MEPCO CEO: Improved prices, expanded sales channels boosted earnings

Faisal Haddawi, CEO of Middle East Paper Co. (MEPCO)

Middle East Paper Co.’s (MEPCO) earnings in the second quarter of 2025 were driven by an improved sales mix, higher average prices, increased demand, and a focus on globally valued products. This is in addition to expanding sales channels in the local market, CEO Faisal Haddawi said.

In an interview with Al Arabiya, he added that profits mainly came from operational activities, despite recording other operating income of SAR 5.4 million, which included government support under the Competitiveness Program by the Ministry of Industry to stimulate increased production capacity.

The impact of this support on profit was limited, and the positive results reflect a genuine improvement in operational efficiency and cost control, he confirmed.

The CEO further indicated that the company recorded growth despite a 13% increase in costs, thanks to reductions in administrative expenses, minimizing waste, and greater reliance on local suppliers to strengthen supply chains.

Regarding future projects, Haddawi emphasized that the Public Investment Fund’s (PIF) entry as a strategic shareholder plays a major role in achieving several strategies, including the growth strategy, through which the company launched two major projects.

He further explained that the first project, PIM-5, aims to double paper production capacity from 450,000 tons to 900,000 tons annually by the end of 2027, with an investment of SAR 1.78 billion.

The second targets expanding tissue production at the Juthor Plant to increase the production capacity from 60,000 tons to 120,000 tons annually, expected to be operational by the end of 2026, with an investment of SAR 365 million, the exec. said.

Moreover, Haddawi noted that these projects contributed to more than a 450% increase in the company’s project backlog, adding that MEPCO is preparing for an institutional transformation to strengthen its position in the circular economy and increase local content to achieve sustainable growth in line with Saudi Vision 2030.

According to Argaam data, MEPCO reported profits of SAR 10.5 million in H1 2025, against losses of SAR 14.3 million in the same period of 2024. Second-quarter profits reached SAR 5.2 million, representing a 29% increase year-on-year (YoY).