$620 million project to boost Sultanate's food security

Oman Food Investment Holding Company is moving forward with three projects at a total estimated investment of USD 620 million to set up massive dairy, poultry and red meat factories.

16 June 2015
MUSCAT: Oman Food Investment Holding Company SAOC, established by the government to invest in food security projects, is moving forward with three projects at a total estimated investment of $620 million to set up massive dairy, poultry and red meat factories. Mazoon Dairy Company SAOC, established a few months ago by OFIC, is in the process of establishing a RO 100 million ($258 million) fully integrated dairy farm, centralised processing plant, in the Wilayat of Al Sinaina of Al Buraimi Governorate, aimed at achieving food security in dairy production.

About 70 per cent of the capital investment for the joint venture is derived from state-owned entities, including Oman Food Investment Holding (OFIC 20 per cent), and other strategic investors, according to Salim bin Saif al Abdali, chief of follow-up and studies at the OFIC. The poultry project (named An Naama), estimated to cost RO 100 million will be set up in Ibri. It will produce 60,000 metric tonnes of poultry meat annually, three times more than the current yearly production of Asaffa Foods, boosting domestic production in a big way.

Currently, all the poultry farms in the Sultanate together meet just 30 per cent of the demand for poultry products in the country, and for the remaining 70 per cent the country is dependent on imports. Similarly a project for food security in red meat project, estimated to cost RO 40 million is also in the pipeline.

For red meat project, OFIC plans to import sheep and cows from Tanzania and Sudan and will set up slaughtering houses in Salalah.

Presently, Oman produces 20 per cent of the country's demand for red meat and the remaining 80 per cent is imported and the aim is to reverse this situation.

Expected to generate 400 direct and indirect jobs, the dairy project will produce fresh milk, fresh juice, mineral water, laban and yogurt and market them under the brand name "National Pride".

Experts say the Mazoon dairy project assumes great significance because hardly 27 per cent of Oman's annual 164 million-litre demand is met by local companies and the remaining 73 per cent is by way of imports.

The aim is to increase domestic production of dairy products to 70 per cent of total demand by 2020.

Mazoon dairy farm, once established, will initially have 4,000 milking cows, which will be gradually increased to a total of 25,000 cows. Commercial operation is expected to start by 2017.

Since Oman has limitation in growing cattle feed due to water shortage, OFIC is planning to set up a project outside in an Asian or African country such as Tanzania, Ethiopia or Sudan, to secure feed for the cows.

Set up in 2012, OFIC is a state-owned-enterprise mandated to promote food security in essential products.

Focusing on import substitution, rural development and export-promotion, OFIC is keen to improve Oman's food security in main food items such as dairy, poultry and red meat.

Oman needs to improve its food security in key food items like dairy, poultry and red meat on an urgent basis.

OFIC has several such projects in planning stages.

Omani authorities are also thinking beyond food security and self-sufficiency in that they want to ultimately be in a situation wherein they not only meet the domestic demand for dairy, poultry and red meat products but also leverage the competitive and comparative advantage of its strategic location by positioning Oman as a centre of excellence in food products and a hub for food processing activities.

Experts say food security today is not just about self-sufficiency, it is also about recognising the fact that food is a global commodity and a major force in that market.

© Oman Daily Observer 2015