Sohar freezone signs agreement for $46m copper tube mill

Muscat: Four business houses are forming a joint venture to build a major copper tube mill with an investment of $46 million in Sohar free zone.
The promoters have signed a land lease agreement with Sohar port and free zone for using 35,000 square metres of land.
Construction will commence later this year and the plant is due for start-up by mid-2018, with full production scheduled by October 2018.
With a capacity of 15,000 metric tonnes of high technology copper tubing per annum, this latest addition to the burgeoning Freezone metals cluster will produce mainly inner-grooved copper tubes, as well as plain copper tubes. Both these products are widely used in the manufacturing of heating, ventilating, air conditioning and refrigeration systems.
Investments in the plant, that total around $46 million, are to be split between four main shareholders — Middle East Investment Company, Mohsin Haider Darwish Invesco, Hussain bin Salman Ghulam Al Lawati, and Al Habib Holdings. Once operational, the new plant is expected to generate 30,000 tonnes of copper throughputs at Sohar Port and another 35,000 square metres of landside logistics volume.
A further 30,000 square metres of land has been set aside to increase the plant’s capacity to 30,000 tonnes in the future.
The plant’s technology is most commonly known as ‘cast and roll’ and comprises of three distinct production stages. The raw materials, (copper cathodes) that are then formed directly into mother tubes, will be sourced from Iran or the local market.
Although the bear market in copper, driven by global oversupply and reduced demand in China continues to push global copper prices lower, this is yet another sign that Sohar is in the right place at the right time, according to Jamal Aziz, Sohar Freezone chief executive officer.
“As Oman and its GCC neighbours take active measures towards diversifying their economies, more investments are flowing into sectors such as infrastructure, real estate and hotels, driving significant demand for copper tubes in the construction industry; these tubes are the basic components for every freshwater and cooling system in the region.”
“It is estimated that the per capita value of the GCC’s construction industry will increase from around $2,000 in 2014, to well over $3,000 by 2020, and this latest plant in Sohar is ideally located to serve the region, thanks to our outstanding connectivity to Saudi Arabia and the UAE, as well as the Port’s proximity and our excellent ties to Iran,” Aziz added.