MUSCAT: Salalah Mills has agreed to invest RO 7.5 million in the establishment of a new flour mill with a production capacity of 600 metric tonnes per day -- a move that is set to effectively position the Raysut-based firm as the largest flour mill in the Sultanate. A decision to expand the firm's milling capacity was adopted by the Board of Directors at a meeting held on Thursday. "The new production expansion project comes within the company's strategy to promote the company as the biggest flour mill in Oman and one of the largest flour mills in GCC countries and exploit the company's earlier investment in increasing grain storage capacity and higher discharge rate of wheat in the Port of Salalah," said Ahmed Alawi al Dhahab, CEO, in a filing to the Muscat Securities Market (MSM) yesterday.
Fifty per cent of the cost of the new project will be financed by facilities provided from the machinery supplier and the balance 50 per cent through the issuance new shares. Towards this end, the Board resolved to raise the paid capital of the company by 10 per cent through the issuance of rights preference shares to shareholders in the first quarter of 2016 at the price of RO 0.750 per share. The current production capacity of Salalah Mills Company is 1,500 metric tonnes per day. The company reached 94 per cent capacity utilisation last year and 100 per cent utilisation in the first half of the current year. The new expansion will support the expanding requirements of the domestic and export markets. Flour is sold under the brand name 'Al Khareef'. The new mill, the feasibility of which has already been studied by a consultancy firm, is expected to commence production in the first quarter of 2017, the CEO added.
© Oman Daily Observer 2015
