Octal Holding to invest Dh1b

DUBAI — Oman-based Octal Holding is investing Dh1.1 billion ($300 million) in technology and production lines to become the world's largest producer of PET resin and APET sheets, and be able to supply these to the UAE market by next year.

By Jose Franco

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Published: Mon 17 Sep 2007, 9:15 AM

Last updated: Sat 4 Apr 2015, 11:41 PM

Nicholas Barakat, CEO of Octal, yesterday said Dubai, Abu Dhabi and Sharjah are the priority areas in the Gulf for Octal's PET resin, which is used in the packaging for items such as soft drinks and personal-care products, and APET sheets, which are suitable for use in food-contact applications.

He said the six GCC (Gulf Cooperation Council) members of Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman will have a big share of the Dh183.64-million ($50 million) annual Middle East market, which is growing at an average of 30 per cent per annum, for the products.

He added that the company is now looking into putting up a regional sales office in Dubai. It has its global offices in Dallas, Texas and Shanghai, China. "We're focusing on growing this business, and let's see in 12 months if we'll be having an office here," he said in a phone interview.

He added that with the new investment, Octal will increase its production capacity to 300,000 metric tonnes (mt) of APET sheets by May 2008 from the present 30,000mt of APET sheets and PET resin. Having a main equity of Dh551 million ($150 million), Octal, which was established by the US-based investment and project development group Chemlink Capital Ltd., entered the market in December 2006 with an annual production capacity of 20,000mt.

Today, he said, Octal is profitable that it plans to float its shares by 2009, although the company has not decided yet where and which stock exchange to list.

He added that Octal, whose 70 per cent equity is held by US and GCC investors and 30 per cent by Omani shareholders led by Bank Muscat, has a total of 11 big backers.

Barakat said Octal's one-year product capacity is sold out, almost divided equally between the US and European markets. He added that the company has also shipped its product to Egypt and the LEVANT nations of Lebanon, Jordan and Syria, which both accounted for less than three per cent of the annual sales, ending last month, of Dh132.22 million ($36 million).

Octal is located on the east-west trade routes because its plant is adjacent to Oman's Salalah Port, in Salalah, providing for fast and efficient global distribution.

APET sheets can be delivered to any port in the world within 12 to 18 days.

Barakat said that by next year Octal, which also counts the Connecticut-based investment adviser Pound Capital Limited among its shareholders, will represent close to 25 per cent of the global industry output.

He said that by June 2008, Octal will generate total sales of Dh1.84 billion ($500 million) per annum and double it within 20 months, due to the equity already earmarked for expansion.

APET is growing at 12 per cent per annum, with total sales of Dh8.26 billion ($2.25 billion) in 2006, mostly in the US and Europe, according to Barakat.

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