MEPCO says in talks with banks to finance tissue plant: report

Middle East Paper Co. (MEPCO) is in talks with foreign and local banks to partly finance its tissue paper and hygienic paper jumbo rolls production plant, CNBC Arabiya TV reported, citing CEO Sami Safran.

He added that the project will be 50% financed from the Saudi Industrial Development Fund (SIDF), noting that MEPCO holds healthy liquidity and a good debt-to-equity ratio. The company's total loans currently stand at approximately SAR 600 million, the CEO added.

The Saudi market consumes about 250,000 tons of paper products, of which 70,000 tons are produced locally and the rest is imported from abroad, he said.

The new plant targets a production of 60,000 tons of paper products in the first phase and there is scope for expansion to cover the local market, and later export.

MEPCO currently produces 500,000 tons of paper products, representing 50% of the Saudi market's need, the CEO said, adding that the Tadawul-listed firm exports almost 40% of its production.

On Dec. 7, the board of directors approved the establishment of tissue paper and hygienic paper jumbo rolls production plant at an estimated cost of SAR 338 million, according to data compiled by Argaam.