Muscat:
A land lease agreement was signed by an Indian company with Sohar Freezone to build a $300 million cotton yarn plant within the free zone area.

The project, which will manufacture a wide range of cotton yarn and it is going to be the first major cotton yarn plant in the region, will be operated as SV Pittie Sohar Textile FZC LLC, which is a wholly-owned subsidiary of Bombay Stock Exchange listed SVP Global Textiles Ltd.

Sultan Bin Salim Bin Said Al Habsi, Chairman of Sohar Port and Freezone, led a high-level delegation from Oman to Jaipur, on Saturday. They met with ShriVallabh Pittie Group (SVP), one of the largest manufacturers of cotton yarn in India and a global leader in the sector.

The facility will eventually provide over 1,500 jobs and is expected to start commercial operations in late 2019.

Abdullah Humaid Al Mamary, Chairman of Bank Sohar, together with Acting-CEO Sasi Kumar and other senior officials from the bank were also part of the delegation.

Bank Sohar has been awarded the syndication mandate to fund the entire project in two phases. An agreement to this effect was entered into with SVP Group. The bank has currently underwritten phase- one debt, to achieve financial closure. On successful completion of phase-one, the bank plans to syndicate a term debt for phase-two, along with a share of phase-one debt, to interested lenders.

“We are honoured to be the finance partner for a project of this magnitude that is expected to have a significant impact on the development of the region. It demonstrates our commitment to collaborate as a one-stop financial services provider catering to the diverse needs of individuals and large corporate customers,” said Sasi Kumar.

The plant will import 100,000 metric tonnes of cotton fibre annually through Sohar Port, with around 50 per cent coming from the United States and the remainder split between Australia and India. The plant will produce around 75,000 tonnes of finished yarn each year, which will be exported back through the Port to China and other global markets including Bangladesh, Pakistan, Vietnam, Portugal and Turkey.

“With over two-hundred years’ experience in the textile business, our company has a highly skilled and experienced Management with a strong focus on automation and technology. We source best-in- class machinery from leading global companies to ensure the highest levels of productivity and efficiency,” said Chirag Pittie, SVP Group’s Managing Director.

The new SVP facility will be the first step in establishing a fully-fledged textile cluster in Sohar Freezone. Downstream investments in knitting, weaving, spinning and fabric manufacturing could create a thriving industrial cluster providing thousands of new jobs for local households.

“Today’s agreements showcase the great things we can offer to investors in Sohar Freezone: the safest haven in the Middle East for foreign direct investment combined with high levels of government support; project financing with an Omani bank; 100 per cent foreign ownership; our optimal location and seamless connectivity to key global markets through our adjacent port; highly competitive land and energy rates; and a young, well-educated local workforce. Taken together, this is a sure fire recipe for business success,” said Jamal Aziz, CEO of Sohar Freezone.