Middle East Paper Co. Announces latest developments for Fifth paper machine (PM5)
| Element List | Explanation |
|---|---|
| Introduction | With reference to the announcement made by Middle East Paper Co. (“MEPCO” or the “Company”) on 23 April 2024 regarding the Paperboard Manufacturing Plant (Fifth Paper Machine – “PM5”) project, the Company announces the latest developments related to the project, including an update to the expected project completion timeline and the total estimated project cost, as follows: Expected Date for Commencement of Trial and Commercial Production: Q1 2028, instead of Q4 2027. Updated Estimated Project Cost: SAR 1.881 billion, compared to the previously estimated project cost of approximately SAR 1.78 billion a 5.7% escalation from previous announcement. |
| Previous Announcement | Middle East Paper Co. Announces Fifth paper machine (PM5) |
| Date of Previous Announcement on Saudi Exchange’s Website | 2024-04-23 Corresponding to 1445-10-14 |
| Hyperlink to the Previous Announcement on the Saudi Exchange Website | Click Here |
| Latest Developments Of The Announced Event | Expected date for the start of the project's trial / pilot production: Q1 2028. Duration of the project's trial / pilot production: Until commercial production begins. Expected date for the project's commercial production: Q1 2028 |
| Reasons For The Delay on The Date of The Event Previously Announced | Supply chains have been impacted due to surrounding geopolitical conditions. |
| The costs associated with the event, and if they have changed or not with indication of the reasons. | The increase in the expected cost is driven by cost escalation in civil construction, enhanced energy solution for steam and power and increased global freight & logistics costs .As a result, the updated expected Internal Rate of Return (IRR) is now estimated at 12%. |
| Delay consequences on the Company’s financial results | The positive impact of the project's commercial production on the financial statements has been delayed. The Company expects the Project to commence production during Q1 - 2028, with the resulting incremental contribution to EBITDA expected to be reflected in the Company's financial results after commencing production. |
| Attached Documents |  |
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