Tasnee CEO says shipping, distribution costs skyrocket by over 200%

Fawaz Al Fawaz, CEO of National Industrialization Co. (Tasnee)

Fawaz Al Fawaz, CEO of National Industrialization Co. (Tasnee), said that shipping and distribution costs skyrocketed by more than 200% during the previous period, amid supply chain disruptions.

Speaking to CNBC Arabia, he noted that shipping costs rose from around $50 to more than $250 in some destinations.

Tasnee, per Al Fawaz, underwent scheduled periodic maintenance at the end of Q1 2026 and at the beginning of Q2, coinciding with the regional geopolitical tensions and supply chain disruptions.

These circumstances played a significant role in the company's latest financial results, paired with increases in certain prices and production inputs, said the top executive.

He stressed that the liquid materials segment was affected by shipping costs by more than 60% during the past period.

Al Fawaz added that Tasnee is working to restore all plants to their production levels within two months.

Moreover, the company’s cash flows were also hit. Tasnee is currently working to restructure some of its existing loans. It has SAR 5.3 billion in total debt, including SAR 1.1 billion in financing from the Saudi Industrial Development Fund (SIDF) and SAR 4.9 billion from commercial banks.

Meanwhile, total consolidated loans of the company and its subsidiaries amounted to SAR 8.1 billion, including SAR 1.7 billion from SIDF and SAR 6.3 billion from commercial banks. The loans remain at reasonable levels, according to Al Fawaz.

He pointed out that the domestic market accounts for approximately 13% to 15% of the company's products.

According to Argaam’s data, Tasnee turned to a net loss of SAR 889.1 million in H1 2026, versus a net profit of SAR 830 million recorded during the same period in 2025. The Q2 losses reached SAR 547.8 million.