US/Oman: US-based USG Corporation (USG) has announced that it has entered into a strategic partnership with the Zawawi Group of Oman to meet the growing demand for its building products in the Middle East and India. The investment by USG opens up new opportunities for the group in the rapidly-growing Indian and Middle Eastern wallboard markets and will provide local projects better access to USG's industry-leading wallboard products.
USG's partnership with the Zawawi Group will be in two phases. The first phase will be establishment of a mining joint venture through which USG will acquire 55% of Zawawi Gypsum, which holds the mining rights to a gypsum quarry in Salalah, Oman. The joint venture will develop infrastructure and operate the quarry. The quarry is near to many ports and is thus in an ideal location to provide raw material for future USG wallboard plants and cement plants run by other companies. Quarry mining operations are targeted for startup in the third quarter of 2013.
The second phase of the partnership will see the construction of a 50/50 manufacturing joint venture between USG and Zawawi Minerals to build and operate a new wallboard plant in the Salalah Free Zone in Oman. The proposed plant site is close to the quarry and ports, allowing easy access to India and the rest of the Middle East. It is expected that the wallboard plant will be running by the end of 2013. USG expects the investment of approximately US$60m to be incurred over two years, with the majority in 2012.
"This is an important step forward in our strategic initiative to diversify the sources of USG's earnings by investing in higher-growth international markets," said James S Metcalf, Chairman, President and CEO of USG. "The market in India and the Middle East represents an attractive growth opportunity. We are thrilled to partner with a prominent and highly regarded organisation such as the Zawawi Group, whose business acumen and market knowledge will contribute to the success of the venture."
"Zawawi Minerals is committed to investing and participating in the industrial promotion of the nation, supporting the development march witnessed under the wise leadership of His Majesty Sultan Qaboos," said Alawi bin Qais al Zawawi, Chairman of Zawawi Minerals. "Part of our corporate agenda is our commitment and responsibility to adopt and deliver high international standards of operations for a safe and healthy environment for the local communities. This also includes bringing substantial, long-term benefits and job opportunities to the people of Dhofar Governorate. In addition, our mining and manufacturing projects in Salalah will enhance valuable foreign exchange earnings for the country as these operations are mostly export oriented," he added.
Ramachandran, CEO of Zawawi Minerals, said, "The company has been investing significantly to conduct detailed technical exploration of minerals and commercial feasibility study. The gypsum board and plaster of Paris manufacturing facility will be set up in the Salalah Free Zone adopting American environmentally-friendly manufacturing technology complying with all applicable national and international standards related to safety and environmental quality measures."
Ramachandran added that the joint projects would provide jobs for more than 320 people directly and indirectly and that they would be trained to a high level. He said that the combination of US-standard wallboard with 'Made-in-Oman' branding would enhance the Omani industrial brand image in the international marketplace.
