Project to position Oman as global grain trading hub

MUSCAT, DEC 29

A Memorandum of Understanding (MoU) signed recently between Salalah Mills Company SAOG and the Port of Salalah will pave the way for the development of a Strategic Silos Project at Oman’s southern maritime gateway.

The initiative, to be implemented by Raysut-based Salalah Mills, has twin objectives: strengthening national food security and enabling Oman’s entry into the global grain trading market.

“This MoU represents an important strategic step that will contribute to enhancing food security in the Sultanate of Oman and further strengthen the Group’s position and role in the regional and global grain trade”, Salalah Mills said in a recent filing to the Muscat Stock Exchange.

While details on storage capacity, the number and size of silos, precise site location within the port area and implementation timelines have yet to be disclosed, the project is expected to significantly enhance Salalah Mills’ standing as a regional and international grain trading player. The initiative will leverage the Port of Salalah’s logistics infrastructure, maritime connectivity and cargo-handling capabilities.

Salalah Mills, one of Oman’s largest grain importers and flour producers, already operates extensive storage and handling infrastructure. The company currently manages wheat silos with a capacity of around 120,000 tonnes, in addition to total grain storage capacity of approximately 161,500 tonnes — the largest in the Sultanate of Oman. It also owns three grain unloading machines at the Port of Salalah with a combined discharge capacity of 1,200 tonnes per hour.

Underscoring its ambition to expand beyond domestic milling into international grain trade, Salalah Mills announced two years ago plans to establish a dedicated trading arm, Salalah Grains Trading International, at the Dubai Multi Commodities Centre (DMCC), a leading global commodities hub for agricultural products, metals and energy.

Global grain trading represents a sizeable opportunity for Omani players. According to Rabobank’s global grains and oilseeds map, international trade in grains and oilseeds reached about 880 million tonnes in the 2023–24 season, with an estimated trade value of around $330 billion. Major traded commodities include wheat, corn, barley, oats and rice, which form the backbone of global food and animal feed systems.

In support of its grain procurement and trading strategy, Salalah Mills last year issued 12.5 million new shares, raising RO 12.5 million through a private placement to UAE-registered ME (O) Solaris Investments Holding Limited, a leading grain supplier primarily sourcing from the Black Sea region. The company said the partnership would enhance supply chain stability, improve procurement efficiency and secure long-term sourcing advantages.

Further strengthening its regional footprint, Salalah Mills has also acquired a 50 per cent stake in Al Rayyan Salalah Co Ltd, a Yemen-based flour mill. The investment aligns with the company’s long-term strategy of expanding into high-growth markets, securing supply chains and increasing milling capacity to meet rising regional demand.