SPPC exits UAE plastic packaging operations to focus on core printing business

SAUDI ARABIA – Saudi Printing and Packaging Company has announced the sale of polypropylene cup and plastic container production lines operated by the Commercial United Packaging Company in the UAE for SAR 1.12 million (US$298,600).

In a statement issued on Sunday, the company said the production lines had a book value of SAR 6.1 million (US$1.63 million) as of 30 September 2026. 

The gap between book value and sale price accounts for the anticipated loss, which will be recognised in the financial statements for the period in which the transaction is completed.

Non-cash losses of this type reflect asset impairment rather than direct cash outflow, though they reduce reported earnings and book equity.

Divestment Supports Focus on Core Products

The company explained that the transaction forms part of the second pillar of its announced strategy, involving evaluation of options for divesting non-strategic assets and projects. 

The divestment aims to focus operational efforts and resources on core products and sectors offering rapid growth and high added value in the group’s target markets. 

It cited increasing regulatory pressure on single-use plastic products across the region alongside their low profit margins as factors influencing the decision. 

By exiting operations where returns are constrained by both regulation and commoditised pricing, SPPC seeks to redirect management attention and capital toward segments where it can differentiate on quality, service or specialised formats.

Debt Restructuring and Liquidity Improvement Targeted

The transaction also supports the fifth pillar of the strategy, which focuses on debt restructuring and improving liquidity. 

By stemming financing outflows associated with low-profitability operations, the divestment is expected to reduce financial burdens, strengthen the company’s financial position and deliver sustainable value to shareholders. 

Exiting capital-intensive plastic moulding lines allows the company to redirect resources toward segments with stronger returns.

Regional Plastics Sector Faces Policy Pressure

The sale reflects broader pressure on single-use plastic manufacturing across the Gulf, where governments have introduced restrictions on disposable plastics and extended producer responsibility requirements. 

Polypropylene cups and plastic containers face particular scrutiny as food service operators transition toward alternatives, compressing margins for producers that lack scale or differentiated capability. 

For SPPC, exiting these operations reduces exposure to regulatory change while concentrating capital on printing and packaging segments where the company holds stronger competitive positioning.

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