Saudi Arabia’s Public Investment Fund has acquired a 23.08% stake in the Middle East Paper Company known as MEPCO.
The acquisition aims to support the expansion of MEPCO’s core business in the production and recycling of paper-based products throughout the Middle East and North Africa.
The strategic move, part of Vision 2030 aims to support environmental sustainability through recyclable products and also expand the PIF’s role in the construction sector through the manufacture of specialized building materials such as gypsum thereby supporting local supply chains.
A Major Stake in MEPCO
The Public Investment Fund (PIF) of Saudi Arabia has strategically acquired a 23.08% stake in MEPCO, a prominent paper manufacturing company listed on Tadawul, Saudi Arabia’s stock exchange. This acquisition was carried out through a capital increase and subscription to new shares.
MEPCO, recognized as one of the leading manufacturers in the Middle East, specializes in the production and recycling of paper products. The company offers a wide range of products for various sectors, including packaging, construction, and furniture.
The transaction was finalized after an initial agreement in May between both parties, where MEPCO disclosed that the PIF intended to acquire a considerable minority stake in the company at 31.50 Saudi riyals ($8.40) per share.
Through this investment, the PIF is expanding its portfolio in the paper-based products manufacturing sector in the Middle East and North Africa, thereby supporting the private sector in Saudi Arabia and boosting local content.
Advancing Production and Operational Efficiency
PIF’s investment is poised to enhance MEPCO’s production capabilities, marking a crucial step in the growth trajectory of both entities.
The fund’s backing will provide crucial financial support to MEPCO, enabling the company to implement its expansion strategy and capture significant growth opportunities both locally and regionally.
Driving Environmental Sustainability
Beyond enhancing operational efficiency, PIF’s investment also aims to promote environmental sustainability through the production of recyclable paper goods. This commitment aligns with Saudi Arabia’s sustainability objectives and the fund’s mission to back eco-friendly industries.
PIF and MEPCO are leading the way in sustainable operations, setting an example in the industry.
MEPCO’s Expansion Strategy
PIF’s involvement significantly impacts MEPCO’s expansion strategy, particularly in packaging and specialized building materials like gypsum boards. This diversification of MEPCO’s product range enhances its market reach, thereby strengthening the local supply chain for ongoing and future projects.
The investment strengthens local supply chains and benefits multiple industries, including construction and packaging. Future projects stand to gain from improved supply efficiency, fostering a resilient local market, and promoting regional development.
PIF’s Diverse Investment Portfolio for Economic Development
PIF boasts a diverse investment portfolio that includes real estate, construction, and building projects. These investments support sustainable economic development, attracting both local and international investors. The portfolio showcases PIF’s investment acumen, reflecting a commitment to economic growth.
PIF is actively contributing to the diversification of Saudi Arabia’s economy in alignment with Vision 2030, focusing on 13 priority sectors including retail, construction, and real estate.
The fund’s investments are crucial for long-term economic stability and contribute significantly to the Kingdom’s vision for the future.
PIF’s Role in Supporting Key Industries
PIF’s investment also underlines the fund’s role in supporting key industries. MEPCO’s expansion aligns with the Kingdom’s economic goals and contributes to the growth of the industrial sector.
This strategic move will drive MEPCO’s future success and solidify the role of the Public Investment Fund as a key investment player.
“PIF’s investment in Mepco reflects the attractive opportunities for growth in promising sectors such as recycling, retail, and building materials,” said Muhammad Aldawood, head of the industrials and mining sector in Mena investments at the wealth fund.
MEPCO and the Construction Industry
MEPCO is actively strengthening the construction sector in Saudi Arabia by investing in cutting-edge construction technologies, fostering partnerships with local suppliers, and supporting workforce development initiatives.
By embracing innovation and efficiency, MEPCO is leading the industry in adopting advanced construction practices that enhance project quality and cost-effectiveness.
Collaborating with local suppliers and manufacturers, MEPCO is bolstering the domestic supply chain, reducing reliance on imports, and stimulating the growth of local businesses.
Additionally, MEPCO’s commitment to workforce development and training programs is ensuring a skilled labor force for the construction industry, contributing to its long-term sustainability and competitiveness.
Investing in the Future
The PIF continues to invest in a broad range of sectors as part of the country’s economic diversification strategy under Vision 2030. Over the years, PIF has launched more than 87 companies while creating over half a million direct and indirect jobs.
PIF’s strategic investment in MEPCO is a significant step towards achieving Saudi Arabia’s Vision 2030. By enhancing production, supporting the economy, and promoting a circular economy, the fund is instrumental in pushing forward the Kingdom’s sustainability goals.
This investment also strengthens Saudi Arabia’s market competitiveness and the private sector, positioning PIF as a key economic influencer.
PIF’s Latest Global Ventures
The Public Investment Fund (PIF) of Saudi Arabia has acquired significant stakes in two prominent entities. The PIF has purchased a 49% stake in Rocco Forte Hotels, a luxury hotel group.
This investment is part of a broader strategy to help the hotel chain double its size over the next five years, with plans for expansion into the Middle East, Italy, and the US.
Additionally, the PIF has acquired a 10% stake in Heathrow Airport, a key player in global aviation. These acquisitions are part of the PIF’s larger investment strategy and demonstrate its commitment to diversifying its portfolio and expanding its influence in various sectors.
The PIF Revealed As The Top Global Investor in 2023
In 2023, Saudi Arabia’s Public Investment Fund (PIF) became the leading global sovereign wealth fund investor, surpassing Singapore’s GIC. It invested $31.6 billion across 49 deals, marking a 33% increase from 2022.
This growth underscores the PIF’s varied portfolio in sectors like aviation, sports, gaming, electric vehicles, and luxury hotels, reflecting its alignment with the Saudi Vision 2030 objectives to diversify the economy away from oil.