Obeikan Glass eyes new solar panel line, boasts solid financial position: CEO

Obeikan Glass Co. CEO Fayez Abdulrazzag

Obeikan Glass Co. is working on its future plans for conducting technical, marketing and financial studies for a bundle of projects, the most important of which is building a new production line at its site in Yanbu Industrial City, CEO Fayez Abdulrazzag told Argaam.

The new line will be dedicated to the production of highly-transparent glass used in solar panels.

He said that Obeikan Glass will expand and add investments to new production lines that support the expansion of manufacturing industries in the glass industry field, thanks to its available expertise, strong financial position and 2021 financials.

In addition, the company’s robust earnings are expected to extend through the current year, which will, in turn, support expansion into the glass industry.

Obeikan Glass’ largest glass manufacturing facility of its kind in the Middle East aims to be one of the supporting national firms in achieving the National Renewable Energy Program’s (NREP) objectives in line with the Kingdom's Vision 2030 in order to reach the production of solar energy by 2030, with an estimated capacity of 40 gigawatts (GW).

Here’s the full interview with Abdulrazzag, who digs deep into the company's business plan and strategy:

Q: Profits of Obeikan Glass soared 904% year-over-year (YoY) in 2021, what do you think of these results?

A: In 2020, the company worked on a board-approved plan to mitigate the pandemic-induced impacts on the company’s business and activities. We were thankfully able to overcome these external shocks and achieve positive results in 2020, despite the repercussions that affected the majority of businesses.

In 2021, our expectations indicated that Obeikan Glass is on the right path to achieving record results compared to previous years, based on the market study and the company’s experience.

This was mainly due to the improvement in domestic and global demand to almost pre-pandemic levels, with the easing of restrictions and lockdown measures to combat COVID-19.

That is in addition to a persistent gap between supply and demand as a result of the closure of some production lines during the previous year for maintenance and the permanent shutdown of other lines.

Also, prices continued to rise to unprecedented levels on low supply, which consequently led to the achievement of high and remunerative profit margins.

Q: You mentioned that one of the reasons for the company’s profit growth is expansion into new markets, can you name them?

A: Obeikan Glass expanded into Central and South America, as well as setting foot in Europe and West Africa. This is in addition to the company's sustainable markets.

Q: What is the value of export contracts to your clients in foreign markets in Q1 2022?

A: The company's strategy is based on giving priority to meeting local demand and then exporting the surplus to global markets.

Thus, Obeikan Glass reduced its exports to satisfy the growing domestic demand, which rose 26% YoY in Q1 2022.

Q: What are your expectations for both demand and product prices in H1 2022?

A: At the global level, demand is still healthy, and further improvement is expected for most economic activities following the return to doing business as usual.

At the local level, demand improved as a result of the resumption of work on projects that were suspended during the pandemic or new ones launched by the public and private sectors.

Prices are expected to remain at the same levels realized in Q4 2021.

Q: Are there plans to boost production capacity or add new products in the coming period?

A: Obeikan Glass always seeks to improve its sales by adding new production lines for products similar to the existing ones, new varieties of glass or other value-added products.

This will contribute to raising profit margins on an ongoing basis to maximize shareholders’ equity and the company’s financial strength, which will be positively reflected in the business and its shareholders.

During the participation of Obeikan Glass in Intersolar Europe exhibition, which was held in Munich in early May, the company's management held workshops with many other firms and manufacturers to explore the latest technology and identify expansion opportunities.

Obeikan Glass is keen on satisfying local demand for all needs from manufacturing industries in the glass market.

The company’s board of directors directed to start studying several investment opportunities in detail, the most important of which is to build a new production line in Yanbu. The line will be dedicated to the production of highly-transparent glass that is used to produce solar panels, which is in line with the Kingdom's Vision 2030 for reaching solar energy production by 2030, with an estimated capacity of 40 GW.

Results of the company’s plans and studies will be announced in due course.