MEPCO subsidiary expands production with new tissue line contract

SAUDI ARABIA – Middle East Paper Co. (MEPCO)’s subsidiary, Juthur Paper Manufacturing Co., has signed a significant contract with Andritz AG to manufacture, supply, and install a sixth tissue production line (TM6).

The contract, announced on November 10, marks a strategic step in expanding the company’s production capabilities.

The agreement, valued at no more than 25% of MEPCO’s 2023 total revenue of SAR 866.75 million (US$230.76m), represents an investment of approximately SAR 216.7 million (US$57.69m).

Spanning 24 months, the project will deliver a complete tissue production line with an annual capacity of 60,000 tonnes and a speed of 2,100 meters per minute.

The financial impact of this contract will start to be reflected in the fourth quarter of 2026.

This expansion aligns with MEPCO’s long-term growth strategy. In August, the company’s board approved the SAR 345 million (US$91.85m) TM6 project to double Juthur Paper Manufacturing Co.’s production capacity at its King Abdullah Economic City (KAEC) facility.

Once operational, the new line will boost the plant’s total capacity to 120,000 tonnes annually, addressing growing demand in both local and international markets.

The initiative supports Saudi Arabia’s Vision 2030 goals by contributing to economic growth and industrial diversification.

Financing for the project will come from government financial institutions, bank loans, and proceeds from the Public Investment Fund’s (PIF) recent investment in MEPCO.

Rob Jan Renders, Acting President of MEPCO Group, emphasized the company’s dedication to innovation and regional leadership, “By investing in state-of-the-art tissue production technology and expanding our manufacturing footprint in Saudi Arabia, we are not only increasing our production capacity but also reaffirming our commitment to meeting the evolving needs of our customers both domestically and regionally.”

MEPCO’s recent financial performance reflects a challenging environment. In the first half of 2024, the company reported a 48.93% year-on-year decrease in net losses, falling to SAR 15.24 million (US$4.06m) from SAR 29.86 million (US$7.95m).

The TM6 project, however, is expected to drive long-term growth and improve the company’s financial outlook once commercial operations begin in late 2026. 

This expansion positions MEPCO as a key player in the tissue paper market while supporting Saudi Arabia’s economic transformation initiatives.

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