Khazaen Cement Factory: What It Means for Oman Property

A new sustainable cement products factory is coming to Khazaen Economic City, and for anyone buying off-plan property or tracking construction timelines in Oman, that matters more than it might first appear.

Khazaen Economic City — located in the Barka area of South Al Batinah Governorate, roughly 45 km from Muscat — signed an investment agreement with Bait Al Yaqout Investment Company to establish the factory. The facility will specialise in sustainable cement products, adding a domestically produced, lower-carbon building material to Oman's supply chain. No production capacity figures or capital investment totals were disclosed in the announcement, but the agreement represents another anchor tenant for a zone that is steadily becoming one of Oman's most strategically important industrial and logistics hubs.

Why a Cement Factory Is a Property Story

Construction material costs are one of the least-discussed but most consequential variables in Omani real estate. When cement prices spike — as they did regionally in 2022–2023 due to global supply-chain disruption — developers either absorb the hit (squeezing margins and sometimes stalling projects) or pass it on through revised unit pricing. A domestic factory producing sustainable cement products directly addresses that vulnerability.

For you as a buyer, the downstream effects are straightforward:

• More stable off-plan pricing. Developers who can source materials locally face fewer currency-linked cost shocks.
• Faster delivery. Reduced reliance on imported cement means construction schedules are less exposed to port congestion or shipping delays.
• Green credentials. Sustainable cement — typically lower in embodied carbon than conventional Portland cement — helps developers meet the green-building benchmarks increasingly demanded by international buyers and required under Oman's Vision 2040 sustainability targets.

Khazaen Economic City: The Bigger Picture

Khazaen is not a traditional residential development. It is a purpose-built economic zone covering approximately 52 sq km, designed to attract manufacturing, logistics, food processing, and industrial investment. The Omani government's Sorouh initiative — which aims to stimulate foreign direct investment and diversify the economy away from hydrocarbons — treats zones like Khazaen as critical infrastructure for that diversification.

The city sits at the intersection of the Muscat–Sohar expressway and a planned dry port, giving it direct connectivity to Sohar Port and Freezone to the north and Muscat's commercial core to the south. Each new factory that signs an agreement here adds to the employment base, which in turn drives demand for residential property in surrounding towns and governorates.

For residential buyers, the indirect play is straightforward: industrial employment zones create sustained rental demand in nearby areas. South Al Batinah has historically been underserved by formal residential supply relative to Muscat, which means yield-oriented investors may find better entry prices there as infrastructure matures.

Sustainable Building Materials and Oman's Development Pipeline

The timing of this factory is notable. Oman has a significant pipeline of large-scale mixed-use and tourism developments under construction or in planning. Projects like the Sustainable District at The Sustainable City – Yiti and The Plaza at The Sustainable City – Yiti in Yiti, Muscat are explicitly built around low-carbon design principles — and they require building materials that match those standards.

Sustainable cement products — including blended cements, geopolymer variants, and low-clinker mixes — reduce a building's embodied carbon footprint, which is increasingly a factor in green building certifications such as LEED and Estidama. As more Omani developers pursue these certifications to attract ESG-conscious foreign buyers (particularly from Europe and the GCC), local supply of certified sustainable cement becomes a competitive advantage for the entire sector, not just one factory's customers.

What Off-Plan Buyers Should Watch

If you are purchasing off-plan in Oman, construction material availability is a background risk that most sales brochures don't mention. Here is what to check:

Escrow Protection

Under Omani law, off-plan developers must hold buyer payments in a licensed escrow account, released in tranches tied to verified construction milestones. This protects you if a project stalls — but it does not eliminate delay risk. A more stable domestic materials supply chain reduces that risk at source.

Developer Track Record

Ask your developer about their existing supplier relationships and whether they have fixed-price material contracts in place. Developers with strong procurement pipelines are better insulated from spot-price volatility.

Delivery Timelines

Projects announced in 2024–2025 will likely benefit from the Khazaen factory's output once it reaches full production. If your handover date is 2026 or later, the improved local supply chain is a genuine positive for on-time delivery.

The Tax and Ownership Context

For foreign buyers, Oman remains one of the Gulf's most accessible property markets. Full freehold ownership is available to non-Omanis within designated Integrated Tourism Complexes (ITCs). Personal income tax is 0%, property ownership tax is 0%, and rental income is taxed at 12% — a straightforward structure with no hidden levies.

The Khazaen factory story fits neatly into this picture: industrial investment drives employment, employment drives housing demand, housing demand supports property values and rental yields. It is a supply-chain story, yes — but it is also a signal that Oman's construction ecosystem is maturing in ways that benefit every buyer in the market.

Source: Times of Oman