This progress was the result of the increasing local demand on these products paralleling the increasing population and awareness about the importance of a healthy diet.GOIC Secretary General Mr. Abdulaziz Bin Hamad Al-Ageel explained that “the number of factories operating in this area increased from 24 in 2003 to 37 in 2013. Cumulative investments in this sector increased from USD 278.6 million to approximately USD 646 million for the same period of time. Likewise, this sector’s labour force jumped from 2488 workers in 2003 to 5558 workers in 2013. As a result of these developments, the design capacity increased from about 875000 tons in 2003 to approximately 1350 million tons in 2013 (54.3%).”
Edible oil industry in GCC countries is generally based on importing crude oils for refining, because oil seeds are not available locally, except for some efforts to extract sesame oils and olive presses that have been launched in the region recently after the expansion in olive cultivation, especially in Al-Jawf region in Saudi Arabia.
In this regard, GOIC’s IMI Plus data reveal that KSA was ranked first in this area in 2013. It has 20 factories with cumulative investments of USD 285 million , 44.1% of the total GCC investments in this industry. This sector in Saudi Arabia employed 2415 workers (43.5% of the total workers in GCC countries) and achieved 59.5% of the total GCC design capacity. The UAE was ranked second with 11 factories and cumulative investments worth USD 225.4 million (39%), a labour force of 2343 workers (42.2%) and 29.1% of the total GCC oils and fats design capacity.
Thus, KSA and UAE shared about 88.6% of the total vegetable and animal oils and fats design capacity in GCC countries.
Oman was ranked fourth with four factories, cumulative investments worth USD 22.8 million , 448 workers and about 9.5% of the total GCC design capacity. Kuwait has one factory producing a number of food products including oils and facts with cumulative investments of USD 107.2 million , about 263 workers and approximately 1.8% of the total GCC design capacity. Qatar also has one olive oil filling factory with USD 5.5 million worth of investments, 49 workers and a limited design capacity of 500 tons only. As to Bahrain, it had one factory that stopped working long ago.
Estimate apparent consumption in GCC countries
According to GOIC’s data, GCC countries consume large quantities of vegetable and animal oils and fats as a result of the population growth and increase in standard of living and health awareness. GCC countries’ consumption of different types of oils and fats was estimated at more than 1.2 million tons in 2013. Saudi Arabia consumes almost half of this quantity (50.8%) and then UAE (24.4%), Kuwait (approximately 10.5%), Oman (7.9%), Qatar (approximately 4%) and Bahrain (2.5%).
The status of the industry
A comprehensive overview of this industry in GCC countries shows that they rely on importing crude or semi-refined oil for refining. There are only a few olive presses mainly in Saudi Arabia, while vegetable and animal fats are mainly produced within dairy factories operating in GCC countries.
The palm olein is the most prevalent in the GCC region because of its relatively low price, and large Asian communities accustomed to it. Moreover, there is an increased consumption of other types such as sunflower, corn and olive oil. As for soybean oil, and in spite of its nutritional value, its consumption is still low because people are still not used to it.
Most vegetable oil producing companies in GCC countries, especially major corporations, attempted to adopt efficient marketing strategies. They have become widely known in the Gulf, other Arab markets and global markets as well. They continuously seek to adapt to the requirements and tastes of consumers which helps in increasing shares and boosting exports.