Feasibility Study Reports

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AL – Ramooz Block Factory

INTRODUCTION
M/s Al – Ramooz National LLC is 100% Omani company registered as limited liability Company under Commercial Laws of Oman.
The company was incorporated in 2001 and its business & commercial activities cover from oil & gas exploration services to construction, engineering, and leasing heavy equipments & technical support.
As part of policy to identify and diversify its commercial activities, the company has decided to study & set up an industrial unit at buraimi, to produce all kind of concrete blocks through an automatic block production plant to be imported.
The managing Directors of the company who has a practical experience of working in the field of oil & gas is actually involved in formulating the strategic policy to expend into fields of business, having a clear & vast potential of success & profitability in future.
The initial market survey & study was done & concluded that, dhahira region in general & buraimi Governorate in particular has a rapid potential of growth & demand of this project & product in the near future.

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GEOGRAPHIC & GEOLOGIC BACKGROUND
Sultanate of Oman is located at south – Eastern corner of Arabian Peninsula. Its cost line is stretched from its south west extreme on Arabian Sea and to east the Indian Ocean up to Gulf of Oman, and Mussandam in the North, which is overlooking the striat of Harmuz, which is entrance to the gulf.
The main geographical feature of sultanate’s 309,500 sq meter area is the majestic Hajar Mountain from Mussandam to Ras Al – Hadd in eastern coast and also takes to its highest point at 3,000 meter of Jabal Akhdar.
Oman has a long route of its rich geological history. The country rock record spans around 825 million year from remarkable sea creature and marine life to variety of wild life & birds provide a conclusive proof of the awesome geological changes, this country has witnessed over the past century.
The discovery of volcanic rocks from beneath the sea to rich deposits of cooper & chrome available in Oman, confirm that Oman Evan today lay at the margin of an ocean ancient salt which emerges to the surface in many salt which emerges to the surface in many salt hills, play an important role in forming Oil & Gas accumulation.

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PROPOSED PROJECT
The Buraimi was established as a Governorate under Royal Decree No: 108/2006 issued on 15-10-2006, and awarded a priority status by the council of Ministers under the terms of seventh five years development plan (2006 – 2010), where approval was given for several development projects of road, electricity, and other services to enhance the logistics and other infrastructure of the region, as well as to develop the Buraimi industrial Estate.
The location of buraimi, enjoy a vital and important strategic commercial location. It borders U.A.E Eastern city Al – Ain, and also en routes the road link to Qatar, Saudi Arabia and other gulf countries. It has three Willayat, Buraimi, Mahdha, and Sinainnah, (Previously a Niabat, but was given status of Willayat under royal decree No: 107/2006 issued on 15-10-2006.
However prior to becoming an independent governorate Buraimi was a Willayat under Dhahira region as its regional capital.

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ECONOMIC INDICATORS
On the economic side seventh five year plan (2006 – 2010) the Sultanate of Oman is aiming for average annual growth rate of 3% + in real term. Top priority would be given to developing Omanisation and improving national Manpower skill to meet local needs.
The plan also aims to develop the tourism, fisheries, and industrial sectors and support the efforts to boost exports and promote Omani products to the international markets.
It also seeks to encourage both domestic & foreign investment from private sectors as well as to setup funds to provide financial assistance to small & medium size projects, in addition to providing them technical and administrative support.
The estimate budget 2007 allocated as RO 500 million is some 33% higher than the approved 2006 budget figure are provided to cover the expenditure of new & ongoing development scheme listed for various sectors in the seventh five year plan.

