14 September 2014
MUSCAT -- Atyab Investment, the investment arm of Oman Flour Mills -- a public joint stock company engaged in the milling and food processing business -- will play a lead role, on behalf of the Omani government, in the development and operation of a major grain storage and handling terminal envisioned at Sohar Port.

The facility, which stems from the government's vision to establish a strategic food reserve in Sohar, also has the potential to kickstart the emergence of a strong agro cluster at the industrial port and adjoining free zone.  Equipped with a complex of silos, major flour mill and bulk grain handling facilities, the terminal is also expected to serve as a hub for trading in grain commodities for the first time in the Sultanate.

A waterfront site within the port that once housed the now-vacated Terminal-B facilities of Oman International Container Terminal (OICT) will be readied for the establishment of the grain terminal, according to a high-ranking executive of Port of Sohar.

"With the shifting of the container terminal to the new location, part of the area relinquished by OICT will be utilised for setting up the grain terminal. The operator (Atyab Investment) can now initiate the next steps to formalise agreements with us (Port of Sohar), the government, and others, to start working on the project," said Edwin Lammers, Executive Commercial Manager.

Conceived primarily as a strategic stockpile for food grains, the terminal will feature a complex of silos with a capacity to hold around 200,000 tons of grain commodities in the first phase.

This could be ramped up to a capacity of 300,000 tonnes in the second phase, according to the official.

"Atyab's role in this project is not limited to the flour mill alone. They will also develop the storage component and oversee the terminal handling as well. Funding for bulk commodity handling will be done by government. All the components required to operate the storage facility is the responsibility of the Public Authority for Strategic Food Reserves [PASFR], (a wholly government owned agency tasked with creating national stockpiles of food grains and other staples). This will be done through a (special purpose) vehicle, and Atyab will take on that responsibility on behalf of the government," Lammers added in comments to the Observer.

For its part, Port of Sohar is looking to leverage the grain terminal and related infrastructure to attract investment in agro-processing ventures, as well as support commodity trading activities.

"We are looking to have a market driven party in there that has the know-how and expertise about how you can do more with this facility. While the government's priority is the food reserve, we are looking to work with the operator to bring different types of agro-related industry to Sohar, utilising the same infrastructure and facilities. This will help bring down handling costs as well."

Importantly, the facility will also handle bulk raw materials that will be imported for a new sugar refinery under development adjacent to the grain terminal. Oman Sugar Refinery Company LLC (OSRC) is investing around $200 million in the construction of the Sultanate's first sugar refinery at the Port of Sohar with an initial capacity of 700,000 tonnes per annum in the first phase, expandable to 1 million tonnes within three years thereafter.

Longer term, the grain terminal is expected to stimulate the growth of an agro-cluster that will take advantage of the storage, milling and handling facilities offered at Sohar. Equally prospective is the emergence of commercial activities centring on agro commodities trading.

Food grains held in storage must be turned around at regular intervals in order to maintain their nutritive value stockpiles. Trading is one option to replenish silos with fresh supplies -- an activity that Atyab is expected to take upon itself.

Atyab Investment Co LLC aims to set up a 500-tonnes-per-day capacity flour mill at Sohar Port adjacent to the grain storage silos. Sohar Flour Mills will be equipped to produce a variety of specialty flours targeted primarily at markets in the Batinah North, Batinah South and Dhahirah governorates, as well as the GCC and international markets.  (OEPPA Business Development Dept)

© Oman Daily Observer 2014