Capital Intelligence has assigned a BBB- corporate rating to Oman National Dairy Products (ONDP), the first manufacturing company in the Sultanate to receive an internationally comparable rating.

A producer of milk products, fruit juices and ice-creams, ONDP has grown steadily over the years to become one of the largest food and beverage companies in the country, with a well-recognised brand of fruit juices and milk.
The company is 31 per cent owned by W J Towell and 19.2 per cent by Ominvest. Its products sell both in domestic and overseas markets, with exports constituting about half of total sales.
Current strategies focus on expanding exports, particularly to the GCC region. In Oman, it aims to expand its market share through distribution tie-ups and new product launches, which will improve the utilisation and efficacy of its cold chain infrastructure.
The product range is also being widened. ONDP has taken steps to improve its inventory and receivables management and the results are encouraging. Its plant has been modernised and capacity expanded to accommodate future growth in volumes.
Some of ONDP’s financial ratios are currently weak due to a high level of short-term borrowings taken a few years ago to fund its plant expansion. However, borrowings are being restructured and key ratios are expected to improve by year’s end.
Some initial improvement was seen last year after ONDP received new capital and a government soft loan. Future growth hinges upon the success of new projects with strategic partners and the implementation of its overall strategies for the domestic and export markets.
CI believes that the company has taken the right steps to strengthen its financials and that its sales and earnings will be stable going forward. Its good ownership, strong management and sound strategies provide sufficient safeguard against its somewhat high operating risk in the short-term.
Between 2001 and 2003, the company went through a serious restructuring of its sales and marketing network while also expanding its product range, upgrading its packaging processes and investing in IT systems. These measures were taken after the company made losses in 1999 and 2000. Other initiatives to boost turnover include the forging of strategic alliances with Omani companies National Mineral Water Company and Dhofar Cattle Feed Company.  ONDP is conducting joint distribution operations with the mineral water company, while the agreement with Dhofar Cattle Feed is aimed at helping both parties to leverage the extensive cold chain distribution infrastructure.
The company’s core products are long- and short-life milk and fruit juices, fermented milk products, milk powder, cheese, ghee, butter and ice-cream.  Most of the products are marketed under the brand name Zain.
ONDP is a household name with Zain having a strong brand identity throughout the Gulf. Within Oman the company is a respected establishment and has gained plaudits for having lifted itself out of a period of losses. ONDP has also been able to withstand strong competition from other GCC brands that are freely available in the domestic market.
The company has at some time or the other been an approved supplier to leading businesses and organisations including Gulf Air, British Airways, Oman Aviation and Burger King. It has also undertaken contract packing for several multinational brands and has won accolades including the Sultan Qaboos Cup for Industrial Excellence, the Gulf News-DHL award for best Gulf Enterprise and the Golden Europe Award for Quality.