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REAL ESTATE & CONSTRUCTION BOOM
The increasing overall surplus year after year on account of upward moving oil prices and the resultant liquidity has proved to be a boom for the real estate sector that is now sought to be the highest income yielding investment in the sultanate. The demand for real estate is growing across the different usage groups residential, commercial and tourism related activities. The sultanate’s focus on the oil and natural gas and education sectors is now being shifted to a great extent to manufacturing and tourism sectors in view of its commendable efforts to diversify the economy, Oman still remains a competitive market in terms of prices as compared to other GCC countries.
As reported, the total volumes of concluded real estate deals jumped to the highest level reaching 24.2m sq.m in 2007 compared to 13.7m sq.m in 2005 increasing by 43.4 % the investment during the period was RO 1.61bn compared to RO.029mn during 2005. The average price per square meter for residential land increased by 253 % to RO52 in 2007 compared to RO16.3 in 2006 and RO14.7 in 2005. The residential sector captured the biggest share, registering 94.6% of the total number of plots in 2006, and the capital city “Muscat” having around 26.2% of the total plots in 2006.
On the commercial front, volume of deal increased by 27% reaching 2.7m sq.m in 2007 compared to 1.97m in 2005. The total value the deals increased by 314% reaching RO397.8m in 2007 compared to RO96m in 2005. The average price per square meter of land for commercial use was RO151 compared to RO48 in 2005.
Also, an ambitious free zone project in Oman’s southern Dhofar region bordering Yemen has evoked considerable interest among local and foreign investors. This is due to the new amendments to visa rules and legislation governing foreign ownership of real estate, a new visa system was in place and a number of changes had been made in the law governing land ownership by foreigners, pointing out that non- Omanis could now own real estate in certain tourist projects. The capital investment law now permitted up to 70% ownership by foreigners in projects and the tax law had been revised to promote investor confidence. The project been revised to promote investor confidence. The project covers an area of 2,000 hectares. Phase 1, currently being developed, encompasses 200 hectares. The entire cost of the infrastructure development is borne by the government of Oman.
Yenkit tourism development LLC us developing a US$2bn luxury Integrated Tourist resort complex at Yenkit in Muscat Governorate. The project will be an ‘Integrated Tourism, and will consist of four 5-star hotels with approximately 900 rooms, an 18-hole international gold course; a wide range of tourist facilities, including sports and leisure facilities, a resort village, nature reserve and visitors centre, beach club, heritage and craft centre and major open spaces; 1,400 residential villas and up to 1,900 residential apartments and townhouses. The project responds to major initiative of the Omani government to create a world-class tourism corridor, stretching down the scenic coast between Muscat and Sur to the south. Few other factors that have contributed to the increasing real estate demand apart from the Sultanate’s focus on manufacturing and tourism are listed below.

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Firstly, the ownership laws are relaxed to encourage foreign ownership on the following lines:
• The Royal decree 12/2006 extending foreign ownership rights to include non-GCC nationals (however only in certain designated areas)
• The increasing demand for housing on account of about more than 65% of the Omani population being below the age of 24
• The increase in commercial projects has envisaged the influx of expatriates further fuelling the demand for residential rentals. The number of expatriates in the Sultanate was 638,447 in 2007 representing a yearly growth rate of 25% over 510,713 as at end of 2006. During the previous year the expatriate population had by 20.2% from 424,788 to 510,713. The increasing sequential yearly expatriate population growth rate is expected to hold the northbound trend in 2008 as well and lead to a paucity of residential facilities.
Secondly, the recent surge in the Construction Cost Index (CCI) in the Sultanate underpins the increasing yearly real estate demand. The CCI for Commercial space registered a 3.5% growth in 2Q06 compared to the 0.2% yearly growth during the 1Q06 period. For residential space, the CCI had grown at yearly rate of 3.4% in 2006 as compared to 1.2% yearly growth during the 2005 thus representing on increased of activity.
Thirdly, the Muscat Wholesale Price Index for building materials has also grown by 8% from 131.1 in 2006 to 141.6 in 2007. The real estate in Oman is continuing its strong growth. The latest available data from the ministry of national economy indicate that the total number of total plots have increased from 34,665 in 2004 to 69,346 in 2006 a whopping increase of 100% where as the building permits issued for construction of various, residential, commercial, educational and Govt. Building also increased from 5,804 in 2004 to 8,707 in 2006, which is an increase of 50%.
(Refer statistical data of ministry of National Economy) book of 2007.
We expect further growth in demand in 2008 for commercial lands as a result of vigorous commercial activity in manufacturing and tourism sectors due to sultanate’s focus on these sectors during the current plan period.