Saudi linerboard project takes off

Middle East Paper Company is taking a brave step into the paper industry with the construction of its first greenfield board mill. Regional consumption figures suggest that the extra output could be snapped up as soon as it comes off the end of the machine

There are three major expansion projects taking place in Saudi Arabia's packaging sector this year. Firstly, Waraq (also known as Arab Paper Manufacturing Company) is installing a new 100,000 tonne/yr linerboard PM at its mill in Dammam. Secondly, Obeikan is building a 150,000 tonne/yr greenfield cartonboard plant in Riyadh. Thirdly, Middle East Paper Company (MEPCO) is constructing a 100,000 tonne/yr greenfield linerboard mill in Jeddah, by the Red Sea. But only one of these projects is ready for lift-off.

Mepco aims to get the mill up and running by the end of July

MEPCO is leading the pack, as well as making its first foray into the paper industry. The company is on track to start up a new board mill by the end of July this year. The site will produce 100,000 tonnes/yr of kraft top and white-top testliner, as well as fluting material for cartons. On top of its interest in the paper industry, the Dammam-based group is also active in other areas including metal and building materials.

But it is the paper industry that is holding MEPCO's attention at the moment. The company has just spent around $50 million on the new paper mill project. According to Shaikh Faisal Mubin, the company's sales and marketing manager, the money is well spent, as MEPCO's output will satisfy around half of Saudi Arabia's annual demand for kraft top testliner, white-top testliner and fluting. The region's total demand for these grades is in excess of 200,000 tonnes/yr. Until now, board has been imported from Spain, UK, Italy, Germany, France, Norway and Indonesia, with a small amount coming from Kuwait and Dubai. Closer to home, Waraq's existing mill in Dammam has been supplying up to 55,000-60,000 tonnes/yr.

Capitalizing on consumption

MEPCO's output of 100,000 tonnes/yr will include around 55,000 tonnes/yr of testliner and some 45,000 tonnes/yr of fluting. Shaikh Faisal estimates that Saudi Arabia's per capita consumption of paper and board is 38.6 kg and that projected demand in the region for MEPCO's grades will include 98,000 tonnes/yr of testliner and 105,000 tonnes/yr of fluting. Demand in the rest of the Gulf Cooperation Council (GCC) countries is pegged at 65,000 tonnes/yr of testliner and 75,000 tonnes/yr of fluting. High demand coupled with the fact that the Gulf's consumption of these grades is estimated to be growing at 3-5%/yr means that MEPCO could have plenty to look forward to in the future.

The company has spent over $50 million on the site

Initially, the company expects to sell 65-70% of its production in Saudi Arabia. The remaining tonnage will be shipped to other GCC states and neighboring countries.

The Gulf region has five factories, which produce testliner and fluting. Two of the sites are in Saudi Arabia with the others located in the United Arab Emirates (UAE), Kuwait and Oman.

Innovative machinery

But MEPCO is confident that it can outrun its competitors. "MEPCO will be the first [papermill] of its kind in the Gulf in that our machinery and technology are the most recent. On top of that, we are introducing a different technique in producing testliner and fluting materials. Our equipment will have two headboxes while most others have just one," commented Shaikh Faisal.

Italy's Over Meccanica is supplying the board machine, which has a wire width of 2.5 m and an operating speed of 850 m/min. The machine was delivered to the site in October last year and erection of the unit began in January. Fellow Italian firm, Comer, is providing the stock preparation plant. The equipment was delivered earlier this year and erection started in February.

The mill's output will be made from recycled paper, due to the lack of locally made pulp in the Middle East. Paper collectors in Saudi Arabia will supply most of the raw material. "Old cartons will serve as raw material with some 25% of the requirement coming from imports," says Shaikh Faisal, who used to work as marketing manager in the Jebel Ali Dubai office of Sweden's Ekman.

Getting the mill up and running will be a major achievement, but the company could expand further in the years ahead. "We have no specific plans yet for a second phase, but MEPCO looks forward to becoming a leading manufacturer in the paper and paperboard industry of the Arab world," he continues.

"At MEPCO, we'll be fully dedicated to achieving our targets and will be working to reach a high level of trust in the relationships with our customers. The most important criteria in the customer-supplier relationship is the customer's full satisfaction. Our motto is to be a partner not a competitor," comments Shaikh Faisal.

Mepco's team of experts is vital to the project's success

Maintaining perspective

Meeting customer requirements is not the only goal that the company has in mind. "MEPCO dreams of a new world in the 21st century, one where prosperity and respect for nature and forward looking corporate minds are the standard. We plan to be an active player in making this dream a reality utilizing cutting edge technology and the most modern production facilities. Our commitment to quality will be demonstrated in our products. The quality of the product is, in turn, a reflection of a corporate philosophy," he adds.

MEPCO's goal is to serve the surrounding community, as well as making a highly marketable product. The company aims to produce high-quality board, which is also an environmentally friendly product. MEPCO has selected the latest technology and brought together a team of professionals to help it achieve this goal.

Members of the team include the mill's general manager, Abdullah bin Abdul Rahman Al Moammar, who used to work at Saudi Paper Manufacturing Company. Al Moammar is a well-known figure in the Middle Eastern tissue industry following his attachment with the Saudi tissue unit in Dammam. Other players include MEPCO's technical/operations manager, Maamoun Zreik, who gained his experience from companies including Amcor Australia, Indevco and Western Hardwood, Africa.

Following the startup of the plant in the middle of this year, time will tell if there is scope for MEPCO to make further forays into the linerboard market.

Shaikh Faisal Mubin is sales and marketing manager of MEPCO