Saudi Printing and Packaging to shut UAE unit as it sharpens focus on core growth markets

UAE – Saudi Printing and Packaging Co (SPPC) has approved the closure of its fully owned UAE subsidiary, Al Madinah Packaging Co (City Pack), as part of a broader strategy to exit non-core assets and refocus capital on higher-growth, value-added packaging segments.

The decision was approved by the company’s board and disclosed in a statement to Tadawul, Saudi Arabia’s stock exchange.

SPPC said discontinuing City Pack’s operations will allow the group to reallocate resources toward priority markets and businesses that better align with its long-term strategic objectives.

City Pack operates under Emirates National Factory for Plastic Industries and has a paid-up capital of Dh10 million (US$2.7 million).

SPPC noted that the shutdown is expected to support its ongoing debt restructuring and liquidity management efforts by stemming losses from underperforming operations, while improving the group’s overall financial health.

“The decision is driven by our commitment to sustainable value creation for shareholders and enhancing the group’s operational performance,” the company said, adding that it will assess and disclose any material financial or operational impacts arising from the closure as they become clear.

The move follows SPPC’s announcement in August 2025 of a new strategic direction centred on operational efficiency, organizational restructuring, and targeted expansion in core markets, particularly Saudi Arabia and the wider Gulf region.

The strategy is built on five pillars: improving packaging product efficiency, divesting from non-essential sectors, accelerating growth in selected markets, streamlining the group’s organizational structure, and completing a comprehensive debt-restructuring program to lower financing costs.

Industry analysts view the exit from the UAE subsidiary as consistent with a wider trend among regional packaging and printing companies, which are rationalizing portfolios amid rising input costs, margin pressure, and uneven demand across markets.

Many players are prioritizing scalable, higher-margin packaging solutions, particularly those linked to food, pharmaceuticals, and sustainable materials, over legacy or underperforming assets.

SPPC’s financial performance over the past year has underscored the urgency of its restructuring efforts.

 In the first half of FY24, the company reported a 10.29% year-on-year decline in revenue to SAR 361.35 million (US$96.28 million), down from SAR 402.82 million (US$107.32 million) in the same period of 2023.

Net losses widened sharply, rising 164.5% year-on-year to SAR 93.74 million (US$24.98 million), while loss per share increased to SAR 1.56 from SAR 0.59.

To shore up its balance sheet, SPPC last year secured a SR75 million (US$19.9 million) financing facility from major shareholder Saudi Research and Media Group, with maturity set for December 2028.

Looking ahead, SPPC said it remains focused on executing its restructuring roadmap, strengthening liquidity, and positioning the business for recovery and sustainable growth in its core packaging markets across Saudi Arabia and the Gulf.

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