Salalah Free Zone signs US$10M beverage packaging deal with Saudi firm

OMAN – Salalah Free Zone has entered an agreement with Saudi company Advanced Packaging to build a 25,500-square-metre factory producing carbonated drinks, juices and energy drinks, carrying an investment of RO3.85 million (US$10 million).

The project is affiliated with Saudi Alesayi Holding Company, according to the state news agency ONA. 

The new factory complex will comprise an existing facility along with additional land set aside for operations and future expansion. 

Mohammed Ali Alesayi, chairman of Advanced Packaging, said the factory was intended to serve the Omani market and to export to Yemen and African markets. 

He noted that it was the company’s third factory, following two facilities in Saudi Arabia, and said production was expected to begin in six months, generating direct and indirect employment opportunities.

Free Zone Chief Cites Industrial Investment Strategy

Ali bin Mohammed Tabuk, chief executive of Salalah Free Zone, said the agreement reflected the zone’s ongoing efforts to draw quality industrial investments, broaden the base of economic activities and raise the contribution of non-oil sectors to the national economy, consistent with the objectives of Oman Vision 2040. 

He indicated that the project would also support growth of Oman’s food and beverage manufacturing sector and add to economic diversification.

Port Access Supports Regional Export Ambitions

Tabuk added that the zone’s location and its connections to the Port of Salalah and regional transport networks would facilitate distribution and exports to markets in the GCC, East Africa and Asia. 

Port proximity matters for beverage producers because packaging materials, empty containers and finished goods all move at relatively low value density, making freight costs a significant share of delivered price. 

Access to efficient shipping routes improves competitiveness in export markets where transport expenses can determine whether a product competes effectively against locally produced alternatives.

Beverage Manufacturing Drives Packaging Demand

Beverage production generates substantial demand for cans, PET bottles, closures, labels and secondary packaging, making such facilities anchor customers for packaging suppliers in their regions. 

Establishing capacity in Salalah allows Advanced Packaging to serve Gulf, East African and Asian markets from a single location, reducing lead times and tariff exposure compared with shipping finished beverages from Saudi Arabia. 

The investment also reflects broader Gulf efforts to expand non-oil manufacturing, where food and beverage processing has become a priority sector under national diversification programmes.

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