By Business Reporter — MUSCAT: FEB. 25 - Food consumption in Oman is likely to grow at a CAGR of 4.5 per cent to 3.9 million MT in 2021 from an estimated 3.1 million MT in 2016. This growth is attributable to a 3.1 per cent and 2.4 per cent annualised increase in population and real GDP, respectively during the period, according to the GCC Food Industry report published by Alpen Capital, an investment banking advisory firm.
Further, demand is likely to be supported by tourist arrivals that are anticipated to increase on the back of the government‘s plan to strengthen the tourism sector through development of tourist spots and by encouraging private investments.
Dairy consumption is likely to witness the fastest growth at 6.1 per cent between 2016 and 2021, followed closely by cereals consumption at 5.4 per cent. While the consumption of cereals is set to rise due to its prominence in the daily meal, that of dairy is driven by increasing awareness about the associated health benefits. To meet the growing local demand for dairy, Mazoon Dairy Co is expected to soon commence operation of a $260 million dairy project, substantially reducing the country’s import dependency. Consumption of fish is also likely to increase in the country going forward, contributing to the 5.2 per cent annualised consumption growth in the others category.
Oman has remained active in strengthening its food security by increasing domestic production, as part of its plan to raise the agricultural contribution to 3.1 per cent of the GDP by 2020 from 1.6 per cent in 2015. The government is developing four mega projects to boost self-sufficiency of red meat, dairy and poultry. These projects, undertaken by state-owned Oman Food Investment Holding with an investment of RO 270 million are likely to commence production over the next three years.
The government is also supporting the local fisheries sector through an investment of $1.6 billion under the National Fisheries Development Strategy 2013-2020. The strategy aims at increasing fisheries production from over 200,000 MT in 2014 to 480,000 MT by 2020 and creating 20,000 jobs. As part of the plan, the government will build a Fisheries Industrial Zone in Al Duqm SEZ, encompassing 60 processing facilities, cooling and freezing stores, and ship maintenance and repair workshops.
The report presents the state of the food industry while covering demand-supply dynamics across various food categories in the GCC nations. The report also covers the recent trends, growth drivers, and challenges in the industry, along with the sector outlook until 2021. The report profiles some of the prominent food companies in the region, while highlighting their financial and valuation metrics.
“We expect the GCC Food industry to grow at a sustainable pace. This growth is primarily attributable to factors such as growing population, higher per capita income, and a vibrant tourism market, changing dietary habits and preferences, and increasing penetration of organised retail. Government as well as private sector investments are being channelled towards augmenting the domestic food production capacity and supply, even as securing food sources in other resource-rich countries remains a key priority,” says Sameena Ahmad, (pictured) Managing Director, Alpen Capital (ME) Limited.
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