Oman Flour Mills presses ahead with multiple food projects

MUSCAT, AUG 16

Oman Flour Mills (OFM), the largest integrated food company of the Sultanate of Oman, is advancing a number of strategic food-related ventures that will add to its already sizable project portfolio.

“Multiple projects are being evaluated across the group,” said Ahmed bin Ali al Bulushi, Chairman, Board of Directors – OFM Group. “The projects focus on integration across the value chain as well diversification into new ventures,” he stated in the Group’s Directors’ Report for H1 2023.

Atyab Investments, the Group’s investment flagship, is exploring the opportunity to expand its thriving industrial bakery business into Saudi Arabia, notably by setting up a bakery in the kingdom. To this end, it has already identified potential partners while also working on an initial feasibility report, the Chairman said.

Also making headway is the Group’s plan to establish an industrial food cluster comprising a variety of small-scale manufacturing units that will meet the requirements of the Sultanate of Oman.

“Initial shortlisting of factories for the integrated food cluster project were suggested by the consultant,” said Al Bulushi, adding that a detailed feasibility study is underway as well.

As reported by the company last week, the Group’s feed mill expansion is progressing as well. The expansion will boost the plant’s milling capacity to 20 tonnes per hour, while the capacity of the pre-mix unit will be raised to 6 tonnes per hour. Both projects are slated for completion before the end of this year.

For the six months ended June 30, 2023, OFM Group garnered revenues of RO 65.05 million, representing a 13 per cent uptick from revenues of RO 57.58 million recorded a year earlier

“All sectors achieved increase in the revenues, notably in feed by 11 per cent, flour by 21 per cent and bakery by 14 per cent,” said the Chairman, noting that Group expenses were also up 9 per cent, buoyed in part by increases in raw material costs. However, net profit after tax slumped to RO 751k, down from RO 855k in H1 2022.

Parent company Oman Flour Mills SAOG (OFM) recorded a pre-tax profit of RO 1.38 million, which was down from RO 1.43 million a year earlier. Revenues were up 15 per cent, boosted by a 10 per cent uptick in sales volumes and a 5 per cent increase in the sales price.

Significantly, raw material costs grew by RO 5.13 million during H1 2023, representing a 12 per cent rise over H1 2022. However, this will be offset by a credit of RO 2.59 million received from the government as subsidy towards wheat consumption, in addition to RO 412K as subsidy towards feed raw materials, Al Bulushi stated.

OFM is a subsidiary of Oman Food Investment Holding Company (Nitaj), the food sector investment arm of Oman Investment Authority (OIA).