A look at Saudi Top Trading’s 5-year strategy, expansions

Logo of Saudi Top for Trading Co.

Saudi Top Plastic Trading Co. (STP) unveiled its five-year expansion plans, in line with its vision and objectives, in order to aggrandize value for shareholders, according to the company’s prospectus.

STP’s strategy implies enhancing the value of plastic as well as rubber wastes. This is besides boosting the circular economy via recycling to introduce added-value products locally and in the Middle East.

In addition, the expansion plan features increasing export destinations from 30 to 50 nations over two years. Exports accounted for 81.5%, or SAR 86.2 million, of the company’s total revenue by June 30, 2022.

Meanwhile, STP’s local sales stood at nearly SAR 20 million, or 18.5% of total revenue, as of June 30, 2022.

STP’s total sales to its five largest clients in the local market by the end of June 2022 amounted to SAR 11.6 million, constituting 11% of total local sales.

The company exports a big portion of its output, which helps diversify revenue sources, while eliminating risks pertaining to its dependence on one market.

STP’s sales to the five largest export destinations stood at SAR 25.8 million, or 24% of total sales, as of June 30, 2022.

It further seeks to expand its business portfolio to 27 products, from 20, through the introduction of new wax products. This includes oxidized, micronized and modified polyethylene wax (PE WAX), as well as ethylene-co-vinyl acetate (EVA) and others, to bolster the company’s market positioning and enter the end-product market, where the product cost represents a competitive advantage.

STP seeks to be globally certified to use recycled content in food processing applications. This is in addition to investment in rubber and plastic recycling on an international level.

It also endeavors to expand its plastics recycling operations to include chemical as well as mechanical recycling. This is besides opening distribution offices in fast-growing local markets to help reach end users and boost returns.

Compared to competitors locally or in the target markets, STP has several success fundamentals that buoy sustainability and competitive advantages.

Its cost of production is low and depends on accumulative production expertise. The company has highly-efficient production lines and a strong client base across the various markets it operates in.

It secured long-term exclusive contracts to procure wastes from some leading Saudi firms, including Saudi Basic Industries Corp. (SABIC), Rabigh Refining and Petrochemical Co. (Petro Rabigh), Advanced Petrochemical Co. (Advanced) and Sahara International Petrochemical Co. (Sipchem).