CREAM OF THE CROP

Oman 2018 | AGRICULTURE | INTERVIEW

TBY talks to Dr. Arjun Subramanian, General Manager - Project at Mazoon Dairy Company, on reducing dairy supply deficiencies, reaching new capacity targets, and sourcing the best cattle.

Dr. Arjun Subramanian
BIOGRAPHY
Dr. Arjun Subramanian is a dairy professional with 21 years of experience in project management, execution, and commercial operations of integrated projects throughout the region and beyond. Before joining Mazoon Dairy Company, he worked on integrated dairy projects with Dubai Investment’s Marmum Dairy Farm (UAE), FDPI India’s project, UAE-based IFFCO’s projects in Malaysia and Turkey, and OADC in Oman. Mazoon Dairy Company is his latest integrated dairy project, and Subramanian is heading the project team in planning and implementation.

What is the background of Mazoon Dairy Company?

The Mazoon Dairy Company is a private equity initiative, supported by the Food Security Policy of the Sultanate of Oman. This project is supported by government institutions and investors. The vision and mission of Mazoon Dairy Company is to meet the dairy and nutritional needs of the Sultanate and grow the country's net food exports. There is approximately 5-6% growth in dairy consumption every year, and 70% of the market needs within the GCC are imported. The goal of Mazoon Dairy Company has been to plug this deficit and stimulate the local dairy industry. Unlike other dairy farms around the world, Mazoon Dairy consists of a fully integrated facility that includes a dairy farm, processing plant, packaging facilities, and even marketing and logistics facilities under one umbrella. Our products include fresh milk, flavored milk, yogurts, juices, cheese, and ice cream. We will bring the latest technology in dairy and juice production, aiming for maximum consumer satisfaction and a leading position in the global market in the near future.

What are your commercial production targets for 2018?

Our production plan is made up of two phases. Under Phase I, Mazoon Dairy Company plans to produce approximately 360,000 liters of milk and juices over a four-year period. Under phase II, the plan is to produce approximately 750,000 liters of milk and juices over a 10-year period. The farm will house approximately 8,000 cows from the Europe, the US, and Australia in 2018 and 2019, with around 4,000 animals arriving in the first year and the rest in following years. We have plans to grow the herd naturally at the farm, and our target is to house a total of 25,000 by 2028.

Why are you sourcing your cattle from these specific countries?

We have to ensure that our cattle are high milk producing and disease free, which is why we source them mostly from Europe, Australia, and the US. However, it is important to note that the highest-milk-producing cows in the world do not come from the Netherlands or New Zealand, but from hot countries such as Saudi Arabia, where cows produce an average of 40-45 liters per day. In the absence of suitable climatic conditions for cattle rearing, the region has had to compensate with good genetics and technology to enhance productivity. Capital investment in technology—quality housing systems and cooling systems—is expensive. This is why we focus on genetically superior cows.

Are your product branding and export plans already in place?

Mazoon Dairy Company is a unique project. The region has not seen a project of this scale and magnitude in the past 30 years. Mazoon Dairy, however, will produce dairy and dairy-related products such as ice cream and cheese along with range of juice products. Other existing projects in the region have evolved over the last 30 years in terms of quality and their portfolio, but Mazoon will make its full line of products available from early stage. We have conducted a comprehensive market study to assess local demand and will look at filling the supply deficit. We are not only focused on setting up a dairy farm and importing the best cattle, but we want to establish a sustainable organization and business. Our OMR100-million (USD259.7-million) project is 50% funded by shareholder equity and the other half is funded by banks. The plant is being developed by the PM Group from Ireland, while the farm is being undertaken by Jake & Martin from the US, which specializes in hot climate farming. We have already carried out some preliminary construction, completing the fencing, roads, and site office. The main construction is scheduled to begin by the end of 2017. We expect to be up and running toward the end of 2018.