islamic finance

Salalah Mills signs RO12mn loan agreement with Alizz Islamic Bank

October 20, 2022

Muscat – Salalah Mills Company has signed a loan agreement with Alizz Islamic Bank to obtain RO12mn financing for the construction of its proposed food industries project at Khazaen Economic City in Barka.

‘Salalah Mills would like to disclose to the shareholders and investors that it has signed a long-term loan agreement with Alizz Islamic Bank. The value of the loan is RO12mn for a period of 10 years for the construction of industrial bakery project in Khazaen Economic City,’ Salalah Mills said in a disclosure to the Muscat Stock Exchange on Wednesday.

The company had signed an investment agreement with Khazaen Economic City in October 2021 to establish an integrated food facility in the city. Under the agreement, Salalah Mills Company will lease a 20,000 sqm of industrial land to set up an integrated food production facility at Khazaen.

In a press statement issued by Khazaen in October last year, Ahmed Alawi al Dhahab, CEO of Salalah Mills, had said that the company will set up the food processing unit at Khazaen with an estimated cost of RO12mn.

He said that the first phase of Salalah Mills’ project will include an industrial laboratory and production lines for frozen and semi-cooked pastries. “In the second phase, new production lines for frozen cakes, snacks, noodles and biscuits will be added. Production at the facility is expected to start by mid-2023.”

As per its recently disclosed financial results, Salalah Mills’ total sales rose by 32.7 per cent to RO56.66mn during January-September period of 2022 compared to RO42.7mn recorded in the same period of 2021.

However, the company’s net profit dropped to RO408,601 in the first nine months of 2022 from RO1.26mn in the same period of 2021, mainly due to increased materials and operating costs.

Salalah Mills’ cost of sales and operating expenses increased by 35.8 per cent to RO56.26mn in the first nine months of this year against RO41.43mn in the same period of last year, mainly due to higher cost of materials amid rising global commodities prices.

muscatdaily

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