21 February 2017Turnaround strategy: Salalah firm to add dairy products, fruit juices, cold storage to its business activities -
Muscat - Salalah-based Dhofar Fisheries & Food Industries SAOG says it has obtained a fishing licence from the Ministry of Agriculture & Fisheries — a move that will help the company engage in ‘direct fishing’ operations to support its feedstock requirements rather than depend on less competitive imports and local procurements.
Direct fishing, according to the company chairman, is part of a raft of options being explored by the loss-making, yet operationally viable entity to achieve a turnaround in its financial performance over the coming years.
The company also plans to diversify its business activities beyond its current focus on fish processing and canning to include dairy products, fruit juices, and cold and dry storage. These plans were endorsed at an Extraordinary General Meeting (EGM) held on December 4, 2016.
The goal, according to Mahdi Mohammed Hassan Hassani, Chairman of the Board of Directors of Dhofar Fisheries & Food Industries, is to “maximise the utilisation of the existing production facilities” at its state-of-the-art plant at Raysut Industrial Estate in Salalah.
“This will result in efficiencies that will allow a more regular supply of the company’s products in the markets,” said Mahdi Mohammed.
“Management is also focusing to diversify its production to other product lines like dairy and juice products, and will concentrate on direct fishing. Management has planned to expand the cold storage, can storage, and packing area facility. The company has started the necessary arrangements for these (initiatives),” he added in the Directors’ Report on the company’s financial performance for the year ended December 31, 2016.
Direct fishing will be pursued either in-house or through arrangements with a well-established fishing company to help secure Dhofar Fisheries’ raw material requirements. Presently, local procurements are insufficient to satisfy the company’s needs, forcing Dhofar Fisheries to rely on imports to a significant degree.
“It will also allow (Dhofar Fisheries) to explore new business opportunities, such as trading in fish products of different species within its immediate markets and further grow to become a supplier of such products (found only in regional waters) to Asian and European buyers,” the Chairman said in the Management Discussion & Analysis Report.
Dhofar Fisheries achieved a turnover of RO 4.068 million in 2016, which was slightly higher than the previous year’s figure of RO 3.990 million.
The company posted a net loss of RO 0.797 million for the year, taking accumulated losses to RO 4.888 million as of end-2016. Net equity stood at RO 0.772 million as against the share capital of RO 2.540 million. In light of the capital erosion, an EGM is planned during 2017 to restructure the capital, the Chairman said.
© Oman Daily Observer 2017