Jeddah-based Middle East Paper Company (MEPCO) has announced the start of a new phase of the containerboard paper plant project in a statement published on the Saudi Exchange (Tadawul) website.
The feasibility study for the fifth paper line (PM5), with an annual production capacity of 4,50,000 tonnes, has been completed. The final budget for the project has been approved for a total amount of approximately 1.78 billion Saudi riyals ($475 million), which includes the land value and an internal rate of return estimated at 14.5%.
Construction will start in the third-quarter this year and is expected to be completed by the fourth-quarter of 2027, with commercial production starting in the same quarter.
The project will be funded by MEPCO’s internal resources, by long-term loans from local banks, and use of funds resulting from the issuance of shares to the Public Investment Fund (PIF). In January 2024, PIF had completed its investment deal in MEPCO, acquiring a 23.08% stake by way of a capital increase and subscription to new shares.
In a separate statement to Tadawul, MEPCO announced the signing of a 36-month contract with German technology company J.M. Voith SE & Co. KG for manufacturing, supplying, and supervising the installation of the main machine for the project. The contract value exceeds 62% of the company’s total revenue, according to the latest audited annual financial statements.
