An oasis for milling

by Stormy Wylie
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The desert climate and lack of rainfall in countries along the Arabian Gulf makes it an inhospitable place for growing grain and many other food crops. Yet, in the past 30 years the Gulf region – in particular, the five countries that make up the Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates – has become an oasis for food manufacturing.

The United Arab Emirates has been at the forefront of this food processing revolution, which began in the early 1980s as governments in the Gulf region sought to lessen their dependence on oil and gas production and meet the nutritional needs of an increasingly higher paid and more health-savvy population. Nearly 40% of the region's food processing plants are in the U.A.E., including wheat milling, pasta, snack food and biscuits and cookie production in addition to vegetable oil and sugar refining and meat, dairy, seafood, fruits and vegetable processing.

Five of the region's eight flour mills also are in the U.A.E. These five mills have a total annual milling capacity of 1.2 million tonnes, and the four largest mills process about 90% of the flour produced. A little more than 60% of the flour is exported to Asia and Africa, according to an agricultural specialist with the U.S. Department of Agriculture's Foreign Agricultural Service field office in Dubai.

National Flour Mills Co., L.L.C., based in Dubai, built the first flour mill in the U.A.E. and operates two of the country's five mills.

National Flour Mills belongs to the Abdulla Al-Ghurair Group, which also operates Gulf Import & Export Co., a grain trading business; Gulf Grain Elevators, grain storage; Gulf Feed Mill, animal feed production; and Gulf Legumes Co., a legumes and pulses plant. The group also owns shares in National Flour Mills in Lebanon and in Reem Rice Mills in Pakistan. Outside of its grain-related activities, the Abdullah Al-Ghurair Group also operates a cement plant, insurance company, shopping center and banks.

Abdulla Al-Ghurair, the group's 71-year-old chairman, invested in a wide variety of businesses after the United Arab Emirates was formed in 1971. A native of Dubai, Mr. Al-Ghurair was involved in the pearl diving industry and other trading activities with neighboring countries.

Dubai is one of the seven emirates, or states, that joined to form the U.A.E., along with Abu Dhabi, Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm al Qaywayn.

The U.A.E. today has an open economy with one of the world's highest per capita incomes and a sizable annual trade surplus. The country's wealth is based on oil and gas production, which accounts for about 33% of Gross Domestic Product.

The U.A.E. is located in one of the world's most arid regions, but it is anything but barren. Considerable revenues have been devoted to forestation, public landscaping and parks. Trees and shrubs are distributed free to schools, government offices and residents.

Although agriculture contributes less than 3% of the GDP, the U.A.E. is over 90% self-sufficient in dairy products, poultry, vegetables, fruits and animal feed. Still, about 80% to 90% percent of all food products are imported.

The country's agriculture sector has improved in recent years, spurred by government loans and incentives, new farming and irrigation techniques and increased private investment. Today, total cultivable land in the U.A.E. is around 70,000 hectares, most of which is used for date palms.

A negligible amount of grain is grown in the U.A.E., and as a result the country is a net importer of all types of grains. Wheat imports total about 1 million tonnes annually, while annual maize and barley imports, used in feed production, are estimated at 200,000 tonnes each and soybean meal imports are close to 60,000 tonnes.

MILLING'S POTENTIAL. Before National Flour Mills built its first mill in the U.A.E., all flour was imported, primarily from Pakistan, India or Australia.

Essa Abdulla Al-Ghurair, the son of Abdulla Al-Ghurair and general manager and chief executive officer of the flour milling company, said the company recognized the potential of the grain and grain processing industry.

"In spite of the tremendous agricultural potential that exists in the Middle East, most countries in the region continue to remain underutilized as far as food production is concerned and rely on imports to meet the growing needs of the market," he said. "Billions of dollars are spent each year for import of grains and foodstuffs."

A report by the Arab Fund for Social and Economic Development shows the Arab population — which constitutes about 4% of the world population — imports 13% of the world's foodstuffs and 20% of the world's cereals.

"While most governments in the region are striving for self sufficiency, we strongly believe that the region will continue to remain a major importer of food grains in the years to come, particularly because of the increase in both per capita income and growth rate of population," Mr. Al-Ghurair added. "We have successfully been involved in the trading of commodities for decades. Over the years, we have established contacts around the world and pooled our expertise and resources to help meet the growing needs of the region."

National Flour Mills started small, opening a 100-tonne-per-day mill in 1976 in the heart of the city of Dubai, near Port Rashid. Capacity was increased to 300 tonnes in 1979 and to 600 tonnes in 1986. In 1997, the parent company built another milling complex at Jebel Ali, a large man-made port in a free trade zone about 45 kilometers southwest of Dubai.

This new U.S.$40-million complex includes a 1,300-tonne-per-day flour mill and a 225-tonne durum mill, as well as a pre-mix plant; a 20-tph feed mill that produces feed for poultry, cattle, sheep, camels, horses and pet birds; and a 10-tph pulses and legumes plant. A 300-tonne maize mill and 400-tonne edible oil refinery are under construction and scheduled to be completed this year. The cost of the new maize mill and edible oil refinery is estimated at U.S.$5 million and U.S.$11 million, respectively.

