Sami Al-Safran, CEO of Middle East Paper Co.
Sami Al-Safran, CEO of Middle East Paper Co. (MEPCO), said that demand levels for the company’s products are normal inside and outside the Kingdom.
MEPCO’s local sales averaged 60%, while export sales reached around 40%, Al-Safran told Argaam.
The company posted lower profit on the decline in global paper prices amid the current economic and political conditions, which affected supply and demand, he added, expecting prices to go higher.
The financial impact of halting Jeddah plant operations led to a 7% decline in the fourth quarter of 2022 sales, while production decreased by 2% on heavy rain, compared to Q4 2021. MEPCO resumed operations at the plant with full capacity in less than seven days and restarted the largest machine in terms of productivity in less than two days.
Direct production costs dropped 14.29% year-on-year (YoY) in Q4 2022, while indirect costs went up due to increased business and operation needs, including shipping, transport and workforce charges.
MEPCO’s revenues rose 12.3% YoY to SAR 1.18 billion in 2022. Production costs grew by 3% YoY, Al-Safran indicated, noting that the company started to add final touches to the fifth cardboard production line, which will double its capacity.
He expected MEPCO to maintain its operating policy, as well as the development and expansion strategy in the first quarter of 2023.
Al-Safran also expected Juthor plant to launch operations in a few weeks. It will operate in jumbo tissue paper rolls to produce facial, pocket and kitchen tissue.
The Kingdom needs almost 250,000 tons of tissue, of which 100,000 tons are produced locally. MEPCO aims to meet local demand for jumbo tissue rolls to fulfill the S
audi market needs.
Juthor’s production stood at 60,000 tons. MEPCO aims to start pilot operations in the second quarter of 2023 ahead of commercial operations, he concluded.
The paper manufacturer reported net profit of SAR 271 million in 2022, up 23% from SAR 221 million a year earlier, Argaam earlier reported.
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