Riyadh — Mubasher: Middle East Paper Company (MEPCO) announced a revision to the timeline and budget for its fifth production line (PM5) project, raising the total expected cost to SAR 1.88 billion.
The updated figure represents a 5.70% increase from the previously estimated SAR 1.78 billion announced on 23 April 2024, according to a bourse filing.
MEPCO now expects both trial and commercial production to commence in the first quarter (Q1) of 2028, shifting from the earlier target of Q4-27.
The company attributed the delay to supply chain disruptions caused by regional geopolitical conditions.
Meanwhile, the cost increase was driven by higher civil construction expenses, enhanced power and steam solutions, and rising global shipping and logistics costs.
Despite the adjustments, MEPCO reported that engineering works have reached 98% completion. The updated internal rate of return (IRR) for the project is estimated at 12%.
Furthermore, the company expects the financial impact of the project to be reflected in its earnings before interest, taxes, depreciation, and amortization (EBITDA) once operational activities begin in 2028.
