Oman's Salalah Mills to establish $19m flour mill
The project, which is due for operation by 2017, will be funded 50-50 through the issuance of new shares, as well as through facilities provided by the machinery supplier
Oman's Salalah Mills will invest $19.4m (OMR7.5m) in setting up a new flour mill, which is expected to boast production capacity of 600 metric tonnes a day.
The project, due for operation by 2017, is likely to make the Raysut-based firm's the largest flour mill in the Sultanate.
The company's board of directors agreed to expand the firm's existing mill capacity on Thursday, 27 August, 2015.
"The new production expansion project comes within the company's strategy to promote the company as the biggest flour mill in Oman and one of the largest flour mills in GCC countries," Ahmed Alawi al Dhahab, CEO of the firm, said in a filing to Muscat Securities Market, on Sunday, 30 August, 2015.
With the establishment of the mill, Salalah Mills expects to "exploit the company's earlier investment in increasing grain storage capacity and higher discharge rate of wheat in the Port of Salalah".
Up to 50% of the project's total cost will be financed by facilities provided by the machinery supplier, while the remaining 50% will be funded through the issuance of new shares.
The company's board decided to raise the paid capital of the company by 10%, through the issuance of rights preference shares to its shareholders.
The shares will be issued in the first quarter of 2016, at a price of OMR0.750 per share.
Salalah Mills' current production capacity is 1,500 metric tonnes per day, Oman Daily Observer reported.
The company achieved 94% capactiy utilisation last year, and 100% utilisation in the first half of 2015.