Operational revamp: Establishment of Oman Fishing Fleet Company and Value Added Processing Company envisaged as part of restructuring of Sultanate’s oldest fisheries firm.
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Minority state-owned Oman Fisheries Company (OFC) has outlined plans to set up two new subsidiaries to oversee its investments in a new fishing fleet as well as in value-added processing activities.
Oman Fishing Fleet Company LLC (OFFC) is proposed to be the primary portal for the value chain model where its core operations would be fishing in the high seas and selling the catch to the parent company, said Dr Khalid Mansoor al Zadjali, CEO.
The new subsidiary will also enter into strategic tie-ups with international fishing fleet companies that are interested in joining hands with OFFC to fish in Omani waters on profit-sharing or fish catch sharing arrangements, he stated in the parent company’s Management Discussion & Analysis Report published on Monday.
The second spin-off, named Value Added Processing Co LLC (VAP), will focus on adding value to the processed fish by introducing high-end ready-to-cook and ready-to-eat products targeted primarily at health-conscious consumers.
Publicly-traded Oman Fisheries, which is listed on the Muscat Stock Exchange, is also the subject of a proposal for the restructuring of its share capital and equity.
A key objective of this restructuring is to raise angel funds for the capital evolvement in the two new LLC subsidiaries.
The restructuring exercise will also allow the participation of prospective investors who are interested in investing and developing the group and its subsidiaries, he noted.
Set up by Royal Decree in 1987, Oman Fisheries is owned 24 per cent by the Omani government (represented by Fisheries Development Oman [FDO], an affiliate of Oman Investment Authority) and 24 per cent by Oman Flour Mills, among a large number of other small shareholders.
Revenue from sales slumped to RO 12.52 million in 2020, down from RO 14.21 million a year earlier – an 11.82 per cent decline attributed primarily to the Covid-19 pandemic. Losses totalled around RO 3 million last year, down 17 per cent from the previous year’s tally of RO 3.6 million.
A restructuring plan envisaged by the parent company for the 2021 - 2025 timeframe seeks to not only address its financial position, but will also focus on developing full value chains that include linking all activities from the source all the way to the consumer, said Mohammed bin Hamad al Masrouri, Chairman.
As mandated by the Commercial Companies Law, which requires companies losing 25 per cent of their capital to take measures to return them to profitability, Oman Fisheries’ Board has prepared an integrated plan, which calls for, among other things, restructuring the capital, investing in new ships and fisheries projects, while also strengthening the capital, he stated.
Further, with a view to reducing its dependence on the landings of traditional fishermen, the company is also ramping up its commercial fishing capabilities by owning or chartering vessels. In line with this strategy, the commercial fishing vessel ‘Santiago’ was launched last November, helping boost its own catches of fresh fish. At the same time, its three main fish processing plants – at Salalah, Al Ashkharah and Masirah – are being modernised as well.
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