Naqi Water extends deal with MEMCO for production line upgrades

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Riyadh — Mubasher: Naqi Water Company has announced a significant update regarding the development of its primary production facilities in the Al Qassim region.

The company has signed an addendum to its existing contract with Middle East Machinery Manufacturing Company Limited (MEMCO) for the supply and installation of advanced machinery.

This amendment introduces additional technical upgrades designed to enhance operational efficiency and sustainability while simultaneously adjusting the project’s completion schedule and total investment cost.

The latest disclosure follows an initial agreement between Naqi Water and MEMCO, originally valued at EUR 900,000, which focused on the modernization of an existing production line at the company’s main factory.

Under the newly signed addendum, Naqi Water will invest an additional EUR 114,600 to implement further technical enhancements. These upgrades are specifically engineered to optimize the production process by reducing the weight of plastic used in bottle manufacturing.

By decreasing raw material consumption, the company aims to align its industrial operations with broader environmental and resource-efficiency goals.

From a technical standpoint, the modifications involve sophisticated adjustments to the machinery and the production line infrastructure. While these enhancements are expected to yield long-term operational benefits, they have necessitated a revision of the project’s execution timeline.

Naqi Water confirmed that the additional time required for the implementation, testing, and commissioning of these upgrades has shifted the expected date for commercial operation.

The company now anticipates that the supply, installation, and full operational launch of the developed line will be completed during the first half (H1) of 2027.

The financial implications of this delay and the increased capital expenditure will be reflected in the company’s future financial statements.

Naqi Water noted that the expected financial and operational impact of the upgraded line has been rescheduled to coincide with the new commencement date in early 2027. This strategic adjustment ensures that the facility will benefit from the latest efficiency-driven technologies upon its launch, despite the extended development period.

A critical component of this disclosure involves the nature of the transaction, which is classified as a related party deal. The contract addendum was executed with MEMCO, a firm in which a major shareholder holds a 50% stake.

This same shareholder also maintains a 50% ownership interest in Suqia Company, which in turn holds a 35% stake in Naqi Water. Naqi Water emphasized that the transaction was conducted in accordance with the company’s internal governance policies and met all regulatory requirements set by the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul).

The decision to expand the scope of the machinery contract reflects Naqi Water’s focus on integrating sustainable practices into its core manufacturing processes.

By prioritizing the reduction of plastic consumption through technical innovation, the company seeks to mitigate environmental impact while potentially lowering long-term production costs. This update serves as a continuation of the company’s efforts to modernize its infrastructure in the Al Qassim region, ensuring its production capabilities remain competitive within the evolving Saudi consumer goods market.

Source: Mubasher Source: {{details.article.source}}