Jeddah, Saudi Arabia | 25 April 2024 “The Middle East Paper Manufacturing and Production Company (“MEPCO”), the leading company in the region paper industry, announced signing a contract with G.M. Voith SE & Co. KZ dated 22 April 2024 to manufacture and supply a fifth production line for the cardboard production project, after obtaining the approval of the Board of Directors on the feasibility study in line with market requirements. The designed production capacity of the machine is 450 thousand tons annually, and the total investment of the project is estimated at 1.78 billion Saudi riyals, including the value of the land, an expected internal rate of return of 14.5%, and a timetable of 36 months to complete the project work and begin production from the third quarter of the year 2024.
The deal aims to increase the company’s production capacity from 500 thousand tons annually to approximately one million tons annually through manufacturing and supplying a fifth production line to produce paper materials of lightweight thickness. at a speed of 1,600 meters/minute, the other party to the contract will be responsible for the manufacturing, supply, and supervision of the installation of the machine. The project will almost double the company’s sales and enhance its competitiveness by obtaining the latest technology for manufacturing cardboard paper. The machine will specialize in producing cardboard of light thicknesses, making it the largest company in the region for paper materials. The project will also contribute to preserving the environment and investing in the circular economy, as well as promoting growth in local and global markets.
This project is an important milestone towards the strategic ambitions of MEPCO, which enhances its role in pioneering the paper and tissue industry, as well as developing non-oil exports in the Kingdom of Saudi Arabia, which consolidates its contributions to achieving the Kingdom’s Vision 2030. Construction work on the new production line is scheduled to begin during the third quarter in 2024 and the start of trial operation at the end of the fourth quarter of 2027, followed by commercial production.
Chairman of the Board of Directors of MEPCO Group, Musab Sulaiman Al-Muhaidib, commented:
We are proud to announce this prominent achievement, which enhances MEPCO’s role in moving towards growth and strategic development with the ambitions of the Kingdom of Saudi Arabia and Vision 2030 in the recycling sector, with an increase of nearly half a million tons of recycled paper products.
Building a paper production line with a production capacity estimated at 450 thousand tons will not only double the company’s production capacity, but will also double its revenues, and this investment constitutes the next step in the long-term growth strategy of MEPCO Group, which began by reorganizing the operational and administrative models of its subsidiaries.
Sami Al-Safran, President of MEPCO Group, added:
The new project is a historic and pivotal event for the MEPCO Group towards leadership in paper industries, as this project will meet current and future demand by adopting the latest paper manufacturing technologies, which serves our growing market share in the diversity of our packaging and recycling paper products through new technology. This will help in producing products with smaller thicknesses per square meter in the region by promoting automation and the circular economy, increasing local content, and maintaining leadership in non-oil exports for Saudi companies.