Saudi wealth fund PIF hikes stake in MEPCO to 23.08%

Saudi Arabia’s Public Investment Fund (PIF) has increased its stake in the Middle East Paper Company (MEPCO) to 23.08 per cent through a capital increase and the subscription of new shares.

PIF’s investment will further contribute to achieving MEPCO’s expansion strategy, especially for packaging and specialised building materials such as gypsum boards while strengthening the supply chain for current and future projects.

The state investor said, in a statement, that the investment will enable MEPCO to expand its production, raise its operational efficiency, and support environmental sustainability.

“PIF’s investment further enables the implementation of our expansion strategy and captures significant growth potential, both locally and regionally. This will help create new opportunities, as MEPCO continues its journey to become a national champion in our industry,” said Eng. Sami Al Safran, CEO of MEPCO.

“MEPCO is investing in the sector through ambitious projects to support Saudi Arabia’s goals of sustainability and transition to a circular economy by recycling, reducing waste and converting waste into energy sources to meet our business needs.”

#PIF has announced the completion of a deal to invest in the Middle East Paper Company (MEPCO), a leading manufacturer specialized in producing and recycling paper-based products in the Middle East and North Africa.

— Public Investment Fund (@PIF_en) January 4, 2024

Saudi Arabia’s $700bn wealth fund has a diversified portfolio of investments in the construction services sector to support the sustainable growth of the local economy, attract investments, expand operational capacity and transfer technology.

The kingdom provides promising opportunities for investment in paper products and related industries such as tissues due to its rapid growth and the drive for localisation of production.

PIF’s investment in MEPCO supports the private sector in Saudi Arabia, boosts local content, increases high-value ready-for-market exports, and improves quality and competitiveness.

Saudi PIF’s vast portfolio

Meanwhile, Saudi Arabia’s sovereign fund is investing in a broad range of sectors, including retail, construction and real estate, 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.

The state investor has been creating companies across a wide range of industries as it takes on an increasingly assertive role in diversifying the domestic economy away from oil.

A report published by Global SWF showed that PIF invested $31.6bn in 2023, accounting for about a quarter of the almost $124bn spent by sovereign wealth funds worldwide last year. That was higher than the $20.7bn it invested in 2022, as the fund is boosting its deal activity even as most global peers including GIC and Temasek Holdings slashed spending.

PIF was behind the largest sovereign-backed deals of the year, either directly or through its subsidiaries. These include its nearly $5bn acquisition of US gaming company Scopley through Savvy Games Group and a $3.6bn acquisition of Standard Chartered’s aviation leasing business through Avilease.

The fund owns stakes in tech companies such as ride-hailing firm Uber Technologies, soccer teams including English Premier League’s Newcastle United, electric carmakers Lucid and Ceer and is funding a host of new cities in the desert such as the $500bn futuristic NEOM City and the Red Sea Development Company’s mega tourism project.

Read: How world sees GCC: Region’s sovereign wealth funds on the rise