The board of directors of Naqi Water Company announced a new strategic step aimed at enhancing its production capacity in the Saudi capital. The board approved a significant amendment to the scope of its new plant project in Riyadh. The decision included signing an addendum to the original contract, replacing the previously agreed-upon single production line with two independent production lines, a move reflecting the company's commitment to meeting the growing demand in the local market.
According to a statement published on the Saudi Stock Exchange (Tadawul) website, the new modification will increase the project's total production capacity to 120,000 bottles per hour, a 20% increase over the previous target of 100,000 bottles. This capacity will be distributed across two independent lines, each with a capacity of 60,000 bottles, providing the company with high operational flexibility and reducing the risk of a complete production shutdown in the event of a line failure. This aligns with global best industry practices to ensure business continuity.
Financial impact and economic dimensions of the project
In light of this expansion, the contract was repriced, increasing its total value from approximately €8.54 million to €9.58 million. Despite the increase in capital expenditure, the company explained that the new lines feature advanced technologies that enable the use of exceptionally designed packaging, reducing plastic consumption. This will positively impact long-term operational costs and enhance the environmental sustainability of the company's operations.
This move comes in a broader economic context, as the food and beverage sector in Saudi Arabia is witnessing remarkable growth driven by population growth and the growth of the tourism and hospitality sector within the objectives of the Kingdom’s Vision 2030. The expansion into Riyadh is a pivotal step for “Naqi”, given the high population density in the capital and the increasing purchasing power, which makes having a local factory there a crucial factor in reducing transportation and logistics costs compared to relying entirely on the main Qassim factory.
Schedule and regulatory compliance
The company confirmed that the revised project scope will not affect the overall timeline for ongoing construction work in Riyadh, with completion and commencement of commercial operations expected as previously announced. The company anticipates that the financial impact of these adjustments will begin to be reflected in the fourth quarter of 2026.
In the interest of transparency and governance, the company noted that the contract was made with a related party, as the deal is linked to Middle East Machinery Factory Limited, one of whose major shareholders owns significant stakes in Naqi Water Company, stressing that the deal was made in accordance with the regulations and rules approved by the Capital Market Authority to ensure fair transactions.
