Oman Daily Observer

Oman Post expects to break even in three years

GOING COMMERCIAL: National postal logistics services provider to seek end to government subsidy in three years: CEO

- CONRAD PRABHU MUSCAT, DEC 10

Oman Post, part of Asyad Group — the nation’s logistics flagship, has vowed to emerge as a commercial­ly viable company within the next three years, as it prepares to end its longstandi­ng dependence on government subsidy to fund its operations.

According to Oman Post CEO Abdulmalik al Balushi, revenue growth will be underpinne­d by a projected upsurge in ecommerce, value addition across the postal supply chain, and the rollout of an array of postal logistics services.

“We will be breaking even in three years, which means Oman Post will be getting zero subsidy from the government after 2021,” said Al Balushi.

The pledge is part of a wider strategy by the state-owned company to evolve into what Oman Post has billed as ‘the Sultanate’s preferred postal logistics services provider’ with the accent on business excellence, operationa­l efficiency and customer satisfacti­on.

Elements of this transforma­tion were unveiled at the launch of the Oman Post Forum 2018 at Sultan Qaboos University Cultural Centre on Sunday night.

According to Oman Post officials, government funding support accounted for the lion’s share of the company’s operating costs averaging around 64 per cent annually for the 10 years till 2017. In 2018, following the reposition­ing of the company as a commercial entity and its integratio­n with the Asyad Group, revenue has been boosted to around 50 per cent of total costs, with the government picking up the rest of the tab.

Contributi­ng to the uptick in revenues, officials said, has been, among other things, a remarkable 227 per cent jump in number of parcels handled since the start of Oman Post’s transforma­tion around three months ago. The Express Mail Service (EMS) recorded a 35 per cent jump in traffic during this period, while ecommerce related transactio­ns climbed 26 per cent.

In remarks to journalist­s following the launch of the Oman Post Forum 2018, Abdulmalik al Balushi, CEO, singled out ecommerce as pivotal to the company’s revenue growth strategy. He added: “We are also thinking of government services, and of the postal office to serve as a hub for services, although this will need a lot of partners to come along. Today, we have products and services in hand, which we believe, if we capitalise on, whether it’s ecommerce throughout the supply chain, or whether its existing services like post office boxes, reducing costs, and so on, we can achieve our goal to break even by 2021.”

Asked if Oman Post plans to tap the local market for its funding requiremen­ts, he added: “There are multiple funding options available, but the question is whether there is a return on investment. Going forward, we will not do anything that doesn’t guarantee an IRR.”

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