Rayan Advanced Industrial CEO: Demand for packaging materials grows 7% annually in Saudi Arabia and the GCC

Logo of Rayan Advanced Industrial Co.

Rayan Advanced Industrial Company’s CEO, Sami Joudeh, said that demand for packaging materials grows by 5-7% annually in the Saudi and GCC markets.

In an interview with Argaam, Joudeh expected Rayan’s revenue to surpass SAR 220 million in 2022, and rise to nearly SAR 255 million in 2023, based on market data in terms of demand levels and the company’s production capacity.

Rayan seeks to grow its revenue by exporting to over 18 countries in the Middle East and North Africa (MENA). This goal aligns with the Kingdom’s Vision 2030, which aims at income source diversification and higher exports to foreign markets by local firms, Joudeh elaborated. He added that Rayan’s revenue from exports will account for 38% of the total revenue by the end of 2022.

Rayan works on ramping up its capacity by over 25% in 2023, Joudeh added, pointing to the company’s expansion plan mentioned in its offering prospectus. The current production capacity stands at nearly 21,730 metric tons annually (mta). Rayan eyes a capacity increase of 6,250 mta in 2023.

On the other hand, Joudeh also spoke about instability and fluctuations in the prices of films and low-density polyethylene (LDPE), noting that it is difficult to accurately predict their prices. In the meantime, he stressed Rayan’s ability to manage the risks arising from price fluctuations, citing the firm's robust performance in the last few years.

Rayan’s inventory policy is to always maintain raw materials supply sufficient for minimum three months, to face any supply chain disruptions. “This inventory policy gives us an opportunity to maintain production levels, face increases in raw material prices, if any, and provides us with the ability to notify our customers of any shortage or price changes in advance,” Joudeh affirmed.

Rayan’s plan to list its shares on the Parallel Market (“Nomu”) primarily aims to ensure sustainability of business for future generations, secure finance easily, enhance governance and transparency levels in the company, and lure professional cadres that help the company maintain its outstanding performance and success, Joudeh concluded.