Refined petroleum products, food products and beverages, chemicals, fabricated metal products and ready-made garments have been singled out. This attitude by the Omani government has won much praise lately. But it will take firm action as well as strong words to transform the Sultanate's tiny manufacturing sector into a source of prosperity and local analysts are under no illusions as to the size of the challenge. Profitability of most companies has eroded and with Oman being a small market, unless the companies are export oriented, it is difficult to reap economies of scale leading to a demand supply mismatch. A range of factors has impacted the economy over the last couple of years and the manufacturing sector was one of the worst hit.
New companies find it difficult to raise IPOs when there is no liquidity in the market.
Oman has all the right ingredients to promote industries but it lacks a proper marketing framework. Unlike the popular misconception, it is cheaper to set up a plant in Oman than in Jebel Ali in the UAE - the variable costs are lower here. Technically everybody in the GCC imports the same machinery. Differences arise because of the marketing strategy and the pro-active bureaucracy present elsewhere. Red tape is a constant source of complaint among investors.