A recent expansion has made Arab Paper Manufacturing Co Limited, popularly known as Waraq, the region’s largest producer of kraft paper.

The company installed its second unit last October, raising total capacity to 190,000 tonnes per year (tpy) including 70,000 tpy from the first mill.
It is currently producing at full capacity, says sales and marketing manager Atul Kaul.
The new facility was imported from Allimand, France, and is a twin-wire equipment capable of making paper from 90-300 GSM. Kadant/Lamort of France supplied the stock preparation and approach flow systems. Waraq describes the 5 m machine as being capable of delivering a world-class product and contributing about 120,000 tpy of recycled and semi-kraft paper and several value-added grades.
It joins the first unit, which is a rebuilt, thoroughly refurbished Valmet machine. The stock preparation and approach flow system are brand new and the plant boasts a process automation and computerised control system. It has a finished trim of 4.2 m and produces about 70,000 tpy of recycled kraft paper in the range of 90 to 200 GSM. 
Promoted by a group of 50 Saudi investors, Waraq started commercial production at the end of 1995. From a mere 30,000 tpy in 1996, the volume reached 70,000 tpy by 2001. The company’s corporate office and mills are located in Dammam’s Second Industrial City.
“Waraq was the first kraft paper mill in Saudi Arabia and the largest in the GCC region, a distinction it enjoys even today after the commissioning of its second paper machine,” said Kaul.
“Today with an aggregated installed production capacity of nearly 200,000 tpy, Waraq remains the biggest Kraft producer in the region.” Chairman of the company is prominent Saudi businessman Shaikh Saad Mohammed Almoajil.
Waraq’s first unit produces fluting, testliner and unbleached coreboard. Fluting forms the inside corrugated layer of a typical corrugated board. It provides the basic form to the sheet and acts like a shock absorber whereas testliner is the inner layer of paper to provide dimension, stability and strength to the corrugated board.
“Due to the clean surface and excellent texture of Waraq’s testliner, from early on it has been used as an outside liner, a position enjoyed only by virgin kraft liners,” said Kaul.
Coreboard is converted into cores, bobbins and paper tubes for numerous applications in the industrial sector.
The second unit produces the existing grades as well as new value-added grades such as whitetop testliner, whitetop kraftliner and kraftliner.
Most of the production is consumed within Saudi Arabia itself, says Kaul, but the new capacity means the company can look to supplying additional markets overseas.
“From exports of a mere 15 per cent of total output in the early days, Waraq’s overseas sales today average 30 per cent and we plan to grow that to 50 per cent.
“This is necessary to negate the buildup of excessive tonnage in the region, which is a result of expansions by its co-producers,” observes Kaul. The company exports to the Middle East, Africa and Southeast Asia. Kaul says the company is developing key alliances in the Far East, Europe and the Americas as a second line following the commissioning of the second unit. He believes the scope and prospects for exports are high.
“Waraq sells all its produce to strategic long-term business partners. All major consumers in the GCC are our clients,” he remarks. The company has also supplied to markets such as India and Pakistan, which are themselves producers of similar grades of paper. “This was achieved by a focused approach to presenting a globally competitive and qualitative product in the international market,” comments Kaul.
Revenues have been growing with as much as SR126 million ($33.5 million) realised in 2004, against SR85 million in 2003 and SR84 million in the previous year.  “In 2005 we expect a strong financial result despite the fact that global competition as well as new capacities in the region will flourish,” says Kaul.
“Domestic demand is affected by the growth in population, industry, trading and services. The average growth in the corrugated industry is rated to be 7 per cent annually. Waraq has contributed towards reducing imports, saving foreign exchange, improving the balance of payment, providing job opportunities for the local people, developing and promoting waste paper technology and protecting the environment.
“The enhancement of capacity as well as the product range will ensure that Waraq maintains its frontline presence in the highly competitive global marketplace.”
The company is conscious about environmental issues and is constantly researching ways to keep its processes as eco-friendly as possible, says Kaul.
“Continuously striving for innovative developments in technology, Waraq keeps vigil to stay abreast of technological developments in the industry and tries to adapt and implement applicable solutions to enhance the quality and quantity of output.
“In line with the company’s philosophy to operate with integrity and commitment towards its customers, a most modern quality control laboratory is in operation, ensuring that each reel that leaves the factory is in full conformity to preset technical parameters, which are amongst the highest in the industry for similar products.
“Strict controls exercised from the raw material stage to the final reeling of the finished product ensures a consistent quality to end users.”
As raw material, Waraq uses old corrugated cartons (OCCs) and new double-lined kraft clippings (NDLKCs), both of which are sourced in the domestic market. They are collected by Waraq’s collection centres established in Dammam, Riyadh and Jeddah. The collection centres are responsible for sourcing, screening and processing the waste paper received before baling and dispatching it to the mill.
Additionally, with the installation of the second unit, bleached and unbleached virgin kraft pulp is sourced in overseas markets, mainly Europe and the Americas.
On the issues that the company faces, Kaul says: “The paper industry, like any other industry, has to face challenges, especially of demand and supply. There is regional as well as global competition and Waraq has to compete with producers from all over the world who find the Middle East a favourite dumping ground to liquidate their excess production and protect domestic prices in their home markets.
“Inspite of the many challenges faced by the industry, the trends and prospects are positive both for the long and short terms.”
Kaul says the packaging industry is maintaining a healthy growth and growing environmental concerns are forcing producers to adopt eco-friendly techniques to package their products. “Plastics are on a down trend and paper packaging is growing. The open trade between GCC countries is definitely an advantage, but if a monitoring cell could be established by their governments to study the impact of uncontrolled dumping on local producers, and if it reacts immediately to that threat, we might get some respite from the seasonal dumping practiced by overseas producers, mainly from the West.”
The region’s capacity is set to increase with other producers expanding. At least two other projects are under expansion and other expansions are in the pipeline. The increase in consumption by mills has led to an increased demand for wastepaper. Traders currently export a sizable volume of wastepaper generated within the kingdom to foreign markets, which Kaul regrets, saying “this way we lose both quality fibre and a precious resource.” In times to come, he observes, these volumes would be required by the domestic paper industry to ensure the consistency of their product quality. He advocates government control over what he describes as “endless exports” of wastepaper. “Waraq is sponsoring various programmes which assist in the organised collection and usage of wastepaper. Financial assistance is also extended to deserving people to make them self-reliant,” he says.