TABLE OF CONTENTS

SNO CONTENTS PAGE NO

1 MISSION STATEMENT 2
2 VISION 2
3 CORE VALUES 2
4 EXECUTIVE SUMMARY 3
5 PROJECT VALUE 3
6 PRODUCTION CAPACITY 3
7 PRODUCTION PLAN 4
8 MARKETING STRATEGY 4-5
9 TARGET MARKET SIZE 5
10 SOME PROSPECTIVE CUSTOMERS 5
11 PRICING BASE 6
12 MAJOR BUSINESS RISKS 7
13 PRICE RISK 7
14 DEFAULT RISK 7
15 COMPETITORS RISK 7
16 OTHER CHALLENGES 7
17 TEAM BUILDING 7
18 CASH FLOWS MANAGEMENT 8
19 PROJECTED FINANCIAL HIGHLIGHTS 8
20 ESTIMATED WORKING CAPITAL FACILITY 9
21 BRANDS 10-15

HANOON EDIBLE OIL PROJECT, SOHAR, SULTANATE OF OMAN

MISSION STATEMENT
To make available the best quality and competitive price range of edible oil
products in the market.
VISION
Healthy diet for the Healthy minds and bodies.
CORE VALUES
● Strong quality control through the best refinery facility. Delight customers
with superior quality and healthy products.
● A customers-oriented variety of edible oil products availability.
● The implementation of ethical practices building valued teams, valued
customers, valued suppliers and valued management.
● Ensure stable organization growth and give long valued benefits to all
stakeholders.

EXECUTIVE SUMMARY
The Hanoon Edible oil project is one of the major projects launched by the Hanoon
Modern Projects LLC, Oman.

The group management took an initiative to start an Edible oil refinery project in
2016. The factory was completed and started operations in mid of year 2020. The
production capacity of the plant is 18000 MT/month for filling & packing unit and
6000MT/month for Refinery unit. It is 2ndd largest in the Middle East and the
largest one in Sultanate of Oman. The edible oil constitutes a major product of the
consumer food business and is an ingredient of almost all cooked foods. According
to various market studies the edible oil consumption per person varies from 24
liters per person to 14 liters per person for different nationalities and races. In
Arabs the consumption is on the higher side whereas the consumption for other
Asians and European countries is on the lower end. The major market is GCC
countries and the Africa.
The plant failed to be fully operational due to lack of working capital. However,
with meager capital available the management worked on their presence in market
during COVID 19 pandemic and build strong customers base.
The business is good in earning profits and its importance has increased during
COVID 19 and post COVID 19 and the broke of war between Russia and Ukraine. The
gross margins of industry are raised from 15% to 30% during COVID 19. However they
are still higher.
As we are new in the business and we currently depending on Palm oil sales as it
takes time to build name in Sunflower in presence of Areej and Afia we kept the
gross margins at low. Once we will be able to create the good position among the
competitors we believe to raise profits to twice as took in projected financials.
PROJECT VALUE
The project cost incurred is USD 61.5M comprising refinery facility from Alfa Laval
Malaysia and the filling & packing facility from SERAC France & HUSKY Canada. The
land is under lease from Sohar Industrial Area for 30 years.
PRODUCTION CAPACITY
The refinery production capacity is 200 TPD that is 6000MT per month, however, as
per Alfa Laval Project team we may get production up to 7000 MT per month. That
will fulfill the requirement of 3.240M population size at 24 liters per person per
annum consumption level and 4.860M population size at 16 liter per person per annum
that is larger than the Oman population size.
The plant make is Malaysian, one of the best companies, Alfa Lavalin.
The Filling & Packaging unit capacity is 600 TPD that is 18000 MT per month, that
is; 03 times of the Refinery production.
PRODUCTION PLAN
The production plan depends on demand of finished products, plant capacity,
sufficient funds availability, strong management, best human resources, strong
logistics, procurement planning and after all above in pace the strong marketing
strategy. The demand is a major factor deciding the required production activity,
subject to all necessities as discussed above.
We started the factory for trial run from the meager working capital and to
understand the market in June 2020. The results were convincing. However, as the
funds were not pumped in by the leading bank as the major stakeholder and the
financial limitations of the group, we were not able to expand the operations as
per the demand.
If sufficient funds are provided for meeting the working capital needs, we strongly
belief to run the factory successfully.
MAJOR SUPPLIERS:
1) PALM TOP MALAYSIA FOR PALM OIL
2) DELIMA MALYSIA FOR PALM OIL
3) WILMAR UKRAINE FOR SUNFLOWER OIL
4) EMIRATES POLY PACKAGING FOR TIN UAE
5) BALME LAWRI UAE
6) RELIANCE INDUSTRIES INDIA FOR PET CHIPS
7) LOCAL SUPPLIERS FOR INGREDIENTS, SPAREPARTS LIKE SEASONS TRADING.
 NOTE: SIAPI ITALY, HUSKY GERMANY, ALFA LAVAL MALAYSIA ETC. FOR MACHINE SPARE PARTS
etc.
MARKETING STRATEGY
The market strategy is a back bone of the FMCG including Edible Oil. The practical
and risk averse market strategy is needed to acquire reasonable market share and
stable growth of the company. The successful market strategy depends on to what
extent we succeeded in meeting customers’ satisfaction. This can be achieved by
providing a qualitative product, having a strong market information system enabling
us to know the market size, competitors’ behaviors, encompassing changing customers
demand from the product; pricing based on cost changes and customers behaviors etc.
Further, we should have a strong sales network, credit policy, staff integrity,
cash flow management etc. The other challenges are the Government policies, pricing
of logistics, payroll structure, and debt pricing etc.
Hopefully with the advanced technology minimum manual dependence of refinery and
packaging units from lead international suppliers, available retail and wholesale
network in GCC, we will be able to base our market strategy on strong
fortifications to compete with the existing big names in the market and get our
targeted shares in the shortest possible time.
For the sales of Palm Oil, we have to penetrate in the whole sales and the
distributors business and lesser reliance on the modern trade and the digital
marketing. By maturing the business deals in pipeline we may sale 5000 MT per
month.
For the SFO and the other edible oils the market is quite smaller than Palm oil
market. Despite the fact we have business deals in pipeline up to 750 MT per month,
we decided to start with nominal production of 100MT to 200 MT initially.
TARGET MARKET SIZE:
SOME PROSPECTIVE CUSTOMERS (PROJECTED DEMAND IN METRIC TONS PER MONTH):

