New projects set to ramp up flour milling capacity

By Conrad Prabhu — MUSCAT: MARCH 11 - A proliferation of flour mills in the Sultanate is set to boost flour production capacity to 3,800 metric tonnes (MT) per day, representing nearly a doubling of capacity from 2015 when Oman had only two plants — Oman Flour Mills in Muscat and Salalah Flour Mills in Dhofar Governorate. The dramatic increase in milling capacity, while boding well for the nation’s food security objectives, is expected to accelerate already fierce competition in the domestic market. According to Salalah Flour Mills, currently the nation’s largest miller with a daily milling capacity of 1,500 MT, two new mills have set up operations in Salalah over the past two years. Al Raseed Flour Mill and Al Reef Flour Mill, with a capacity of 200 MT and 300 MT respectively, have come on stream at Raysut Industrial Estate. In addition, a fifth plant — Al Khajeej Flour Mill — is preparing to launch operations with a capacity of 500 MT per day at Suhar Industrial Estate during the current quarter.  Also on the anvil is the government-backed Suhar Flour Mill, currently under construction at Suhar Port with a capacity of 500 MT. Thus, from an initial industry size of two flagship flour mills, Oman will shortly see the milling sector burgeon to a total six plants within the next 12 months.  Commenting on the implications of this sudden jump in capacity for the industry, Ahmed Alawi Abdullah al Dhahab, CEO — Salalah Flour Mills Company, said: “With the new flour mills coming into the market, the flour production capacity in Oman will increase to 3,800 MT per day, with local consumption of 1,000 MT per day only. Therefore, with the overcapacity, the competition will affect profit margins,” he added in management analysis of the company’s performance for fiscal 2016. Salalah Flour Mills’ total revenue, meanwhile, declined 13.3 per cent to RO 55 million in 2016, with net profit also dropping 15.6 per cent to RO 4.5 million. The net profit of the Group decreased 32.8 per cent to RO 3.5 million. To help reinforce its status as the nation’s largest miller, Salalah Mills has added 12 new silos, with a total grain storage capacity of 120,000 MT, to its complex at Raysut.  This boosts its grain storage capacity to 161,500 MT — the largest in the Sultanate. The company has also installed two unloading machines at Salalah Port with a discharge capacity of 600 MT per hour. Commercial operation of the company’s new polypropylene packaging plant, with a capacity to produce 48 million bags per annum, will commence next month.  Investment in the new facility is in excess of RO 4 million, the CEO said.