Edible oil investments more than double to $646m since 2003

By Eliot Beer

- Last updated on GMT

Vegetable oils account for 80% of edible oils consumed in the GCC, and most refining is done in the region
Vegetable oils account for 80% of edible oils consumed in the GCC, and most refining is done in the region

Related tags: Petroleum, United arab emirates

The GCC’s edible oils industry saw total investment more than double to US$646m in the last decade, according to a report from the Gulf Organisation for Industrial Consulting (GOIC).

Cumulative investment in the sector has seen its workforce double, and the number of factories and total capacity increase by half. The GOIC report said the increase was due to both increases in GCC populations and growing affluence in the region, with the region consuming 1.2 million tonnes of vegetable, animal and marine oil in total in 2013.

Labour and capacity growth

The number of factories operating in this area increased from 24 in 2003 to 37 in 2013. Cumulative investments in this sector increased from US$278.6m to approximately US$646m for the same period of time​,” said Abdulaziz Bin Hamad Al-Ageel, secretery-general of GOIC.

Likewise, this sector’s labour force jumped from 2,488 workers in 2003 to 5,558 workers in 2013. As a result of these developments, the design capacity increased from about 875,000 tons in 2003 to approximately [1.35 billion] tons in 2013, [an increase of 54.3%]​,” he added.

Due to the Gulf’s lack of agricultural capacity, almost all its oil is imported in the form of unrefined oils, with refining largely done within the region. The exceptions were a limited amount of domestic olive oil production in Saudi Arabia, and some production of animal fat products from dairy producers in the GCC.

KSA and UAE dominate

Saudi Arabia holds the largest share of the GCC’s oil refining capacity, with 59.5%, while the UAE is second with 29.1%, with the pair together controlling 88.6% of the region’s capacity. Oman was third with 9.5%, with Kuwait at 1.8% with one factory, and Qatar barely registering with only 500 tons of production capacity thanks to a single olive oil factory.

Edible oil consumption was more evenly distributed relative to population, with Saudi Arabia taking almost 617,000 tons, or 50.8%, the UAE 24.4%, and Kuwait 10.5%. Oman consumed 7.9%, Qatar took 4%, and Bahrain 2.5%, or 30,000 tons of oils.

Vegetable oils made up the vast majority of GCC consumption, at 80% of all oil used. Animal oil made up 19%, with the final 1% from marine oil.

Various oils and fats are key to GCC economies for they are part of the food security and a significant part of the diet. They are basic nutrients highly demanded in several sectors and they complement other food industries in GCC countries such as the production of feed, poultry meat, proteins and concentrates etc​,” said Al-Ageel.

This industry is also directly and indirectly linked with a number of economic sectors like manufacturing industry, soap industry, pharmaceuticals, plastic industry and chemical industry​,” he added.

Related topics: Middle East

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