MEPCO Targets End-2027 Start-Up for PM5 Containerboard Mill

Middle East Paper Co. (MEPCO) expects commercial operations at its PM5 containerboard mill project to begin by the end of 2027, according to CEO Faisal Haddawi.

The project is progressing according to plan, with a significant portion of the engineering work completed and most contracts awarded, Haddawi told Argaam. MEPCO has reallocated around SAR 291.1 million previously earmarked for acquisitions to help finance the project, bringing the total allocation to approximately SAR 465 million.

The PM5 project will add containerboard production capacity and introduce a low-grammage product weighing 70 grams per square metre. Haddawi said the technology is intended to help develop the market and generate new demand in the corrugated packaging sector.

The company also expects the expansion of its TM6 tissue mill to begin operations by the end of 2026. The expansion will double MEPCO's tissue production capacity from 60,000 tonnes to 120,000 tonnes. The mill is located in King Abdullah Economic City and is close to Yanbu Port, Jeddah Port and King Abdullah Port.

Haddawi said reallocating funds to the containerboard project does not mean MEPCO has stopped evaluating acquisition opportunities. The company continues to assess opportunities that could create strategic value for shareholders, with a focus on potential value-chain integration.

Waste Collection and Recycling Co. (WASCO), a wholly owned MEPCO subsidiary that supplies key raw materials for paper manufacturing, supports the company's vertical integration strategy, he said.

MEPCO reported an 8% increase in revenue in the second quarter of 2026 compared with the same period of 2025, while domestic-market revenue rose 23%. Lower manufacturing costs helped increase operating profit from approximately SAR 12 million in Q2 2025 to SAR 20.3 million in Q2 2026, a 70% increase, according to Haddawi.

The company is also working to strengthen supply chains and manage costs amid regional geopolitical developments, while using AI technologies and modern tools to improve raw material procurement and inventory management.