FIPCO’s board recommends capital increase via SAR 115 mln rights issue

Logo of Filling and Packing Materials Manufacturing Co.

Filling and Packing Materials Manufacturing Co.’s (FIPCO) board of directors recommended, during a meeting held on Feb. 21, increasing the company’s capital through rights issue to SAR 115 million.

In a statement to Tadawul, FIPCO said the capital increase aims to enable the company and its subsidiary to keep pace with the 4G technologies for industries, which is one of the objectives of the Vision 2030 for industrial transformation programs aimed at raising the efficiency of Saudi factories.

FIPCO’s strategy aims to upgrade production lines to increase efficiency and achieve higher quality standards, leading to higher market share and export sales.

It also includes adding new products to ensure added-value to FIPCO’s diversity; digitalizing production lines to enhance efficiency through implementing the 4G technologies for industries; and investing in sustainability initiatives, especially those that relate to renewable energy.

Other targets include raising the financial solvency to support sales expansion, specifically export sales; reducing borrowing; minimizing banking charges; and providing sufficient working capital to meet the company's expansion activities.

The shareholders on the date of the extraordinary general assembly meeting (EGM), during which the capital increase through right issues is approved, are eligible, along with those registered at the Securities Depository Center (Edaa) at the end of the second trading day following the EGM.

The statement also noted that FIPCO was selected to join the National Industrial Development and Logistics Program (NIDLP).

The annual salary expenses and energy cost in FIPCO amount to approximately 25% of the company’s annual revenues, according to the latest audited annual financial statements.

FIPCO aims to reduce this by adopting the above-mentioned initiatives, as the most important challenges that FIPCO currently faces is the high employment numbers, exceeding 1,000 employees, based on the nature of operations. The annual salary reaches SAR 38 million, in addition to the cost of electricity that amounts to SAR 7 million annually.

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