Oman’s OMR100m dairy project floats tender for building farm

Muscat: Mazoon Dairy Company, which plans to build a major dairy farm with a capital expenditure of OMR100 million to achieve self-sufficiency in dairy production in Oman, has started major initiatives to build the project in a large area in Buraimi.
A tender for pre-qualifyinglocal companies to develop the farm, dairy plant and associated facilities at Sunaynah in Buraimi has already been floated. The pre-qualified companies can bid for the main contract to develop a new farm, factory, offices, accommodation and associated facilities – all coming up in a large area of 1,500 hectares.
The proposed integrated joint venture dairy project plans to start with approximately 4,000 cows in 2017, which will grow to a herd size of 25,000 in 2026. The company will produce approximately 202 million litres in 2026, which will go up to 985 million litres in 2040. This, along with increase in existing production and the new milk collection scheme being promoted, will reduce the import dependency from 69 per cent in 2014 to 13 per cent in 2026.Apart from fresh milk, the dairy project is aimed at producing fresh juice, mineral water, laban and yogurt, according to earlier reports.
Mazoon Dairy has a capital outlay of OMR100 million with a debt-equity ratio of 50:50.The contribution of state-owned Oman Food Investment Holding, which was established to achieve self-sufficiency in dairy production and food security, in the equity capital of the joint venture is 20 per cent. Oman Food Investment Holding is being established by the government to invest in food security projects, which focus on import substitution and rural development.
The project opens huge opportunities in the employment sector in Oman. The project is expected to reach around 90 per centOmanisationwithin 10 years. The company will employ approximately 2,300 staff in the tenth year and will also provide indirect employment through forward and backward linkage effects of the project.
According to reports, merely31 per cent of Oman’s 162 million-litre demand is met by local companies and the remaining 69 per cent is by way of imports, mainly from other GCC countries.
The long-term strategy is to achieve more than 100 per cent domestic demand in dairy products and probably to export the product from Oman. It is expected that Oman will become a net exporter of dairy products by 2040.