MUSCAT: Oman Flour Mills Company (OFM), one of Oman’s biggest food producers, is weighing options to broaden its burgeoning partnership with Australian grain producers with a view to strengthening access to Australian wheat as part of its food security strategy.
This move builds on publicly-traded Oman Flour Mills’ recent initiative to establish a wholly-owned subsidiary in Australia to streamline the procurement of Australian wheat at competitive prices. OMAUS Ltd was set up last year to support direct imports of wheat and farm produce from Australian farm-growers.
That relationship with Australia is set to be further enhanced, according to Salah Hilal al Maawali, Chairman, Board of Directors – Oman Flour Mills.
“OFM is also working on evaluating farming opportunities in Australia; The company has evaluated a few properties,” he stated in the Chairman’s Report for fiscal 2022.
Al Maawali noted that the management is weighing plans to acquire farmland to grow wheat to be eventually imported into Oman to support the Group’s feedstock requirements. "The process to acquire the land has already been initiated,” he stated Meanwhile, a 34,500 metric tonne “trial shipment” of Australian Premium White (APM) grain is due to shortly arrive in Oman in the first such procurement organised by OMAUS Ltd directly with Australian growers.
“The Company is expected to achieve savings during the aggregation process, in addition the quality of wheat is expected to be better as the grains are sourced from fewer sources that giving better consistency,” said the Chairman.
To further diversify its procurement base, as well as support local farmers, Oman Flour Mills also signed an agreement to procure the wheat output of Omani farmers for a third consecutive year. Wheat offtake from local farmers totaled around 1,174 metric tonnes in 2022, up from around 300 MT in 2021.
Further, in line with its commitment to supporting the Omani government in securing the country’s basic requirement of staple commodities, Oman Flour Mills completed the construction of a major grain silo in Sohar Port earlier this year. The facility, with a storage capacity of 160,000 MT, has been labelled a “strategic national project’ that support’s the country’s good security goals.
Also making headway is the company’s plans to establish a cluster of mini food factories, the Chairman said. To this end, the company is in the process of shortlisting a consultant to study the top 10-12 industries that would become a part of the cluster. In addition, a food scientist has been retained to assist in new product development for potential products that could be included as a part of the cluster, Al Maawali stated.
Significantly, Oman Flour Mills – owned partly by the government represented by Oman Food Investment Holding Co (Nitaj), a subsidiary of Oman Investment Authority (OIA) – recorded total revenue of RO 118.66 million in 2022, up from RO 97.34 million a year earlier. It marked the first time that the Group achieved gross revenue of over RO 100 million in a fiscal year.
However, net profit after the tax declined 63.1 per cent to RO 1.75 million in 2022, down from RO 4.74 million in 2021. This was attributed to a 29.3 per cent increase in the group’s total expenses, fuelled by, among other factors, an increase in the purchase prices of raw material.