UAE-based Inexco Group has started construction work on a $150m cotton yarn manufacturing plant at the Sohar Port and Free Zone, according to a local media report.

The client, India-based ShriVallabh Pittie Group (SVP), said the plant comprises the first phase of the $300m facility it plans to build at the free zone.

SVP is targeting to complete the project’s first phase by March 2019 with a capacity of 150,000 spindles and 3,500 rotors.

Local firm Bank Sohar was awarded the syndication mandate to fund the project’ two phases last year. The bank has underwritten debt for the first phase. Upon successful completion of the initial phase, the bank plans to syndicate a term debt for the second phase, along with a share of the first phase debt, to interested lenders.

SVP signed a land lease agreement with Sohar Port and Freezone in September last year for the establishment of the plant to manufacture a wide range of cotton yarn products.

SVP will import 100,000 metric tonnes of cotton fibre a-year through Sohar Port, with around 50 per cent of the raw materials coming from the US 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 through the Sohar Port to China and other markets including Bangladesh, Pakistan, Vietnam, Portugal and Turkey.

A deep sea port in northern Oman lying on the Gulf of Oman coast, Sohar Port is operated and managed by the Sohar Industrial Port Company (SIP), a 50:50 joint venture of the Netherlands’ Port of Rotterdam and the Omani government.

The port is being expanded and Belgium-based Dredging, Environmental & Marine Engineering (Deme) was selected last year to undertake the earthworks, reclamation and storm water works contract for the first phase of the port's expansion.