Oman’s Octal has said total sales of polyethylene terephthalate (PET) touched $25 million in June and would reach $100 million per month by mid-2011 making it a billion-dollar-sales company.

Octal chairman Sheikh Saad Suhail Bahwan said Octal shipped more than 1,200 containers per month from Oman and now accounts for 85 per cent of import-export traffic through the port of Salalah.
“Despite the downturn, our business is growing on the strength of scale, reliability of supply and product quality offered by our advanced manufacturing operation in the Salalah Free Zone,” said Sheikh Saad.
“In two years we will be a $1 billion company. We are winning new customers while the competition cuts back or closes down and making steady progress in converting the market to PET.”
Octal, which opened the world’s first integrated PET resin and sheet complex in January, exports to more than 60 customers in 33 markets. It has also substituted 90 per cent of PET resin imports into Oman, valued at nearly $42 million a year.

Busiest month
June was Octal’s busiest month to date, with 22,000 tonnes of PET resin and sheet sold to local, regional and international customers.
Octal exports 66 per cent of its products to Europe, 30 per cent to North America, and the remainder to Middle East and Asian markets.
It produces PET resin for soft drink, water and edible oil packaging, and PET sheet, the world’s fastest growing material in clear rigid plastics, which is used for food, dairy and consumer product packaging.
Built at an initial cost of $350 million, its integrated PET complex has a production capacity of 330,000 tonnes. Total PET capacity will increase to 830,000 tonnes following the completion of a second phase of expansion in 2011. At that point, Octal will be the world’s largest PET producer on one site.
In 2008, total exports for the year were $48 million.
The company has already closed on the equity and mezzanine financing it needs to complete phase two of its expansion.
 
Impressive track record
It raised $100 million in equity from its existing Oman- and GCC-based investors and aims to secure $130 million in additional debt from local and regional banks, maintaining a high ratio of equity to debt (55 per cent versus 45 per cent).
Sheikh Saad said: “Our annual running rate of exports now stands at around $300 million and will increase to $400 million by December. Despite being a new company, the financial community recognises our impressive track record and ability to become a world leader in PET based out of Oman.”
Since its official launch in 2006, Octal has secured $194 million in long-term loans and $68 million in working capital loans from Bank Muscat and Bank Dhofar.
It has also arranged $32 million in mezzanine financing from Bank Muscat, an investor in Octal’s parent company. The Mena Fund of HSBC acquired a minor stake in Octal Holding in 2008.
Octal Petrochemicals is a wholly-owned subsidiary of Octal Holding & Company SAOC, a joint stock company listed on the Muscat Securities Exchange.

Investors
Octal’s investors include the National Investment Fund Company (Nifco), Muscat Overseas, Oman Investment Company, Malatan Trading and Contracting, Oman and Emirates Investment Holding, Suhail Bahwan Group, Dhofar International Development and Investment Holding Company (Didic), Bank Muscat, and the Mena Infrastructure Fund.