RIYADH: Jeddah-based Middle East Paper Co. is operating its plants at rates exceeding 92 percent despite declining commodities demand, according to its CEO Sami Safran.
Although markets are witnessing weaker demand for commodities, including paper products, regulations of the domestic market were the reason the firm did not see a significant impact in 2022’s third quarter results, Safran told said on a call with Saudi financial news portal Argaam.
He added that MEPCO, on average, exported 40 percent of its output, boosting its growth plans, and although shipping costs rose in the first half of the year, they slightly declined in the third and fourth quarters.
Safran noted that the company faces global market-driven challenges, but its exports and local sales are constant.
The paper manufacturer has also been maneuvering its euro-dominated funds obtained to finance its tissue paper factory in a volatile foreign exchange market.
The tissue factory is expected to launch in the first half of 2023 as part of the Kingdom’s National Industry Strategy, as it supports local content deployment.
The project will likely reflect positively on the company, Safran noted.
The paper manufacturer has reported net earnings valued at SR245 million ($65 million) for the first nine months of 2022, which amounts to an annual increase of 95 percent, according to Argaam.
Last week, MEPCO invited its shareholders to vote on increasing its capital to SR666 million to support the company’s financial position and growth plans.
According to a bourse filing, the Saudi-listed paper manufacturer’s board proposed a 33 percent capital hike from the current capital of SR500 million.
The filing said the transaction would be conducted by granting shareholders one bonus share for every three shares held.
