Local content in the Sultanate of Oman has empowered Omani companies to achieve returns that contribute to stimulating the national economy, in line with "Oman Vision 2040." Efforts from all sectors have converged to increase the locally added value while providing facilities and incentives to achieve good rates in boosting local content, ensuring the growth of Omani enterprises and enhancing productivity to achieve high levels of Omanization and provide job opportunities for citizens.
Oman has surveyed a number of officials from the top governmental bodies involved in achieving added local value to highlight the benefits for small and medium enterprises (SMEs) and their contribution to developing local suppliers while leveraging new technologies for more sustainable investments.
Efficiency of Economic Sectors
His Excellency Engineer Badr bin Salem Al-Ma'amari, Secretary General of the Tender Board, stated that local content effectively contributes to driving the economic sectors within the Sultanate of Oman, thereby enhancing their efficiency and increasing the GDP.
The General Secretariat of the Tender Board, represented by the Directorate General for Local Content, has initiated efforts to raise awareness about the importance of local content within governmental entities and Omani society. This aims to positively reflect in offering various initiatives that enhance the efficiency of economic sectors and improve the trade balance through import substitution, increased direct investment value, and contributions to local industry localization, as well as creating jobs and increasing Omanization rates across various sectors.
His Excellency added that the establishment of a National Office for Local Content aims to enhance the efficiency of project implementation across various sectors and achieve national returns that stimulate the national economy, in line with "Oman Vision 2040." This will be achieved through presenting national policies and strategies related to local content in collaboration with relevant parties, developing plans, programs, and incentives for local content, and cooperating with various sectors and legislators to establish feasible laws and regulations. Additionally, it will involve preparing market analysis studies to identify local content opportunities and gaps to maximize local content.
The Secretary General of the Tender Board clarified that the office will work on creating a unified and comprehensive database that enables strategic decision-making and establishes mechanisms, criteria, and indicators to measure the efficiency of national local content in achieving developmental and financial goals. This also contributes to creating opportunities for SMEs and local companies, enhancing their competitiveness and role in the national economy.
Utilizing Technologies
Engineer Ghaleb Al-Hanai, Director General of Local Content at the General Secretariat of the Tender Board, indicated that the Directorate General for Local Content aims to achieve several objectives, including creating and developing local added value opportunities, enhancing implementation efficiency, and maximizing the benefits of government spending for SMEs while developing local suppliers. It also aims to leverage modern technologies for more sustainable investments and contribute to providing job opportunities for citizens, particularly through developmental projects, capacity building, and attracting investments, while promoting the culture and importance of local content within governmental entities and Omani society.
The Directorate is also responsible for setting policies, strategies, plans, programs, and incentives related to developing unified government procurement in coordination with relevant governmental entities. It will prepare local content requirements for privatization projects, contracts, procurement, and tenders in collaboration with the concerned parties to ensure compliance with these requirements, paving the way for necessary actions. This includes activating the role of SMEs in contributing to local content to enhance their competitiveness and role in the national economy, and establishing mechanisms, criteria, and indicators to measure local content and the contribution of government procurement to achieving developmental and financial goals.
Mandatory List of National Products and Services
Regarding the mandatory list of national products and services, Al-Hanai stated that the mandatory list is one of the tools for applying local content at the level of local products. There exists positive competition among companies to meet the local content conditions and include their products in the list to gain support through government procurement.
The list includes local goods and services produced within the country, with products being included upon meeting predefined criteria. The aim is to support these products by mandating contracting companies to use them in the projects awarded to them.
Through the implementation of the mandatory list, the Secretariat aims to achieve several core objectives: stimulating the economy for a sustainable national economy by supporting local industries, enhancing the value of local content, increasing the competitiveness of local industries and national competencies through continuous product development and quality improvement, and creating local investment opportunities that provide jobs for citizens.
Industrial Strategy 2040
Mazen bin Humaid Al Siyabi, Assistant Director General of Industry at the Ministry of Commerce, Industry and Investment Promotion, explained that the Ministry strengthens the national economy by providing a set of programs and policies that aim to increase the contribution of local content to the gross domestic product.
These programs are an integral part of the Industrial Strategy 2040, which aims to build a sustainable and competitive industrial sector. In this context, the Office of In-Country Value and Local Content was established at the Ministry of Trade, Industry and Investment Promotion, making the office one of the main enablers for leading policy-making and implementing programs and procedures related to trends in enhancing local content in the industrial sector, in coordination with all relevant authorities in the public and private sectors.
Al-Siyabi added: The programs of the Office of Local Added Value and Local Content focus on several main axes, the first of which is the program to enhance local added value in the industrial sector. This is done by applying the principles of enhancing local content elements to industrial projects, building partnerships between the public and private sectors, and amending regulations and policies. To encourage the use of local products and services.
The second program seeks to empower local manufacturers and suppliers by providing the necessary incentives and training to develop their capabilities, and applying smart incentive mechanisms to push them towards increasing their contribution to the national economy. The second axis focuses on empowering the Omani industrial product through a set of initiatives and policies aimed at increasing its competitiveness in the local and global market.
