In a move reflecting the drive to enhance local industrial capabilities, the board of directors of Eastern Integrated Pipes Company announced last Thursday its official approval of a project to establish a new production line dedicated to the external coating of steel pipes. This vital project is located at the company's pipe coating plant in the Second Industrial City of Dammam, a hub for heavy industries in the Eastern Province.
Project details and timeline
In an official statement published on the Saudi Stock Exchange (Tadawul) website, the company revealed that the estimated cost of this investment project is approximately SAR 78.5 million. The company has established a precise implementation timeline, with construction scheduled to begin in February 2026. The company explained that the expansion will be financed through a balanced mix of available cash, along with access to bank facilities and financing programs, reflecting the company's strong financial position.
Doubling production capacity and meeting demand
The primary objective of this expansion is to achieve a significant leap in the plant's operational capabilities. The company aims to double its current nominal production capacity from approximately 4 million square meters to 8 million square meters annually. This step comes as a direct response to the growing demand in the Saudi and regional markets for coated steel pipes, which form the backbone of the infrastructure for water, oil, and gas transportation projects.
The context of industrial growth and Vision 2030
This announcement cannot be viewed in isolation from the massive economic transformation underway in Saudi Arabia under Vision 2030. The industrial and construction sectors are experiencing unprecedented growth, driven by mega-projects and major infrastructure developments. The pipe and coating industry is a cornerstone for ensuring the sustainability of strategic transportation networks and protecting them from corrosion, particularly in harsh desert and marine environments.
This project enhances the position of the local product, as it contributes to reducing dependence on imports and raising the percentage of local content in national projects, which is one of the main objectives of the National Industrial Development and Logistics Program (NIDLP).
Expected financial impact
Regarding the financial impact, East Pipes clarified that the expected completion date for construction is the first quarter of the 2027-2028 fiscal year. It also indicated that trial production will commence in the same quarter and will last for one month, immediately followed by commercial production. Accordingly, the company anticipates that the project's positive financial impact will begin to be reflected in its financial statements starting from the first quarter of the 2027-2028 fiscal year, promising attractive returns for shareholders in the long term.
