Octal outlines plans for Salalah packaging plant

The local Octal Holding has revealed details of a $300 million facility in Salalah to produce packaging materials - the first of its type for the region's downstream manufacturing sector.

The complex produces amorphous polyethylene terephthalate (APET) thermoplastic, often used by the food and pharmaceuticals sectors.

Although the facility started operations in December, details have not been available until now. It began with an APET production capacity of 20,000 tonnes a year (t/y) and will be capable of producing 300,000 t/y of APET by next spring, making it the largest facility of its type in the world.

The scheme is unusual in the Middle East because it is entirely integrated, being capable of producing the polyethylene terephthalate resin and converting it to APET. It is also unusual as the production is primarily geared for exports.

'We wanted to have a project that would provide market traction,' says Nicholas Barakat, managing director of Octal. 'We looked at packaging and it became clear that the market was moving to polyesters. We then adopted an innovative process based on the paper wrapping industry to produce a product that is of much greater quality and consistency than any other equivalent.'

The project was initiated by US venture capitalist firms Chemlink Capital and Pound Capital. After an initial injection of capital, other regional investors invested in the scheme, as well as several local banks, including Bank Muscat. The latter also acted as lead financial adviser. The project is being financed on a 45:55 debt/equity basis.

The production trains and APET licence technology have been supplied and installed by Germany's Uhde Inventa-Fischer. Construction was carried out by local contractors.