Major food logistics project on anvil in Oman

MUSCAT, MAY 25 - Oman Food Investment Holding Co SAOC (OFIC) — the government-owned food sector investment and development flagship — has invited local investors to support the establishment of an Integrated Food Logistics Project designed to underpin the growth of a robust food industry in the Sultanate. A detailed feasibility study undertaken by Frost & Sullivan on behalf of OFIH envisions the potential for the ambitious venture to evolve into a leading Integrated Food Logistics Player in Oman, as well as the wider GCC region. Total investments in the project over its three-phased development are estimated at RO 20 million.

The proposed venture, according to OFIH, will provide integrated freight and storage, temperature controlled and value-added services with a complete focus on the food sector. As the only logistics company of its kind in the Sultanate, the new company will oversee and handle supply chains across the poultry, dairy, red meat, fish and seafood, flour, fruits and vegetables segments of the food industry.

In a recent presentation to prospective investors, OFIH officials and their project consultants highlighted the importance of an end-to-end food logistics firm to support the growth of Oman’s increasingly vital food sector. Food imports, according to figures compiled by the consultants, account for 12 per cent of total imports. Around 47 per cent of imported and exported foodstuff requires temperature-controlled logistics support. Additionally, food demand is projected to grow from 4.7 million tonnes in 2017 to 6.9 million tonnes by 2040, at the annual rate of 1.2 -1.8 per cent.

Importantly, the proposed integrated food logistics firm is expected to create over 400 direct jobs during the first 10 years of operations. However, a further 1,400 indirect and induced employment opportunities will be spawned over the same timeframe, with significant implications for income generation and socio economic growth.

Project plans also envision the development of storage facilities at major consumption centres across the country. A hub-and-spoke model proposed by the project consultant moots the establishment of a central warehouse in Muscat Governorate with regional warehouses in Suhar, Al Kamil, Ibri, Nizwa and Salalah. Warehousing capacity is propose to be developed in three phases over the initial 10 year-long timeline of the project’s evolution.

A sizable part of the demand for food logistics services is expected to come from the growing array of food related businesses — both operational and under development — that are part of OFIH’s substantial investment portfolio. The list includes under-construction projects such as Mazoon Dairy, Atyab IFFCO Poultry, Al Bashayer Meat, Sohar Flour Mills, and Al Namaa Poultry, as well as the Oman Oilseed Crushing Co, Duqm seafood canning plant and the future commercial fishing fleet.

Also forming part of the captive market are Oman Fisheries Co, Oman National Livestock Development, Oman Flour Mills, Modern Poultry Farm, Sohar Poultry and Atyab Bakery. Furthermore, demand for food logistics services is also expected to come from companies that are not part of the OFIH Group. They include poultry farms currently in various stages of expansion, the Oman Sugar Refinery at Sohar Port, Sohar Food Cluster, Khazaen Economic City, and Public Authority for Strategic Food Reserves.