Riyadh – Mubasher: Filing and Packing Materials Manufacturing Company signed an agreement on Tuesday with EIRAD Investment Co. to take part into an under establishment limited liability company.
FIPCO will own 80% in the company, with the purpose of establishing a new project to produce one of the products of the manufacturing industries, according to a bourse filing.
The new project is scheduled to start in the first quarter of 2017 with an estimated investments amounting to SAR 122 million, to be financed from the company resources and bank facilities.
The main product lines are estimated to be supplied during Q2-18, while the trial production will continue for two months from the product line installation. It is also expected that the commercial production of the project will begin in Q3-18, the statement said.
The company forecasted that the deal will have positive impact on its results, based on financial, technical and marketing studies, which can be estimated at SAR 2.6 million FY 2018.
The statement noted that, as per the studies, the operating ratios will grow annually starting from the beginning of the commercial production as a result of gradual higher market share.
The financial impact on FIPCO statements will appear in Q3-18 after the commercial production; however, the company will indulge in the technical and financial needs for the project starting from Q1-17.
FIPCO assuresd that no related parties will be involved, and any material developments in this regard will be announced in due course.
