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Feasibility Study Shoes Factory in Oman

 

Executive Summary

The proposed shoe manufacturing factory in Oman presents an opportunity to capitalize on the country's favorable macroeconomic conditions and the growing global footwear market. With Oman's projected GDP increase of 3.4% from 2021 to 2026 and a sizable labor force of 2.75 million in 2021, coupled with the substantial merchandise exports of USD 30.5 billion in 2020, the economic landscape offers a promising environment for investment. Furthermore, the global footwear market, projected to reach USD 413 billion in revenue by 2024, presents a lucrative opportunity for growth and expansion.

Market Potential

In terms of market potential, Oman itself boasts a market value of USD 200 million in 2024, while the wider MENA region presents an estimated market value of USD 20 billion in the same year. With a projected population of 6.4 million in Oman by 2040, the demand for footwear is expected to increase significantly, providing a long-term growth trajectory for the proposed factory.

Key Challenges

However, despite these promising opportunities, several key challenges must be addressed to ensure the success of the venture. These challenges include the high initial investment required for infrastructure, machinery, and raw materials, as well as the availability of skilled labor for shoe manufacturing processes. Additionally, sourcing specialized raw materials like high-quality leather and synthetic fabrics may pose logistical challenges, requiring a robust supply chain strategy.

Furthermore, navigating the regulatory environment in Oman, including obtaining permits and licenses, complying with labor laws and environmental regulations, and competing with established local and international brands, adds complexity to the project. Understanding and adapting to consumer preferences and economic factors such as currency fluctuations and changes in consumer spending patterns are essential for maintaining competitiveness and financial stability.

Project Economic Indicators

Despite these challenges, the project's key economic indicators, including a projected cumulative Net Cash Flow of USD 1.1 million over 10 years, a Net Present Value (NPV) of USD 1 million, an Internal Rate of Return (IRR) of 37%, and a projected payback period of 6.7 years, suggest a favorable return on investment. By addressing the identified challenges and leveraging the opportunities presented by Oman's economic landscape and the global footwear market, the proposed shoe manufacturing factory has the potential to thrive and contribute to the country's economic growth and development.













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