Saudi Paper Manufacturing Company (SPMC) announced the signing of an agreement with the Italian company Toscotec to supply a raw tissue paper rolls production line for its Dammam 2nd Industrial City factory at a cost of 166 million riyals ($44.17 million).
SPMC said in a statement that the agreement includes the manufacture, supply, installation, and operation of a production line for raw tissue paper rolls, with a production capacity of 60,000 tons per annum, thereby increasing SPMC’s annual production capacity from 1,30,000 tons to 1,90,000 tons to meet the local and export market requirements. Production on the new line is likely to start during the third quarter of 2024.
It was stated that an advance payment will be made within a maximum period of two months from the date of signing of the contract, and the rest will be paid in installments consistent with delivery, installation, receipt, and final operation, extending from the date of signing for a period of 16 months, with the company obtaining a performance guarantee from the supplier according to the terms of the contract.
The Dammam-based tissue-paper manufacturer also said that the deal will be financed through the company’s operating revenue, sale of certain non-operating assets, proceeds of legal claims, and the rest through banks and local financial institutions.
The company explained that the latest deal relating to the supply of a new machine as a fifth production line is part of the earlier agreement valued at 300 million riyals (around $80 million).