How is the company expanding to increase the production of flour?
We expect to complete our expansion plans at the beginning of 2018. After that, we will receive government payments allocated for the strategic storage of our wheat from where we can begin selling our primary product. The Port of Sohar, for example, is an interesting location for us as many of our transportation activities take place right there, making it cost effective due to the already established logistics platform. The population of Oman is increasing by about 7% YoY, thus the demand for flour products is also increasing by roughly the same percentage. There is a great deal of growth potential, and we have partners that have the right experience. The right alliances in strategic food-related activities will help us become more sustainable and allow us to help the government achieve its vision for food security. The coming years will bring a great deal of competition—as new flour mills have entered the market—and we need to be prepared. Our strategy is to focus on our core businesses and produce quality products because, for us, customer satisfaction and loyalty are critical. We wish to remain their preferred brand of flour and bakery products.
What effect will investments from Libya and Japan have on the Omani food market and economy?
The Ministry of Commerce and Industry in Oman is opening up to foreign investment. This affects local producers and leads to higher competition and price fluctuations and, at the same time, addresses the food security target in a positive way. We are in the process of negotiating one of the largest agreements for egg production in the Middle East with Japan and other regional producers. Currently, around 60% of eggs are imported, and we have found that imported eggs are not up to the required standard. This is why we linked ourselves with one of the largest Japanese egg producers, who can provide technical support to produce quality eggs. Incentives like this one have helped the value of our shares increase year after year. Our budget for 2018 is USD30 million, and we plan on using it for sustainable projects.
What other markets does Oman Flour Mills export to now?
We export flour and bakery products to more than 10 countries in the GCC and Africa. We want to expand our export base, but at the same time wish to remain the leading and preferred producer of bakery and flour products in Oman. In terms of flour specifically, we are not looking across borders because competition is great, and our core strength is the local market. For the time being, we have many projects underway.
What objectives do you have for 2018, and how do you plan to achieve them?
2018 will be a difficult year. Oman is stable, though we have to be realistic; there is not much predicted growth in GCC countries. For Oman, 1H2017 marked a USD2.4-billion deficit. In 2H2017, it could reach USD5 billion, which, altogether, makes our debt about USD15 billion. Our rates and debt may be lower than Dubai, though that money will not be allocated to investment. It will go toward paying salaries, operating costs, and interest to maintain government loans. Companies in Oman have to be smart now in order to figure out where and how to make profit. It is beneficial to think about looking outward. Our company will remain sustainable due to the lower depreciation of equipment, as much of our equipment is fully depreciated. The truth is, we produce and sell a very basic commodity—flour, which is consumed universally. The 7% demographic growth will continue to bring more business to our market, and, if the government makes the laws a bit more lenient on investors, a great deal of business will come to Oman. Sustainability is key.