MUSCAT — The world's largest plant to manufacture shipping pallets will soon come up in Oman under an agreement signed here yesterday between the Sohar Industrial Port Company (SIPC) and PVAXX Industries LLC, a wholly-owned subsidiary of Bermuda-based PVAXX Limited.

The $230 million 100 per cent foreign-owned venture will produce in its initial phase 150 million PVAXX 'Siluma' pallets per year that will be mainly exported to the Far East and other countries. The company has already won orders for 25 million pallets from Iceland, South Africa and GCC states.

The agreement was signed by Minister of Transport and Communications Shaikh Mohammed Al Harthy, who is also the chairman of SIPC, and chief executive officer of the Port of Sohar Jan Meijer with Henry Stevens, chief operating officer and director of PVAXX.

The build-own-and-operate project, in which PVAXX will invest $100 million, will be built on a 15-hectare area at the Port of Sohar in the Batinah region. Production is scheduled to start in the second half of the year.

Silica sand, the major raw material that is used together with polyethylene to manufacture the pallets, will be sourced from Oman and the other GCC countries.

PVAXX, an international commercial materials sales corporation operating in the field of environmentally friendly composites, had initially, through its regional office in Manama, intended to set up its first GCC facility in Bahrain.

However, after undertaking advanced feasibility studies, final design specifications and site approvals, Sohar was selected as the first location. PVAXX will continue to evaluate further opportunities for expansion in the region, a spokesman for the company said.

He stressed that the PVAXX Siluma pallets were recyclable, cheaper and more durable than many alternative pallets. They had been designed to allow customers to replace traditional wooden pallets "in order to achieve greater cost efficiencies while simultaneously reducing the burden on the global environment," he added.

"PVAXX has selected Sohar because of its excellent location, world class infrastructure and the presence of internationally recognised common service providers," Stevens said. He thanked the Omani government for the "strong and timely support" the company received.

"SIPC is very pleased with the agreement concluded with PVAXX today as it will further enhance utilisation of the port, which will benefit all its present and future users, tenants and service providers," Meijer said.

Highlighting the swiftness of the deal, he noted that "between first contact with PVAXX and today's signing, less than four months have passed, a period during which some major government decisions were required for the advancement of the project."

The plant will employ more than 200 people directly and PVAXX has expressed its commitment to hiring and training Omani nationals.