We have business in pipeline of more than 6000 Metric tons per month.
In Modern Trade we are dealing with Lulu, Nesto, Carrefour, Al Amri, Felaj
hypermarkets etc. Hopefully, it will add 500 MT businesses for all types of oil. In
addition to it we dealt in past with Catering and Charity institutions like
Renaissance and Bahwan etc.
The existing sales and marketing strategy has certain limitations due to funds
availability. If RO 3.0M will be provided we will be able to address 50% of the
projected demand. It will be almost 1600MT above the break-even (excl. LTL interest
factor) and 172MT (incl. LTL interest).
PRICING BASE
The price base for sales to wholesalers and retails sectors is as per market
available rates in GCC. The rates are obtained from our wholesale and retail
businesses and other information sources. We kept the rates lower by 0.500 pzs to
0.700pzs per selling unit.
The GCC edible oil segment's historical basis is 12% palm oil and 25% sunflower oil
(The PwC Market study for GCC has been obtained in year 2019). The COVID 19
pandemic and the war between Russia and Ukraine has positive impact on Edible oil
margins on scarcity principles of Robbins Theory.
Our major customers are Hotels and Restaurants, Retailers, Wholesalers for Food &
Nonfood businesses and lead contracting companies running their own catering
services.
PRODUCT MIX
We are initially selling palm oil, sunflower oil, blended oil (palm & sunflower)
and olive oil. However, by the passage of time and in view of future market trends
we are capable of processing in a refinery all types of edible oil except the olive
oil and sesame oil.
BRANDING
Branding is also a very important activity like marketing to expand the sales of
the product. We have introduced initially following brands;

● HAWA Palmolien
● WAZHA Blended
● ZUHUR Sunflower
● NAQI Olive Oil

In future we will introduce more brands in the market to grab the market demand in
GCC and Africa.
MAJOR BUSINESS RISKS
PRICE RISK - MARKET TRENDS OF CRUDE OIL PRICES
The edible oil market is subject to high price volatility and has been generally
observing a decreasing trend in recent years Before COVID19. During pandemic the
prices started rising to more than double. However, in the last few months, there
is a slight fall observed in crude oil prices. Due to Russia Ukraine war there was
kink towards higher side for a month. However, it is diluted and the market is now
showing stable look again.
The purchasing at the right time is one of the success factors for running the
plant in positive operating cash flow. The plant has enough storage capacity to
store 02 months crude oil at 200 TPD to safeguard against sudden crude oil price
hike in the short run.

