Saudi Arabia's PIF Acquires Significant Stake in Mepco to Boost Regional Paper Production

The Public Investment Fund (PIF) of Saudi Arabia has finalized its investment agreement with the Middle East Paper Company (Mepco), a renowned producer specializing in paper-based products across the Middle East and North Africa region.

In a recent development, PIF has secured a substantial 23.08% stake in Mepco through a capital increment and the acquisition of new shares.

This acquisition received the green light after obtaining necessary endorsements from pertinent regulatory bodies and Mepco's stakeholders, who endorsed the deal during a special general assembly, as confirmed by a PIF spokesperson.

PIF's investment aims to bolster Mepco's production capabilities, enhance operational efficiency, and champion environmental sustainability by promoting recyclable goods.

This aligns seamlessly with the sustainability visions set forth by both Saudi Arabia and PIF, as highlighted in their official statement.

Furthermore, this strategic investment is poised to accelerate Mepco's growth trajectory, particularly in segments like packaging and specialized construction materials such as gypsum boards, commonly referred to as "drywall."

This move aims to fortify the local supply chain, catering to present and prospective projects.

Notably, PIF boasts a multifaceted investment portfolio in construction services, fostering the sustainable evolution of the Saudi economy by enticing both domestic and international investments, expanding operational prowess, and facilitating technological transfers.

Aligning with Vision 2030, PIF is proactively bolstering 13 pivotal sectors domestically in collaboration with private enterprises, fostering economic diversification.

This encompasses sectors like retail, construction, and real estate, all integral components of PIF's overarching investment blueprint.

Commenting on this development, Muhammad Aldawood, Head of Industrials and Mining Sector in MENA Investments at PIF, remarked, "Our stake in Mepco underscores the growth potential inherent in burgeoning sectors like recycling, retail, and construction materials. This collaboration paves the way for Mepco to amplify its sustainable production endeavors, emphasizing high-value offerings and augmenting its export footprint."

Echoing this sentiment, Eng Sami Al Safran, CEO of Mepco, expressed optimism, stating, "PIF's strategic investment accentuates our expansion blueprint, unlocking substantial growth avenues both domestically and regionally. This partnership propels Mepco closer to achieving national prominence within our sector. Our distinctive strategy amalgamates paper product innovation with waste management initiatives, channeling investments into transformative projects that resonate with Saudi Arabia's sustainability aspirations."

The burgeoning Saudi market, characterized by its rapid expansion and emphasis on domestic production, offers a fertile ground for investments in paper-centric industries, including tissues.

PIF's collaboration with Mepco not only galvanizes the Saudi private sector but also amplifies local content creation, elevates export quality, and bolsters competitiveness on a global scale, the statement concluded.

Source: TradeArabia