Overview of Rayan Industrial’s production capacity, products and expansion projects

Logo of Rayan Advanced Industrial Co.

Rayan Advanced Industrial Co., a leading manufacturer of packaging materials for the health and commercial sectors, plans to sell two million shares, or 20% of its capital, on Nomu-Parallel Market.

Rayan’s current business activity is the production, selling and marketing of the plastics used in specialized packaging, which depend on high-and low-density polyethylene.

The company has three factories in Riyadh Second Industrial City, which operate with a capacity of nearly 21,700 metric tons annually (mta). Factory No. (1) was founded in 1989 and began production in 1991, with a capacity of 300 mta. It raised this capacity to 9,000 mta in 2016. Factory No. (1) has 10 film production lines.

Rayan inaugurated factory No. (2) in 2009, with a total capacity of 2,500 mta, then boosted production to nearly 6,500 mta in 2010. Factory No. (2) includes two polyethylene “backsheet” production lines.

In 2019, Rayan opened factory No. (3) with a capacity of 4,500 mta. In 2020, the factory’s production capacity was increased to almost 6,300 mta. It has a polyethylene “backsheet” production line, in addition to other two lines for films.

Rayan is working on ramping up its production capacity by adding new lines in factory No. (3), and building two additional factories No. (4) and (5) in Riyadh Second Industrial City. These projects will boost the company’s annual capacity by nearly 29,500 mta. Accordingly, Rayan’s total production capacity will almost rise 136% to near 51,300 mta when its expansion projects are completed.

The company indicated that the first expansion project will be completed in 2023, by adding 6,250 metric tons to the production capacity of factory No. (3). Meanwhile, other expansion projects of factories No. (4) and (5) will take place between 2024 and 2028. The estimated cost of expansion projects is around SAR 164 million. Rayan expects the increase in production lines to deliver positive growth to its business, due to high demand for the company's products and limited manufacturers of similar products.

Further, the company added it already completed leasing land plots for the additional factories and some production lines were ordered for expansion, stressing that the expansions aim to ramp up production capacity and maintain the same products.

The company's revenues from film products reached almost SAR 70 million in H1 2022, constituting approximately 63% of total revenues. Meanwhile, revenues from polyethylene (backsheet) reached SAR 42 million, or about 37% of total revenues during the same period.

On market level, Rayan deals with a large number of clients inside and outside the Kingdom. It also sells products to several GCC countries and others in the Middle East and North Africa (MENA), thanks to the company's top-notch production lines, quality products and excellent customer service.

The company's sales in the Saudi market exceeded SAR 69 million, or 62% of total sales, in H1 2022. Export sales reached around SAR 43 million, or 38% of total revenues, during the same period.