Salalah Mills to be Oman’s biggest with $19m plant

07-Sep-2015 - Last updated on 08-Sep-2015 at 14:40 GMT

Oman’s Salalah Mills will build a new US$19.5m flour mill to produce 600 tonnes of flour per day by 2017, as agro terminal and dairy plant projects also get underway in the Sultanate.

The new Salalah Mills plant will add 40% to the firm’s current 1,500 tonne-per-day production capacity, which it reached full utilisation on earlier this year.

Equipment suppliers will provide half the finance for the project, with the other half coming from a new share issue by Salalah Mills, set to happen early next year.

Oman’s biggest miller

“The new production expansion project comes within the company's strategy to promote the company as the biggest flour mill in Oman and one of the largest flour mills in GCC countries and exploit the company's earlier investment in increasing grain storage capacity and higher discharge rate of wheat in the Port of Salalah,” said Ahmed Alawi al Dhahab, CEO of Salalah Mills, in a statement to the Muscat Securities Market.

The company, which sells its flour under the ‘Al Khareef’ brand, also announced plans for a new polypropylene bag factory.

The US$10m plant is scheduled to begin production by the end of 2016, and will also be financed through arrangements with suppliers, along with commercial loans.

Two other major Omani food production projects saw construction start recently; work on Sohar Port’s new US$170m agro terminal is underway, as the port’s CEO Andre Toet talked up the development’s potential to become part of a major food production hub.

He told the Oman Daily Observer Sohar would be able to offer “practically unlimited reserves” of grains and sugar, along with cheap energy and good connectivity, to companies looking to set up in the region.

Cutting dairy imports

Meanwhile, Global Earth Trading’s dairy project in Sumail Industrial Estate, around 70km from Muscat, also broke ground.

The US$10m project is scheduled to produce 100,000 litres of milk products including long-life milk, laban and yoghurt, using imported milk powder from markets such as the United States and New Zealand, as well as producing juices.

The project, which will use the “Zaki” brand for its dairy and juice products, aims to cash in on the 77% of Oman’s dairy consumption which currently relies on imports, mainly from the UAE and Saudi Arabia.

The firm will also export its products to East African markets including Uganda, Tanzania and Kenya.