This includes giving preference to the national product in government and private purchases, providing logistical and marketing support for Omani products, and encouraging investment in industries that have high competitive potential.
Al-Siyabi pointed out: The implementation of these programs aims to achieve a set of strategic objectives, the most important of which is to retain the largest possible amount of industrial sector spending within the national economy, in addition to enabling local manufacturers to meet the growing local demand and increase exports, reduce dependence on imports, and build a diversified economy capable of facing global challenges. These programs also contribute to enhancing the role of small and medium enterprises in the national economy, and encouraging innovation, research and development.
Sustainable competitive market
Dr. Mohammed bin Nasser Al-Rawahi, Senior Director of Research, Development and Innovation at the Oman Investment Authority, said that the Authority, represented by the Directorate General of Local Added Value, works to maximize local content that includes local added value, research and development, innovation and social investment for the Authority's affiliated companies, while improving and building the capabilities and potential of the Omani workforce.
The growth of small and medium enterprises is also being enhanced and the process of research, development, innovation and social investment is being organized in order to contribute to the development of the local economy and the development of a sustainable competitive market for goods and services.
He explained that the Authority has focused during the past period on establishing clear governance that regulates all aspects related to local added value by issuing several policies and guidelines, most notably: the social investment policy, the procurement and tenders policy, the local added value guidelines, and the guidelines for research, development and innovation.
The doctor added: The Authority issued the first version of the mandatory list, which included a group of services and products that must be purchased from the local market, and included 103 products and services, 51 of which must have a Made in Oman certificate. The value of spending by the Authority's affiliated companies on the services and products included in this mandatory list amounted to more than 42 million Omani riyals last year, and the second version of the list was issued this year with the addition of more than 100 products and services.
He stated that a financing program of up to 250 thousand Omani riyals has been approved in cooperation with the Authority for Small and Medium Enterprises, to finance small and medium enterprises that have contracts with the Authority's affiliated companies.
The Supplier Development Program has also been launched, which is a program dedicated to developing the capabilities of local companies and developing their potential in areas where there are not many local companies. Regarding supplier development, Dr. Al-Awadhi said that by the end of last year, more than 20 small and medium enterprises were approved in the program, representing various sectors such as food, industry, information technology, logistics and air navigation. More than 25 business scopes for local institutions were also approved in the business allocation program in various sectors such as food, logistics and air navigation.
He pointed out that work has begun on a program to study the value chains of four sectors: food security, recycling, technology and energy, in cooperation with the Industrial Innovation Academy. The study aims to evaluate and analyze value chains to identify industrial opportunities, using supply chain data collected through various initiatives.
Manufacturing the first well drilling rig
Regarding the efforts of the Ministry of Energy and Minerals, Mohammed bin Awad Al Amri, Director of Local Content at the Ministry, said: The Ministry's efforts in local content have been embodied in many projects and initiatives since the launch of the local added value program in the oil and gas sector in coordination and continuous cooperation with various parties, whether in the public or private sector. The following are the most prominent achievements that have been made during the past year, including the implementation of a number of industrial projects with the necessity of taking into account aspects related to local added value. The following is a summary of the most prominent of these projects: Certification and approval of a facility for manufacturing chemicals within the Sultanate according to the required standards and specifications. In addition to manufacturing the first well drilling rig within the Sultanate, which is characterized by the automated handling feature of pipes, as it was manufactured using the latest technologies to provide efficient, safe and sustainable drilling operations. It was a source of pride that the percentage of national cadres that contributed to the manufacturing process reached 92%. It is planned to manufacture 4 well drilling rigs and achieve approximately 40 million US dollars as local value in the project.
Local capabilities and capacities have also been developed in the field of additive manufacturing, or what is known as 3D printing, as this promising initiative aims to keep pace with industry developments related to the local manufacture of spare parts. The initiative includes evaluating approximately 150,000 unique spare parts to determine their feasibility and economic attractiveness.
Al-Amri added: As part of the efforts made to develop supply chains and grow the local market by upgrading the capabilities of national companies through the Local Suppliers Development Program, a number of works have been assigned to Omani companies in various fields, including the local manufacture of telecommunications towers, the installation of photovoltaic solar panels, the manufacture of high-density polyethylene linings, and the reuse of non-toxic waste from oil and gas production operations using modern technologies.
In light of the Ministry's keenness to provide and enhance contract opportunities for national companies with the aim of raising their level of contribution and supporting their sustainability in the local market, 11 contract opportunities were allocated to Omani companies covering various fields, including manufacturing and supplying hazardous waste barrels, providing gyroscopic services for drilling operations, and providing manufacturing services.
In terms of the Ministry's efforts and support for small and medium enterprises that would advance them and enhance their participation in the oil and gas sector, the total spending on small and medium enterprises amounted to approximately 16% of the total value of purchases and tenders, which is equivalent to approximately 1.5 billion US dollars.