The Clap
Middle East Paper Company “MEPCO” (1202) has launched a cardboard factory project (the fifth paper line), with a budget of around SAR 1.78 billion.
Paper
One of the largest recycled paper industry companies in the Middle East and North Africa region announced that it has completed the feasibility study for the factory with a production capacity of 450,000 tons.
It has also approved the final budget for the project, expected to achieve an internal rate of return of 14.5%.
MEPCO stated that the project’s implementation period is 42 months, and construction will begin in the third quarter of this year.
So What
A new limited liability company will be established to manage the project, funded based on the company’s resources.
In addition to long-term bank loans from local banks, and proceeds from issuing shares to the Saudi sovereign fund (which owns 23.08% of MEPCO’s shares).
MEPCO expects the “financial impact of the project” to be reflected in its financial statements starting from the fourth quarter of 2027, which marks the start of commercial production.
Now What
MEPCO has signed a contract with J.M. Voith SE & Co. KG for the manufacture, supply, and supervision of the installation of the project’s main machine.
The Saudi company added that the contract value exceeds 62% of its total revenues, according to its latest audited annual financial statements.
The agreement includes purchasing a complete line for a paper production machine with a production capacity of 450,000 tons per year, and a speed of 1600 meters/minute.
The other party to the contract will be responsible for manufacturing, supplying, and supervising the installation of the machine.
Its financial impact is expected to be reflected starting in the fourth quarter of 2027.
