Yousseri Elbishry, CEO of Saudi Paper Manufacturing Co.
Saudi Paper Manufacturing Co. (SPM) saw a “significant” jump in Q2 2023 sales of 38.2%, thanks to stronger sales of paper rolls and transformational products, which led to “a notable rise” in gross profit and operating profit by 56% and 347%, respectively, after operating the new paper rolls production line in April 2023, said CEO Yousseri Elbishry.
In an interview with Argaam, Elbishry said that the company’s production capacity increased by 31% following the operation of the new production line.
He pointed to a slight hike in fixed production costs, despite a surge in financing costs in the current quarter due to the high cost of financing locally and globally. He also noted that SPM recorded SAR 19 million capital gains in Q2 2022 from selling an owned land plot.
As for SPM's Q3 2023 performance, Elbishry said the company expects a modest increase in prices after a pause in operations at some tree pulp factories for periodic maintenance in the coming period. This is in addition to demand for tree pulp from East Asia, which is considered a major driver for market prices. He noted that the company's performance is on the rise since early 2020.
Moreover, prices of pulp and raw materials witnessed stability since the beginning of this year, said the CEO, indicating that SPM is continuously monitoring the market prices of raw materials to take the necessary decisions regarding purchasing stocks at competitive prices.
According to the top executive, the company managed to build strategic stockpiles at competitive prices, which contributes to maintaining high and stable profit margins.
He further indicated that export sales represent a minor share of 5-10% of total sales, given the size of the internal market and the company's focus on meeting the local market's needs, to be followed by external expansion.
The CEO also highlighted that demand for the company's products is on the rise, amid continued efforts to improve the quality of products and meet the market needs.
He revealed that the production capacity of the raw tissue paper rolls plant reached 130,000 annually in the second quarter of this year.
As for the developments in establishing and opening a branch to be owned by a subsidiary in Dubai, Elbishry said that SPM received several requests for its products, stressing that this decision was met with promising results after studying the needs of target customers.
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