Crown Paper Mill (CPM) and Ittihad Paper Mill (IPM), both UAE-based companies, are expanding their operations by installing a new tissue paper mill and launching new cut-size A4 paper brands in Saudi Arabia. Notably, CPM will be the first UAE-based tissue paper mill to expand its operations into Saudi Arabia. The new mill is expected to be operational by the end of 2025 and will increase the group’s tissue paper production capacity from the current 1,00,000 TPA to 1,60,000 TPA. In an exclusive interview, Mr. Abdullah Al Khateeb, Managing Director of CPM and IPM, a veteran with over 34 years of industry experience, discusses the latest developments at both companies. He also highlights advancements in the tissue paper business, one of the group’s key business verticals.
Paper Mart: Brief us about Ittihad Paper Mill.
Abdullah Al Khateeb: With a manufacturing facility spanning 2,50,000 square meters in the Industrial City of Abu Dhabi, UAE, Ittihad Paper Mill (IPM) is a leading paper mill in the region. As a flagship project of the UAE’s private holding group – Ittihad International Investment, the mill provides a diverse range of paper products in various grammages, shades, and sizes. IPM is committed to delivering consistent supplies and high-quality grades, ensuring dependable printing solutions for its clients and partners.
PM: Can you walk us through the new developments at Crown Paper Mill and Ittihad Paper Mill?
AAK: Crown Paper Mill is in the process of expanding in Saudi Arabia, with plans to be operational by the end of 2025. Our mill is one of the largest manufacturers of tissue paper in the UAE. As a prominent player in the region, we have recently begun construction on a new tissue paper mill in Saudi Arabia. This mill is designed to meet the ever-growing demand in the region, increasing our tissue paper capacity by more than 60,000 tonnes. Currently, our capacity is 1,00,000 tonnes, and this new mill aims to raise our overall tissue paper production capacity to 1,60,000 tonnes.
Regarding IPM, we plan to launch cut-size paper brands, specifically A4 brands, in Saudi Arabia in the future. These are the two new developments for CPM and IPM in the tissue paper and paper categories, respectively.
We have started the construction of a new tissue paper mill in Saudi Arabia which will be operational by the end of 2025. Currently, our capacity is 1,00,000 tonnes and this mill aims to increase our overall tissue paper production capacity to approximately 1,60,000 tonnes.
PM: Can you tell us more about the new tissue paper machinery that is under construction in your facility?
AAK: We have acquired the new tissue paper machinery from Valmet, a leading supplier in the paper industry, known for its cutting-edge machine technology. Valmet has previously developed a fine paper machine for our mill, which proved to be highly efficient with no operational issues.
Ittihad group previously entered into a long-term service cooperation agreement with Valmet in March 2018. This agreement outlines comprehensive support for IPM and CPM, including production assistance, productivity optimization, and maintenance management. Valmet has also supplied and optimized spare parts, along with essential components and consumables for the paper machines. This strategic partnership is designed to enhance efficiency and overall performance within IPM and CPM, solidifying its position in the paper and tissue paper industry.
Watch: In Pursuit of Lesser Water Footprint
PM: Can you provide an overview of the current scenario of the pulp & paper industry and the recent trends?
AAK: The tissue paper business is growing despite the current economic slowdown. We are facing some challenges from the Far East, but overall, the tissue paper market is growing and is expected to continue its growth in the long term.
With rising logistics issues, our shipping costs have also increased substantially, affecting our profit margins. This is largely driven by the broader economic slowdown.
Additionally, the rise in shipping costs has impacted pulp prices, which have dropped sharply over the past two to three weeks, leading to market instability. Consequently, many are refraining from purchasing or stocking paper, anticipating further price declines. I believe this pressure on the paper and pulp markets will persist until the end of the year. As a paper mill, we are also closely monitoring market developments in China and the Far East.
PM: Discuss about your market footprint for both the tissue paper and other paper businesses? What percentage of your total quantities is allocated to different markets?
AAK: To meet the growing demand, we are expanding our tissue paper production capacity. Currently, our major products are exported from the UAE to around 60 countries worldwide.
Around 90 percent of the paper produced by Ittihad Paper Mill is exported outside the UAE, with the primary markets being Egypt, North Africa, the Gulf countries, and the United States. For Crown Paper Mill, around 70 percent of its production is shipped abroad. The key markets for the Crown Paper Mill are Gulf countries and the Middle East. These regions represent the majority of markets for both mills.
Also Read: Chandpur Paper: Advancing Excellence with State-of-the-Art Machinery
PM: How do you personally perceive the future of the paper industry?
AAK: The industry is indeed challenging but I remain very optimistic about it. Despite the difficulties, I believe it is one of the most rewarding industries. Having worked in this field for 34 years, I’ve witnessed many ups and downs. However, I find great satisfaction in knowing that we are adding value to our customers.
Currently, there is significant pressure on the pulp market, primarily because China has reduced its purchases, leading to a dramatic drop in prices. However, I don’t anticipate this trend will persist beyond this year. I expect that by the middle of next year, prices will stabilize and return to normal levels.
The paper and tissue industry continues to grow, regardless of technological advancements and automation. I firmly believe that paper and tissue paper products will always have a place in the market.
PM: What are your views on the current environmental measures being implemented in the paper industry?
AAK: In our paper mill operations, we are committed to implementing environmentally friendly practices to reduce water and energy consumption. Currently, we are adding an effluent treatment system to our paper mill to enhance water recycling and minimize the use of freshwater. We expect this new phase to be operational by the end of the year.
As a group within the paper industry at large, we are continuously focusing on environmental issues, recycling efforts, and cost minimization.
