Saudi Paper CEO says market share reached 30% in Q3 2020, proposes 15% import fees

Saudi Paper Manufacturing Co. (SPM) held a market share of 30% in Q3 2020, or 8,500 tons monthly, of the local market size, which is estimated at nearly 33,000 tons per month of tissue paper rolls, chief executive officer Yousseri El Bishry told Argaam in a phone call. 

“The company is supposed to hold a market share of 40-45% in the Kingdom. However, the industry is hit by dumping and selling at lower prices, compared to the market’s manufacturing cost,” El Bishry said.

Saudi Arabia is a key market for many manufacturers from different countries. Accordingly, the Ministry of Industry is working on the anti-dumping issue to find solutions and protect domestic products, El Bishry said, adding that the best solution is to charge 15% fees on imports per ton.

Commenting on the company’s current production capacity, the top executive said it is around 92,000 tons, adding that the paper manufacturer will invest the capital increase in rebuilding the second production line and boosting its output by 28,000 tons annually -- which is equal to 30% of the current capacity with a total of 125,000 tons by the end of 2022.

The new capital will be partly invested in replacing and developing the production lines of Saudi Paper Converting Co. to boost its production capacity by 25% to 60,000 by the end of 2022.

Moreover, Al-Juthoor Paper Tissue Manufacturing Plant in Kuwait, which is 90% owned by SPM, has completed its expansions to start production within three months. The output was almost doubled from 400 to 750 tons monthly.

SPM’s financial restructuring included the rescheduling of SAR 450 million worth of long-term debts over seven years amid interest reduction, which will reflect positively on the company’s financial results, El Bishry concluded.

SPM turned to a net profit after Zakat and tax of SAR 4.1 million for the Q3 2020, against a net loss of SAR 24.2 million a year earlier, Argaam reported.