Oman Flour Mills (OFM) Company, which once monopolised the Sultanate's flour market, has now to contend with aggressive competition. It plans to expand production capacity in the knowledge that the Omani population is growing and demand will have to be met. There is also optimism it can consolidate its position in existing foreign markets and find new ones.

OFM is 60 per cent owned by the Omani government and 40 per cent by the general public. Established in 1977, the company gained a reputation for the high standard of its products, thanks to the use of high-quality wheat and strict adherence to quality control codes.

The milling capacity, 150 tonnes per day at the time of commencement of operations, has now reached 800 tonnes. Following a feasibility study, the company is seeking to raise production capacity. OFM also makes animal feed, approximately 600 tonnes per day.

The grain storage capacity of 120,000 tonnes at Mina Sultan Qaboos, described as adequate now, will have to be raised for the expansion.

The additional capacity will also enable the company to house stocks purchased to take advantage of lower prices.

OFM has facilities to quickly absorb consignments that arrive in port. A pneumatic unloader discharges bulk grain from the vessel, which is then sent through an underground chain conveyor to silos located inside the Mina Sultan Qaboos complex. The discharge capacity is about 8,000 tonnes per day.

The grain is subjected to an elaborate cleaning process before it moves to the flour-making stage. Finance manager Mustafa Fatakdawala said the company, which in the past used Australian and Canadian wheat, had now become flexible, using cheaper wheat varieties including Indian and US. Buying cheaper stocks necessitates extra care. "Savings accruing from buying lower-priced varieties could be lost if quality is not checked before loading the vessel. About 80 per cent of the cost of making flour can be attributed to the cost of grain," said Fatakdawala.

OFM produces more than 20 varieties of flour and allied items under the brand name of "Dahabi", meaning gold. The range in baking bread products includes flour No. 1 (maida), white flour, flour No. 2 (atta), main top flour, self-raising flour and flour varieties for making Lebanese and French breads. Its health products are whole-wheat flour, bran, diet flour, wheat germ and wholemeal flour.

The speciality range comprises semolina, biscuit flour and pizza flour. The company also packs whole, unprocessed wheat in 40kg bags as well as jareesh (whole grain coarse particles used for making certain Arabic meat dishes) and harees, the polished form of wheat used for making a famous Arabic dish of the same name. The pre-mixes range comprises plain cake mix, chocolate cake mix, pancake mix, dumplings mix, strawberry cake mix and vanilla cake mix

OFM produces about 20 items of animal feed under the brand name of "Barakat". The range of feed mill products consists mainly of cattle and poultry feed such as ruminant general feed, horse cubes sheep cubes, dairy 18, layers, starters and finishers.

The company's products are exported to the Gulf, East Africa, Indonesia and the former Soviet states. Polished wheat called harees is trucked to Saudi Arabia regularly from the factory.

Raw material and finished products are verified to ascertain their compliance with standards at the company's state-of-the-art quality control laboratory. It also organises seminars from time to time to enhance understanding of ingredient functionality in baking and the correct baking techniques.

For one of the recent seminars it invited an advanced skills lecturer of the Regency Institute of Technical and Further Education, Adelaide, Australia, to conduct a theoretical and practical baking programme.

The intense competition affected margins and while the company did make profits for the year ended June 2001 they were lower than last year.

Revenues are also affected by price fluctuations, and while the company's officials may be assiduous in pursuing the best prices, there are times when they are defeated by forces beyond their control. Fatakdawala recalled how a deal in India was once aborted at the last moment when the proposed government policy regarding sale of grain stocks to overseas buyers did not take effect.

The company has one of the highest levels of Omanisation, 77.6 per cent, and the enviable distinction of having been recognised as one of the five best companies in Oman by Sultan Qaboos. The accolade was accorded to it for the seventh successive time last year.

OFM has another arm in the food industry, a company called Modern Poultry Farms, producing about 100 million eggs per year and in which it has a 54 per cent shareholding.