New Saudi conversion line to start in October, new Jeddah plant underway: UCIC CEO

Mohnish Rikhy, CEO of United Carton Industries Co. (UCIC)

United Carton Industries Co. (UCIC) expects to begin operating its new conversion line in Saudi Arabia by October 2026, CEO Mohnish Rikhy told Argaam.

The company is assessing its future production capacity requirements in line with expected demand growth in the Kingdom, he added.

UCIC started procedures to establish a new plant in Jeddah and is conducting a feasibility study for a containerboard paper mill in Saudi Arabia.

Rikhy said UCIC started procedures to establish a new folding carton plant in Jeddah, which is expected to begin operations in Q4 2026, strengthening the company's ability to meet domestic demand and expand its presence in Saudi Arabia.

The company is also expanding its corrugated carton plant in the UAE, with the additional capacity expected to come online in Q3 2027, as part of its strategy to boost production capacity and reinforce its competitive position in both Saudi Arabia and the UAE.

Commenting on the company's Q2 performance, Rikhy said higher net profit was driven by a lower comparison base, stronger sales volumes, improved operational flexibility and effective supply chain management.

Sales Volume Remained Main Revenue Driver

Rikhy said higher sales volumes were the main contributor to revenue growth during Q2 2026, supported by higher average selling prices. He added that all business segments in Saudi Arabia and the UAE posted positive trends, with corrugated carton, folding carton and containerboard.

businesses performing well, although the folding carton segment faced pricing pressure, raw material shortages and shipping disruptions from Asian suppliers.

He added that the company's main challenge in H2 2026 will be maintaining growth momentum amid continued pressure from higher commodity and raw material prices, while remaining focused on volume growth and operational efficiency.

Higher Paper Prices

The CEO noted paper prices increased in both domestic and international markets over recent months, mainly due to geopolitical developments and higher logistics costs. Although he did not quantify the increase, he noted that UCIC has implemented measures to mitigate the impact and expects commodity prices to remain closely linked to regional geopolitical developments.

Freight Costs and Raw Material Availability

Rikhy pointed out that geopolitical developments disrupted global supply chains, leading to higher freight costs, longer transit times and tighter vessel availability. However, the company reduced the impact through proactive supply chain management, supplier diversification, inventory optimization, reallocating raw materials between plants and rerouting shipments where necessary.

He added that domestic paper production helped stabilize supplies, while UCIC's flexible supply chain enabled it to maintain uninterrupted deliveries to customers in Saudi Arabia and the UAE despite delays in certain imported paper grades.

More Than 95% of Sales Are Domestic

The CEO said more than 95% of UCIC's revenue comes from the domestic market, with demand remaining healthy across consumer goods and industrial sectors during Q2 2026, supporting sales volume growth.

He added that the company's UAE operations also delivered growth despite a challenging market, partly due to a lower comparison base and improved operational execution, while expressing optimism for a gradual market recovery.

Capacity Utilization at 85%

Rikhy highlighted that all business segments, except paper, are operating at around 85% capacity utilization, while the UAE containerboard mill is running close to full capacity.

He noted that strong demand and business momentum have encouraged UCIC to proceed with its expansion plans.

H2 2026 Outlook

Rikhy said the company's H2 2026 performance will largely depend on geopolitical developments and their impact on demand, selling prices and raw material costs.

Assuming greater supply chain stability, UCIC will continue focusing on risk mitigation and operational efficiency, the CEO said, expressing confidence that the company will emerge from the current environment in a stronger competitive position.