DEFAULT RISK
The default risk factor had increased in the last in GCC due to market volatility.
The Palm oil market is cash market except a part of modern trade however, our
market model is lesser dependent on it. Further, we will address it by adding the
risk factor in market prices offer to modern trade.
Further, our presence in GCC especially in Yemen, Oman and Qatar will definitely
support us to reduce default risk by selling the output through our retail and
wholesale shops and by selling to market stable wholesale and retail players.
COMPETITORS RISK
Our major competitors are Areej, Oman Vegetable Oil, Afia, KSA & Sudan and IFFCO,
KSA. Areej and Afia are running their own brands; however, the Oman Vegetable Oil
and the IFFCO are refining and doing packaging for the major market distributors.
Areej is selling on average 13000 MT per month and Omani Vegetables are selling on
average 7000 MT per month.
The market leader in GCC and Africa is the Afia brand of Savola Group, KSA. The
competitors’ risk is on the higher side. However, the group retail and wholesale
business will provide coverage against the same.
The Group has presence in Saudi Arabia, Qatar and Oman. Further, the management is
trying to get into good distribution deals with African, Saudi and other Middle
East countries sales distributors. We are planning to start with 3700MT that is to
be achieved in the first 06 months. We have a business pipeline of almost 6,500 MT
per month only in Oman, Yemen, Qatar, UAE and KSA.
OTHER CHALLENGES:
Team building:
We have hired seasonal management from Savola, IFFCO and well reputed companies of
Middle East and Africa for production and packing units. We have a sales network in
the GCC major markets of Saudi Arabia, Yemen, UAE, Qatar and Oman.

Cash Flows Management

Adequate cash flows must be available to complete targeted production in time and
compete with major market players in giving credit to the prospective customers.
The operating cycle for Palm oil from the Order level to collection from customers
is 45 days. However, we have taken it for 60 days initially. It will be improved
over the passage of time. For sunflower, the operating cycle is considered 90 days.
However, it may be improved to 75 days. Further, we have planned gradual
penetration in sunflower and blended oil markets. Hopefully we will achieve sales
of 10000 MT Palm Oil and 1000 MT SFO and other oils over the period of 03 years.
Our existing business pipeline for SFO is 750MT and Palm Oil and Blended Oil 5,750
MT. Hopefully we will mature them during the first year of business fully.
PROJECTED FINANCIAL HIGHLIGHTS

The Gross margins as per PWC market report are almost 15%. We take 10.14%. For Palm
Oil it is 12% and for SFO it is 25%.
Depreciation is taken at 20 years.

LOAN REQUEST:
NON CREDIT LINE NON FUND BASED RO 3.0M
SUBLIMIT MURABAHA /IBC ADV.- 4 MONTHS: RO 1.0M
SECURITY OFFERED:
1) ASSIGNMENT OF PROCEEDS FROM EDIBLE OIL CUSTOMERS.
2) 1ST CHARGE ON RAW MATERIALS
3) PARI PASU OR 2ND CHARGE ON FIXED ASSETS
4) PERSONAL GUARANTEES AND
5) CORPORATE GUARANTEES

PRODUCTS

WAZHA COOKING & FRYING OIL 1.8LTR

ZUHUR SUNFLOWER OIL 1.8 LTR

HAWA PALM OLEIN 1.8 LTR & 17 LTR

ZUHUR SUNFLOWER OIL 750 ML & 16 LTR

 HAWA PALM OLEIN 16 LTR

ALNAKI OLIVE OIL 4LTR, 250 ML, 500ML & 750 ML

COMPANY REGISTRATION DETAILS:

COMPANY NAME: HANOON MODERN PROJECTS LLC
REGISTRATION NO.: 1202532
REGISTRATION DATE: 08-09-2014
ESTABLISHMENT DATE: 07-09-2014
PLACE: SEEB, MUSCAT GOVERNATE, SULTANATE OF OMAN