large-scale infrastructure projects, including Al Mazyounah Free Zone, Sohar Free Zone, Salalah Port, Muscat Knowledge IT City, and Duqm Special Economic Zone have been initiated by the Government. These special economic zones are also expected to encourage foreign businesses to set up operations in the country.”

However, there is a lack of skilled labour to support transportation and logistics businesses. Low domestic manufacturing activity for many industries is also limiting the opportunities for domestic logistics services. Further, the existing infrastructure is inefficient, especially in the suburban areas of Oman, reducing the time and cost-efficiency of logistic operations and, in turn, adversely impacting service providers’ bottom lines.

“Recognising these limiting factors, the Government of Oman has designed industrial expansion plans to diversify the economy of Oman and create manufacturing clusters to reduce the economy’s dependence on the oil and gas industry,” noted Manda. “These initiatives will lead to the much-needed growth of the domestic manufacturing sector and, thus, necessitate a host of logistics services to carry raw materials and finished products for domestic and international consumption.”

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Tuesday, August 12- 2014 @ 12:04 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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