Naqi Water purchases 2 production lines for Riyadh factory

Naqi Water said the total contract value has been revised to SAR 42.32 million following the addition of another production line

Naqi Water Co.’s board of directors approved the signing of an addendum to a previously executed contract related to the purchase and supply of a production line for bottled drinking water in various packages and sizes.

The amendment upgrades the scope to two production lines instead of one for the establishment of its new factory in Riyadh, revising the total contract value to SAR 42.32 million (€9.58 million), the company said in a statement on Tadawul.

The amendment replaced the original plan to acquire a single production line with a capacity of 100,000 bottles per hour with two independent production lines, each with a capacity of 60,000 bottles per hour, bringing total capacity to 120,000 bottles per hour — an increase of 20% over the previously targeted capacity.

The move is expected to enhance operational flexibility, reliability, and production stability, the company stated.

The amendment represented a more suitable operational option and will help reduce operational risks and downtime associated with reliance on a single production line, supporting the new factory's readiness to meet growing demand.

Naqi explained that the increase in contract value reflects a change in project scope, namely replacing the single-line plan with two independent lines that use special packaging to reduce plastic consumption during production. This will lower production costs and increase the project’s total annual production capacity.

However, the project scope did not require any amendments to the production line or overall factory construction timelines, including civil works, technical installations, and trial operations.

Naqi said the decision is part of the company’s initiative to execute the project in an integrated manner, ensuring the highest levels of operational stability at the start of commercial operations.

The financial impact of the amended production lines is expected to begin in Q4 2026, the statement said.

The increase in production lines will not affect the ongoing construction works for the project, which are expected to be completed in line with the previously announced schedule, following the completion and equipment of the new factory in Riyadh and the start of commercial operations in accordance with the approved plan.

The contract has a related party, as the major shareholder of Middle East Factory for Machines Co. Ltd. (MEMCO) owns 50% of Naqi's capital and also holds 50% of United Seqa Group, which in turn owns 35% of Naqi.

The transaction was approved in line with the company’s approved policies and related-party procedures, in compliance with applicable laws, regulations, and market rules. The disclosure was made in line with Capital Market Authority (CMA) regulations.

According to Argaam data, Naqi signed in July 2025 a contract with MEMCO to purchase and supply a production line for bottled drinking water in various sizes for its new Riyadh factory, valued at SAR 37.7 million (€8.5 million).

The difference between the current and previous contract values amounts to approximately SAR 4.59 million (€1.04 million).