MUSCAT: Oman government is in the process of establishing a mega dairy project with a sizeable capital investment of OMR100 million, in a move to achieve self-sufficiency in dairy production and food security.
The joint venture is being promoted by state-owned Oman Food Investment Holding (OFIC), with active equity participation from private sector, Salim bin Saif Al Abdali, chief of follow-up and studies at Oman Food Investment Holding told Customs Today here the other day.
The OFIC will have a 20 per cent stake in the dairy firm, which will create 400 direct and indirect jobs, and the remaining 80 per cent stake will be given to investment funds (including pension funds) and private investors.
Oman Food Investment Holding is being established by the government to invest in food security projects, which focus on import substitution and rural development.
Apart from fresh milk, the dairy project is aimed at producing fresh juice, mineral water, laban and yogurt.
The total capital expenditure of OMR100 million will be by way of equity capital (50 per cent) and term loan from financial institutions.
Highlighting the significance of the dairy project, Al Abdali said that only 26 per cent of Oman’s 162 million-litre demand is met by local companies and the remaining 74 per cent is by way of imports, mainly from other Gulf Cooperation Council (GCC) countries.
“We need to improve our self-sufficiency and food security of Oman in main food items like dairy, poultry and red meat. This is the first among several projects that are planned (by the company),” Al Abdali said, adding: “Our plan is to raise domestic production of dairy products to 70 per cent of total demand by 2020.”
“We are going to start with 4,000 milking cows, but it will be increased to 25,000 cows by 2020.” The project will come up in a large area of four square kilometres.
He also noted that the long-term plan is to achieve more than 100 per cent domestic demand in dairy products and probably to export the product from Oman.
Al Abdali also noted that the work on the project would start this year and the commercial operation would commence after two years by 2017.
“We are also going to invest in another project outside the country (probably in Sudan or Tanzania) to secure feed for animals,” Al Abdali said, adding that it could be by way of a contract with a third party or by investing in a foreign country.
Oman has limitation in growing grass (feed) for animals due to water scarcity. “That is why we are going to bring feed from outside the country. We have discussions with some investors in Tanzania and Sudan. We may also look at reaching contracts with suppliers in Australia or Brazil for securing feed for animals.”
The company is in the process of identifying a location for the project, since it needs a large dry area.
