Salalah Mills plans to build OMR7.5m-flour mill

31/08/2015 07:33 AST

Salalah Mills Company is planning to build a new flour mill with a production capacity of 600 tonnes per day in a move to develop the company as the biggest flour mill in Oman and one of the largest in the Gulf region.

The company’s board has decided to proceed with the expansion plan, following a feasibility study conducted by Expert House.

“The project cost will be about OMR7.5 million. The new mill is expected to commence production in the first quarter of 2017,” Salalah Mills said in a disclosure statement posted on the MSM website.

The current production capacity of Salalah Mills Company is 1,500 tonnes per day.

The company’s board also decided to raise paid capital by 10 per cent by way of a right preference issue to shareholders in the first quarter of 2016, at a price of OMR0.750 per share.

“The new production expansion project comes within company’s strategy to promote the company as the biggest flour mill in Oman and one of the largest flour mills in GCC countries and exploit the company's earlier investment made in increasing grain storage capacity and higher discharge rate of wheat in the Port of Salalah,” added the statement.

As many as 50 per cent of the cost of the new project will be financed by the facility from the machinery supplier and the balance 50 per cent by issuing new shares.

Salalah Mills reached 94 per cent capacity utilisation last year and has attained 100 per cent utilisation in the first half of the current year. The expansion project will provide flour for growing demand in the domestic market and export markets, which is sold under the brand name ‘Al Khareef,’ known for its premium quality.

Salalah Mills Company early this month said that it is also setting up a project for manufacturing polypropylene bags with a capital expenditure of OMR4 million.

The project, with an installed capacity of 48 million bags per year, is expected to start commercial production by the end of next year, said the company. The project will be financed by facilities from equipment suppliers and term loans.

Times of Oman