OCTAL secures $296m for facility expansion
PET packaging manufacturer wins finance from six regional banks
OCTAL, a supplier of polyethylene terephthalate (PET) sheet packaging in Oman, is to complete the second phase of the expansion of its facility in Salalah after securing funding from six regional banks.
The subsidiary of OCTAL Holding, a Muscat-listed conglomerate, said the second phase will add an additional 527,000 m/t to the production output, making the company the largest producer of PET resins on one site and the largest PET manufacturer in the world.
OCTAL has secured a OMR114 million (US$296 million) senior term loan from a group comprising Bank Muscat, Bank Dhofar, National Bank of Oman, Bank Sohar, Ahli Bank and Qatar National Bank.
Existing shareholders Muscat Overseas and Oman & Emirates Investment Holding Company have also agreed a junior debt facility of US$15 million.
“In less than five years, we have established a world-scale manufacturing complex and export operation in the Sultanate serving more than 40 countries, generating diversified growth for the local economy, and making a significant contribution to the development of Salalah Free Zone and the Port of Salalah,” said OCTAL chairman Sheikh Saad Suhail Bahwan.
OCTAL opened a 400,000 metric ton (m/t) PET resins and sheet packaging facility in the southeast port city of Salalah in January 2009. The company has raised nearly US$400 million in 2009 and 2010, according to Nicholas P. Barakat, managing director.
“The fact that the region’s financial community is again investing in our business reflects their confidence in our operations and ability to realise ambitious growth,” he said. “Securing project finance for a privately owned project of this scale is largely unprecedented in Oman.”
Packaging is one of the world’s largest industries, valued at around US $433 billion, dominated by the packaging of food and drink.
“OCTAL set itself a target in early 2009 of US$500 million in annual exports,” added Barakat. “The completion of its second phase of expansion later this year will put the company well on the way to achieving US$1.5 billion in annual sales by 2012, as it converts new packaging applications in PET sheet including those for yoghurt, meat and cheese.”