With an aim to become the leading food manufacturer in the sultanate, Oman Flour Mills Company (OFM) is evaluating multiple projects across the group for future expansion.
The new projects will focus on integration across the value chain as well as diversification into new ventures, OFM said in its annual financial report submitted to the Muscat Securities Market.
The company said it is considering the potential of setting up a fish feed manufacturing facility. The boost and focus on fish farming in Oman will drive the demand for aqua feeds in future. OFM is the market leader in animal feeds and will look to diversify its offering to include aqua feeds, OFM said.
As part of its future expansion strategy, OFM is currently exploring the opportunities of working directly with producers and hopes to achieve better price and consistency of raw materials through this initiative.
OFM, as per the company report, is also evaluating the possibility of setting up a pre-mix facility. This will help the company reduce the cost of pre-mixes used in feed milling. There is a potential for selling pre-mixes in the open market, which the company is looking into.
The company is also looking to leverage its experience in handling corn and expand into wet milling of cornstarch and its derivatives. Cornstarch and its derivatives have wide usage in food applications.
On the product-offering front, OFM said its plans to launch new products are progressing well and it expects new products to hit the market in the upcoming months. The company is looking to diversify into the healthy snacking and breakfast cereal market and plans to start trading in these products once the market situation improves.
Additionally, OFM is looking at developing an industrial cluster for various mini factories. The aim of these mini factories is to set up small scale manufacturing units designed to meet the requirements of Oman, the company said.
OFMs subsidiary Atyab Food Industries is also looking to install new product lines for donuts, samosa leaves and variety products. In addition, Atyab Food Industries is looking at setting up a new facility in the next two-three years.
The market requirement for its bakery products is increasing and the company would need additional facilities and lines to meet this requirement, OFM said.
OFM, however, noted that the current COVID-19 pandemic has suppressed the market activity and the group would cautiously approach new investments until the situation improves.
Along with its expansion and diversification strategy, OFM said it will continue to strengthen and develop its core businesses of flour and feed.
OFM Groups net profit for the year 2020 grew to reach at RO9.01mn as compared to RO5.7mn net profit recorded in the previous year.
Total group revenue increased by 8.25 per cent to RO94.05mn in 2020 compared to RO86.89mn in 2019. The highest growth, OFM said, was witnessed in the milling segment, while a decrease was observed in the bakery segment that was influenced by the coronavirus outbreak.
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