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Logo of Saudi Paper
Saudi Paper Manufacturing Co. signed, on May 11, 2021, an agreement worth SAR 58 million with Italy-based Toscotec to manufacture and supply a tissue paper rolls production line, the company said in a bourse statement.
The production line will have a design production capacity of 30,000 tons per year, the statement added.
The deal aims to increase the company's production capacity of tissue paper rolls from 100,000 tons to 130,000 tons per year. It will be financed through the company’s capital increase, which was completed on Jan. 6, 2021, as well as part from the working capital.
According to the statement, advance payment will be paid within five working days from the date of signing the contract against a bank guarantee from the supplier, while the remaining amount will be paid in installments that correspond to the delivery, installation, operation, and final receipt with the company obtaining a performance guarantee from the supplier as per the terms of the contract.
The relevant financial impact will be reflected on the plant and equipment as well as the obligations in the value of contract payments and in conjunction with their payment, as of the second quarter of 2021.
The production is expected to start during the fourth quarter of 2022, the statement said.
The agreement aims to provide the latest technologies and solutions for major tissue paper producers around the world. It also targets to achieve maximum production efficiency, reduce consumption, operating costs and final products with the highest quality and respect for the environment.
In January 2021, the Tadawul-listed firm increased its capital from SAR 92 million to SAR 192 million through offering rights issue shares worth SAR 100 million. The proceeds will be used to purchase raw materials, mainly tree pulp, to feed the company's production lines; rebuild assets to improve production quality; purchase equipment to boost production; and repay part of the bank loans, according to data compiled by Argaam.
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