Stronger demand expected from regional markets has prompted a plastic firm of the Alrajhi Industrial Group to initiate an expansion of its unplasticised polyvinyl chrloride (uPVC) pipe production capacity.

Alrajhi Foam and Plastic Factory Company Ltd will begin work by the end of this year or early 2012 on a new uPVC line at its Riyadh plant to raise the current output capability of those pipes by 10 to 15 per cent from the current level of 15,000 to 20,000 tonnes annually.

uPVC pipes account for 45 per cent of the company’s sales, said its sales and marketing manager Amer A Alardhi. As well as this product, the company makes electric hoses, polyethylene pipes, greenhouse film, crates, stretch film, shrink film, bags and other things. Total capacity is 24,000 tonnes while actual production in 2010 was 19,000 tonnes against 17,000 tonnes in the previous year. The company expects to produce more than 22,000 tonnes this year.

The company follows high standards in production and quality control in line with the requirements of ISO 9001, said Alardhi.

While Alrajhi Foam and Plastic Factory is preparing for a surge in demand in the Gulf states, it is currently busy meeting requirements from a very substantial increase in Saudi projects. Alardhi says the recent global economic recession had thankfully a low impact on the Gulf states, particularly Saudi Arabia, because of government support and government projects. As much as 75 per cent of Alrajhi Foam and Plastic Factory’s business is linked to contracting and infrastructure, he highlights.

uPVC pipes manufactured by Alrajhi and ready for delivery

The company’s current overseas markets are Qatar, Iraq and Yemen. Additional capacity planned for the near future will see more volumes of uPVC pipes going outside Saudi Arabia. Alardhi says the company’s growth strategy is to invest from time to time to cover requirements in current markets and enter new markets. A challenge the company is confronting now is 'rapid development in the plastic market.' Alrajhi Foam and Plastic Factory sources its raw material from large firms within the Gulf including Sabic, Qapco, Borouge, Harco and Petro Rabigh.

The company’s sales graph has grown uninterruptedly. In 2010, it registered total sales of SR98 million ($26.1 million) against SR85 million in the previous year. Exports have moved up from SR20 million in 2009 to SR 35 million in 2010.

The company continued its growth streak in the first quarter of this year, reporting more than SR30 million in total sales and exports of over SR8 million.

The shareholders of Alrajhi Foam and Plastic Factory are Sheikh Abdullah Abdulaziz Alrajhi and his sons.