Port of Salalah highlights growing East African market potential

Port of Salalah highlights growing East African market potential

Gross domestic product in the East Africa region grew by 7 percent per annum between 2008 and 2020, nearly three times the rate of OECD countries. With its population projected to grow by 55 percent between 2021 and 2040, the region represents a burgeoning market for international trade. Positioned to effectively serve this rapidly expanding region, the Port of Salalah in the Sultanate of Oman has been collaborating with key customers to meet this increasing demand.

Strategically located, the Port of Salalah offers transit times up to five days shorter between South/East Asia and countries in the East African region, including Somalia, Djibouti, Kenya, Tanzania, Seychelles, Ethiopia, Zambia, South Sudan, and Uganda, compared to other major hub ports in the region.

African exports have a strong overlap with Omani and Gulf Cooperation Council (GCC) imports and exports. The Port of Salalah provides supply chain solutions that enhance the competitiveness of these products. Exports from Africa include vehicles, lifestyle and retail products, and perishables such as avocados, flowers, and nuts. There is also a significant overlap with basic commodity imports like food grains, fertilisers, construction materials, textiles, and chemicals.

Sunil Joseph, chief commercial officer at the Port of Salalah, explains, “This potential has already been discovered by the food grain and fertiliser industry. A number of global brands have started utilising Salalah as their regional distribution hub, reducing their order-to-delivery cycle by more than 10 weeks.”

“East African retail chains are mostly local, sourcing from local distributors and producers. I see potential to support future large retail chains’ expansion in East Africa through both air and ocean connectivity offered in Salalah, along with the potential to store and redistribute depending on demand.”

“Currently, there’s an immediate opportunity for store fixture delivery to support new openings and periodic refurbishing of stores and other outlets in East Africa. I also see an opportunity to act as a (de)consolidation hub for scaffolding, construction materials, and other semi-perishable items in Salalah.”

For businesses targeting the relatively uncrowded East African market, the Port of Salalah offers unrivalled potential. The Salalah Free Zone adjacent to the port provides 0 percent corporate tax, 0 percent customs duties, 100 percent foreign ownership, and no minimum capital requirements, making it an ideal distribution centre for companies looking to establish flexible supply chains into the Middle East and East Africa.

With an annual capacity of 5 million TEU and ongoing expansion to add an additional 30 percent capacity, the Port of Salalah has sufficient spare capacity to cater to all shipping lines. Additionally, the port handles approximately 21 million metric tonnes of general and liquid cargo per annum, offering multiple cargo handling solutions in one location.

Consistently ranked as the second most efficient terminal in the world in the Container Ports Performance Index published by the World Bank and S&P Global, the Port of Salalah boasts fast discharging and industry-leading truck turn times. Joseph concludes, “These high standards mean that the port offers extremely high efficiency and cost competitiveness compared to other more highly marketed port choices in the region.”

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20 May 2024