Salalah Mills Co, a publicly traded Omani company listed on the Muscat Stock Exchange (MSX), has announced plans to venture into grain trading – a move that marks the Sultanate of Oman’s maiden foray into the multibillion dollar global grain commodities market.
The Raysut-based firm, which owns and operates Oman’s biggest flour mill and grain storage complex by capacity, said its board had approved the establishment of a new grain trading arm as part of its expanding and diversifying business portfolio.
The new outfit, named Salalah Grains Trading International, will be set up at the Dubai Multi Commodities Centre (DMCC), a Dubai-based commodities exchange dealing in agricultural commodities, besides precious commodities, as well as energy, steel and metals.
Of all commodities currently being traded in the global market, grain trading is the most critical for human sustenance, say experts. It has currently valued at roughly $120 billion annually, with an estimated 576 million tonnes of grain traded in 2021, according to data from the Foreign Agricultural Trade of the United States (FATUS).
Grain commodities typically include wheat, corn, oats, barley and rice – cereals that form the mainstay of most types of food for human and animal consumption.
Following the global food crisis of 2005 – 2008, the Sultanate of Oman adopted urgent measures to secure the nation’s basic food requirements, notably through the establishment of stockpiles of food grains and essential commodities. More recently, Oman Investment Authority (OIA) and its subsidiaries, notably Oman Food Investment Holding Co (Nitaj) and Fisheries Development Oman (FDO), began investing in projects aimed at strengthening domestic production capacity in the dairy, poultry, red meat, fisheries, aquaculture, and fresh fruit and vegetable farming sectors as well.
The country’s two main grain importers – Oman Flour Mills and Salalah Mills Co – too have also invested in flour milling and grain storage capacity to help support the nation’s basic food requirements.
Significantly, Sunday’s announcement by Salalah Mills to set up a grain trading arm underscores the company’s strong appetite for growth across the food value chain. Early last year, announced plans for the establishment of a Food Industries Hub at Khazaen Economic City in South Al Batinah Governorate. In addition to investments in an industrial bakery, the Khazaen facility will also host production lines for frozen and semi-cooked pastries in the first phase, followed by frozen cakes, snacks, noodles and biscuits in the second phase.
Over the 2022 – 2025 timeframe, the company aims to expand into a number of food related fields, notably food grain trading and storage, manufacture of flour blends, improvers, vitamins and minerals for bakeries, flour mills, fodder factories, starch production, fish and pet feed, production of grass capsules, and manufacture of flexible packaging films and FFS bags. Besides, the company is weighing partnerships for the production of plastic medical supplies.