27 August 2008
MUSCAT -- The joint stock Salalah Mills Company SAOG has announced plans to invest around RO 13.6 million in the establishment of a combined plant for semolina and flour milling, as well as the enhancement of its wheat silo capacity. Plans to invest in new capacity were confirmed at a recent meeting of the company's Board of Directors.
The Board also resolved to increase the authorised capital of the company from RO 7 million to RO 10 million. Further, it agreed to increase the issued capital from RO 3.750 million to RO 7.5 million through a rights issue, and to allocate a percentage of this increased capital to employees.
The expansion of milling and storage capacity stem from the company's "strategic plans" to serve the local and export markets. Besides, the combined semolina and flour milling plant will meet the feedstock requirements of its new macaroni subsidiary currently under construction in Salalah.
Salalah Macaroni and Confectionery Company SAOC, which is 64 per cent owned by Salalah Mills, was established last year with a paid up capital of RO 2.5 million. Its pasta plant, which was conceived as a value-added venture, is expected to commence trial production before the end of this year.
From a strategic perspective, the new investments are in line with initiatives to meet demand growth for flour and wheat-based products, while at the same time offset the challenges posed by soaring international wheat and grain prices. In its 2007 Annual Report, the company's Chairman reported that the cost of wheat imports represented around 80 per cent of its total production cost, which forced the company to raise its selling price.
The company has since devised a new strategy, combining prudent procurement planning and expansion of wheat silo capacity, as a safeguard against the risks of high wheat prices. Earlier, the company had also announced plans to double the capacity of its wheat offloading facility at the Port of Salalah.
This project, which will reduce the waiting time of vessels and thereby contribute to freight cost savings, is expected to be completed by the end of this year. In unaudited results for the first half of this year, Salalah Mills achieved a 38 per cent increase in local flour sales, generating RO 10.4 million in total sales compared to corresponding figures for 2007.
Salalah Mills Co was established in 1995 as a joint stock company with the goal of milling and distributing premium quality wheat products, bran and feed to the Omani and regional markets. The company's state-of-the-art mill, located within the Raysut Industrial Estate currently boasts a milling capacity of 123,000 metric tonnes per annum, and a silo storage facility of 42,000 metric tonnes.
MUSCAT -- The joint stock Salalah Mills Company SAOG has announced plans to invest around RO 13.6 million in the establishment of a combined plant for semolina and flour milling, as well as the enhancement of its wheat silo capacity. Plans to invest in new capacity were confirmed at a recent meeting of the company's Board of Directors.
The Board also resolved to increase the authorised capital of the company from RO 7 million to RO 10 million. Further, it agreed to increase the issued capital from RO 3.750 million to RO 7.5 million through a rights issue, and to allocate a percentage of this increased capital to employees.
The expansion of milling and storage capacity stem from the company's "strategic plans" to serve the local and export markets. Besides, the combined semolina and flour milling plant will meet the feedstock requirements of its new macaroni subsidiary currently under construction in Salalah.
Salalah Macaroni and Confectionery Company SAOC, which is 64 per cent owned by Salalah Mills, was established last year with a paid up capital of RO 2.5 million. Its pasta plant, which was conceived as a value-added venture, is expected to commence trial production before the end of this year.
From a strategic perspective, the new investments are in line with initiatives to meet demand growth for flour and wheat-based products, while at the same time offset the challenges posed by soaring international wheat and grain prices. In its 2007 Annual Report, the company's Chairman reported that the cost of wheat imports represented around 80 per cent of its total production cost, which forced the company to raise its selling price.
The company has since devised a new strategy, combining prudent procurement planning and expansion of wheat silo capacity, as a safeguard against the risks of high wheat prices. Earlier, the company had also announced plans to double the capacity of its wheat offloading facility at the Port of Salalah.
This project, which will reduce the waiting time of vessels and thereby contribute to freight cost savings, is expected to be completed by the end of this year. In unaudited results for the first half of this year, Salalah Mills achieved a 38 per cent increase in local flour sales, generating RO 10.4 million in total sales compared to corresponding figures for 2007.
Salalah Mills Co was established in 1995 as a joint stock company with the goal of milling and distributing premium quality wheat products, bran and feed to the Omani and regional markets. The company's state-of-the-art mill, located within the Raysut Industrial Estate currently boasts a milling capacity of 123,000 metric tonnes per annum, and a silo storage facility of 42,000 metric tonnes.
By Conrad Prabhu
© Oman Daily Observer 2008
