Saudi Paper says buoyant demand for products behind capital hike, supply chain issue may continue in 2022

Saudi Paper Manufacturing Co. CEO Yousseri Elbishry

Growing demand for Saudi Paper Manufacturing Co.'s products led the board of directors to recommend capital increase, CNBC Arabia TV channel reported, citing CEO Yousseri Elbishry.

He added that the decision was taken after conducting a thorough study to secure the company's needs of raw materials and rehabilitate its complexes.

Elsewhere, Elbishry said the paper manufacturer purchased goods worth SAR 65 million to avoid the recurrence of the supply chain problem. He indicated that the company worked to secure large reserves, as it has goods securing its needs for three months, and there are other goods that will secure its needs for the next six months.

The top executive expects the supply chain problem to continue in 2022, which will earlier require the purchase of larger quantities of raw materials.

The company worked on its capital increase plan to build an inventory larger than its needs, as a total of SAR 70 million will be allocated from the capital hike proceeds to secure raw materials.

When asked about the impact of high energy prices on the company, Elbishry said it would be limited, explaining that firm had paid all its obligations that amount to SAR 170 million to banks from 2020 to 2021. This, accordingly, boosted the banks' confidence in the company, and led them to grant it some quick facilities and necessary credits to secure materials.