In an exclusive interview with Muscat Daily, Dr Arjun Subramanian, chief executive officer of Mazoon Dairy spoke about the company's future expansion plans. He said in the first phase, which will continue for next four years, the plans are to expand the herd size to 15,000 animals, and later in the next phase total number of milking animals will rise to 25,000.
Mazoon Dairy recently announced the import of around 3,400 cows from Australia and is looking to start production soon. Going forward, what type of capacity expansions can we see in future?
We recently started our operations by importing 3,400 animals from Australia. This year, we hope to increase the number of milking animals by importing between 3,600 to 4,500 more animals. Next year also, we will import more animals. Our plan is to increase the herd size to 8,200 animals by the end of 2020. So, in a span of less than two years, our herd size will grow from 3,400 to 8,200.
Can you explain the rationale behind choosing Buraimi region as the location for this large project over Dhofar, which has higher water availability and moderate weather conditions?
We have tried to avoid the coastal region because of higher humidity, which is a stress factor for farm animals. So we needed to go interior away from the coastal belt. We also need water and there is plenty of fresh underground water available in
Buraimi. We are importing high-yield cows and need to ensure the animals' comfort. Now, the highest milking cows are not in cooler places like Holland or Switzerland, they are in the middle of desert in Saudi Arabia. These cows are heavy animals, they don't like hard surface and the natural bedding is sand.
So there were reasons to select this particular location, which has low humidity, sand and availability of ground water. The location shouldn't be far from ports and there is a close proximity to Muscat and Sohar, which are our primary markets. Moreover, Buraimi is near the UAE border, so there is always a possibility of exporting to the UAE market also. All these factors put together indicates that this is a good location to set up the project.
By when are you planning to reach the maximum production capacity?
Our aim is to have around 15,000 milking animals by the fourth year of operation. We will keep expanding the herd size, and by the time we reach 10th year of operations, Mazoon Dairy will have a herd size of around 25,000 animals. The investments of RO100mn announced by us are for the phase one only, which will be utilised for increasing the capacities till fourth year. After that, there would be an increase in capacity based on plans, which we will be finalising for other phases, but after that investments would be minimal as we have already laid the foundation for future growth. Moreover, by that time, there would be an inflow of cash from operations also.
So by the time you reach the figure of 10,000 animals, how much fresh milk Mazoon Dairy will be producing per day?
Once we reach the full capacity of phase one in the fourth year of operations, we expect to produce approximately half a million liters of liquid milk every day. And when we reach to 10th year of operation, our target is to reach 1mn liters of liquid production per day. However, a portion of this 1mn liters target would also come from production of juices.
How would you tackle competition from other brands operating in the country, they are big regional players with big pockets and higher economies of scale?
Mazoon Dairy will have its share of market. I am saying with all respect to other brands operating in the segment. We will get established here due to the high quality products, which we will be offering and soon you will find our products on the shelves in markets. Mazoon Dairy will set its own course of action and we know that there will be competition. We would be mainly banking on the strength of Mazoon Dairy and will be leveraging on the fact that our product will have the advantage of being a fresh product. We believe that there is a huge demand for local fresh products of superior quality and I believe we could fulfill that demand. We even hope to reverse the direction of logistics and soon Mazoon Dairy products will be sold in neighbouring market also.
What approaches will you be taking for brand building exercise?
We have a well thought strategy in place and we will be working in this direction. Brand building is a big exercise and we will have everything sorted out according to the plan. We will be hitting the market with a right plan and strategy. We will take actions to build a visual identity or an image of our brand, and will also work for product positioning and market positioning of our products in the market. Everything is hidden in our pocket and will reveal these details at the right time and right place.
How many jobs do you think Mazoon Dairy project can generate, and what steps are you taking for providing training to local youths?
We are very happy to inform that the current level of Omanisation in our company is around 60 per cent. And as we go along, we will be training Omani youths for working in the project. We have already sent a batch of Omani youths to Amul, India for technology training and they are going to be future leaders. Currently, we have trained 20 local youths in technology and we have another 100 people in sales and distribution team, all Omanis. Going forward, we are going to recruit around 2,000 people for various jobs in the next ten years, and our target is to achieve 70-80 per cent Omanisation in the future.