A land lease agreement was signed between SOHAR Port and Freezone and ShriVallabh Pittie Group (SVP), one of the largest manufacturers of cotton yarn in India and a global leader in the sector, in Jaipur, to establish a new $300mn plant in SOHAR Freezone to manufacture a wide range of cotton yarn, to be operated as SV Pittie Sohar Textiles FZC-LLC, a wholly owned subsidiary of Bombay listed SVP Global Ventures.
HE Sultan Bin Salim Bin Said Al Habsi, chairman of SOHAR Port and Freezone, led a high-level delegation from Oman to Jaipur, India. 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. The facility will eventually provide over 1,500 jobs and is expected to start commercial operations in late 2019.
Commenting on the agreement, Sasi Kumar said: 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.
The plant will import 100,000 tonnes of cotton fibre annually through SOHAR Port, with around 50% coming from the United States, and the remainder split between Australia and India. The plant will produce around 75,000 tons of finished yarn each year, which will be exported back through the SOHAR Port to China and other global markets, including Bangladesh, Pakistan, Vietnam, Portugal, and Turkey.
Chirag Pittie, SVP Groups managing director said: With over two-hundred years experience in the textile business, our company has a highly skilled and experienced management team 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.
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.
SOHAR Freezone CEO, Jamal Aziz, summed up when he said: Todays 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% 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.