The flour mill at Jebel Ali is fully automated. Each of the mills' two lines is equipped with 14 double-high roller mills manufactured by Buhler Ltd., Uzwil, Switzerland.

Because of the high humidity in the region and temperatures that can reach up to 45°C (120°F) in the summer, the Jebel Ali mill was built without windows in order to control condensation and mold. The simple design makes the mill "easy to fumigate," according to Irfan Hashmi, technical manager.

A U.S.$1-million Center for Technical Services at Jebel Ali has a staff of 13 food specialists who provide protein, fat, fiber and ash analyses; physical analyses of moisture, gluten, Falling Number and color; and rheological and toxic analyses for the company's flour and feed mills as well as for clients. The technical center also conducts milling tests and test baking, as well as pre-mix formulations for bakeries and research and development of new formulations and products.

Gulf Grain Elevators, the grain storage and transhipment facility at Jebel Ali, is being expanded from its present capacity of 120,000 tonnes to 300,000 tonnes, which will make it the largest in the Middle East, according to the company. The expansion is expected to be completed this year.

The grain terminal, designed by MacDonald Wagner & Priddle, an Australian consulting firm for grain handling projects, occupies more than 28 hectares at Jebel Ali. A quay frontage of 500 meters accommodates Panamax-size ships from 60,000 dwt to 120,000 dwt.

Grain is discharged using two rail-mounted Hartman mechanical unload-ers, each with 1,000 tonnes per hour nominal capacity, and a 350-tph Buhler pneumatic unloader, which is operated by remote control.

A 1,200-tph belt conveying system loads and discharges cargo from the storage silos. Each line is equipped with an electronic weigher in the elevator tower and samplers. Invoicing, stock and process control as well as maintenance is fully computerized. Sampling conforms to U.S. Department of Agriculture recommendations for international bulk trade.

STRATEGIC LOCATION. The United Arab Emirates is located strategically along the southern approaches to the Strait of Hormuz in the Arabian Gulf, between Saudi Arabia and Oman, making it a vital transit point not only for crude oil but also for commodities such as grain.

Wheat for National Flour Mills' plants at Dubai and Jebel Ali is imported from Australia, Canada and the United States, with some "filling" wheat from Argentina, Turkey and Romania. The mills turn out a variety of flours, including Arabic bread flour, chapati flour and tandoori bread flour as well as pan bread, all-purpose, wholemeal, cake, cookie and noodle flours, durum semolina and durum flour, ready mixes and pearled wheat and barley.

Polished wheat (haris) and cut wheat (jareesh) from the flour mills are packed in the pulses and legumes plant for home use. Bran and tail-end flour is used in the feed mill. Corn flour from the maize mill will be used in the pre-mix plant for cake flour and mixes.

National Flour Mills was the first in the Arabian Gulf region to be HAACP-certified, a quality control certification program, and also received ISO 9002 and ISO 14000 certification for administrative and environmental purposes. "We build quality consciousness into our way of work," according to Essa Al-Ghurair. "In fact, it is our way of life. This is reflected in our quality policy statement, which, in turn, is our guiding spirit."

About 70% of the flour produced by National Flour Mills is exported to other countries in the Middle East and to Asia, Africa and the Commonwealth of Independent States. But there is a thriving local market, made up of about 400 bakeries.

There are several large industrial bakeries and many in-store shops, but the vast majority are small, traditional bakeries. These small bakeries use up to 200 kilograms of flour per day and produce only two types of bread for local consumers: Arabic or pita bread and tandoori, a single layered flat bread baked in a shell oven. Tandoori is most popular in Pakistan, Iran and India.

Only about 5% of the flour produced at National Flour Mills is transported in bulk. The rest is bagged in polypropylene bags of 10, 25 and 50 kilograms for industrial use and in 2 and 5 kilogram paper bags for retail.

Because few bakeries in the U.A.E. are equipped with silos for flour storage, National Flour Mills is helping with financing for new flour storage silos. Reducing bag usage is part of the company's environmental activism. Retail flour is packaged in "eco"-friendly paper and marked with an eco-friendly logo.

The United Arab Emirates is a melting pot of nationalities and cultures. Only about 15% of its 2.8 million population are native Emiratians. About 70% of its residents are from India or Pakistan and the rest are expatriates from the West or East Asia who came to the U.A.E. to work in the oil and gas or service industries. Per capita consumption of wheat-based products in the United Arab Emirates is high – about 250 kilograms per year.

Consumers in the United Arab Emirates and other parts of the Middle East are becoming increasingly health conscious, according to Dr. Hashmi. Pasta, reduced-fat products and high-fiber breads are popular with consumers. Still, bread is the center around which the Emiratian diet is based, he said. Bread is eaten with the main course, to be dipped in gravies, or used to hold meats and vegetables.