The Middle East Paper Company (MEPCO) announced in an official statement on the Saudi Stock Exchange (Tadawul) website that it had received an official notification from Saudi Arabian Oil Company (Saudi Aramco) stating that the prices of fuel products used in its production operations would be adjusted, effective January 1, 2026.
In its detailed statement, the company explained that the relevant departments studied the expected financial impact of this price adjustment. Initial estimates indicate that the cost increase will be approximately 1.8% of the total annual cost of sales, based on the company's latest audited annual financial statements. This financial impact is scheduled to be reflected in the company's financial results starting from the first quarter of fiscal year 2026.
The context of energy reforms in the Kingdom
This measure comes within the framework of the structural economic transformations underway in Saudi Arabia as part of Vision 2030, which aims to improve energy efficiency and maximize the economic return from natural resources. The Kingdom is gradually revising energy and water prices to align with global benchmark prices, ensuring the optimal use of national resources and encouraging industrial sectors to adopt more efficient and sustainable technologies.
Impact on the industrial sector and competitiveness
Adjustments to feedstock and fuel prices are part of a comprehensive strategy aimed at incentivizing national industries to develop their operational infrastructure. While these increases may lead to a slight rise in production costs in the short term, they are pushing major companies like MEPCO and other listed industrial firms to seek innovative solutions to reduce waste and improve operational efficiency. This, in turn, enhances the long-term competitiveness of Saudi products in global markets by prioritizing quality and technology over complete reliance on energy price subsidies.
Mabco's strategy for dealing with changes
In response to these changes, MEPCO reaffirmed its commitment to pursuing its strategic plans aimed at enhancing the efficiency of its operations and developing them in a responsible and sustainable manner. The company indicated its intention to intensify investment in developing production technologies and paper products, as well as maximizing the benefits of the Kingdom's competitive infrastructure. These steps are designed to accommodate fluctuations in energy costs and maintain healthy profit margins, thereby serving the interests of shareholders and supporting the company's future growth.
