Manufacturing Company: Comprehensive Analysis of Stocks and the Saudi

The National Manufacturing Company was established in 1985 as a strategic step to support the industrial transformation that Saudi Arabia witnessed in the last decades of the 20th century. The main goal of its establishment was to enhance the contribution of the private sector to national development, especially in the fields of manufacturing and metals. The company's headquarters is located in the Jubail Industrial City, which is the heart of heavy industry in the Kingdom, near oil and gas sources and advanced infrastructure. Over the past decades, the Manufacturing Company has evolved from a company focused on a limited number of products to a large industrial conglomerate that includes several subsidiaries and branches specialized in petrochemicals, metals, building materials, and industrial catalysts. The company has played a leading role in introducing new manufacturing technologies to the Kingdom, in addition to establishing partnerships with national and global entities to transfer and localize industrial knowledge. Its listing on the Saudi financial market (Tadawul) under the symbol 2060 is a milestone in its history, allowing it to access a broader base of investors and support its expansion plans.

The Manufacturing Company relies on an integrated organizational structure that reflects the size of its operations and the diversity of its activities. The board of directors consists of experienced members in industrial and investment fields, including representatives from government funds and strategic investors. The board has supervisory authority over general policies and strategic directions, while the executive management team, led by the CEO, implements operational plans and manages resources. The company includes several subsidiaries and specialized branches, the most prominent of which are metal manufacturing companies, cement production, and chemical processing. Management focuses on developing internal competencies, adopting a culture of innovation, and enhancing commitment to governance and transparency, which has contributed to maintaining the company's position among the top tier in the Saudi market.

The National Manufacturing Company covers a wide range of industrial activities. In the petrochemical sector, the company produces basic materials used in the plastic and advanced chemical industries. In the metals field, it manufactures steel pipes, aluminum alloys, metal structures, and industrial castings that serve the oil, gas, and construction sectors. Additionally, the company contributes to the production of building materials through its subsidiaries in the cement sector. It also develops advanced technical solutions for chemical catalysts and liquefied gas filling, enhancing its ability to meet the needs of various local and regional industries. These activities illustrate the diversity of the company's revenue sources and its ability to adapt to changes in demand across different sectors.

The Saudi industrial sector is one of the fastest-growing sectors in the region, driven by the Kingdom's Vision 2030, which aims to diversify the economy and reduce dependence on oil as the sole source of income. Companies like the National Manufacturing Company play a pivotal role in implementing this vision by supporting industrial infrastructure, providing essential materials for major national projects such as NEOM, the Red Sea, and developing local production lines. The sector primarily relies on the availability of energy sources and raw materials, in addition to adopting modern technologies and innovation to enhance efficiency and reduce costs. Industrial companies face challenges related to fluctuations in raw material prices, regional and international competition, and compliance with new environmental standards. In this context, the Manufacturing Company stands out as a key player due to its expertise, strategic partnerships, and product diversity.

Recent financial data indicates that the Manufacturing Company maintained relative stability in its financial performance during 2024 and 2025. The stock price ranged between 9 and 10 Saudi Riyals, with a market value of approximately 12.5 billion Riyals. The company achieved annual operating revenues between 6.0 and 6.5 billion Riyals, with a net profit ranging between 100 and 150 million Riyals, reflecting a modest net profit margin (2-2.5%). The price-to-earnings ratio (P/E) was around 60-65 times, which is relatively high due to the low earnings per share compared to its price, reflecting the challenges the company faces in raising profit margins. The company has not announced significant dividends in recent years, preferring to reinvest profits into operational activities and reduce debt. Shareholders' equity reached 3.7 billion Riyals, while liabilities amounted to 4.5 billion Riyals, with an average financial leverage ratio. The return on equity (ROE) was 4%, and the return on assets (ROA) was 1.5%. These indicators reflect a stable financial position, but ongoing efforts are required to increase profitability and improve operational efficiency.

The Manufacturing Company faces strong competition from local and regional companies. Locally, it competes with 'Maaden' in the metals and mining sector, and with cement companies such as Saudi Cement and Hail Cement in the building materials sector. In the petrochemical field, SABIC is a major competitor due to its massive production capabilities and global presence. At the regional and international levels, the company faces competition from Gulf and global companies in petrochemicals, metals, and industrial catalysts, such as BASF and Clariant. This ongoing competition requires investment in research and development, improving operational efficiency, and adopting the latest industrial technologies.

The Manufacturing Company's strategy aligns with the objectives of the Kingdom's Vision 2030, which encourages the development of local industries with high added value. The company contributes to achieving this vision by localizing chemical and mineral industries, developing new production lines, and supporting national infrastructure projects. It also engages in partnerships with government and private entities and participates in renewable energy projects and technological innovations. This role enhances the company's position as a key driver of industrial development in the Kingdom and supports its ability to face future economic challenges.

The National Manufacturing Company witnessed several significant developments during 2024 and 2025, including achieving a record net profit in the fourth quarter of 2024 and signing strategic agreements to expand production lines and update technologies in collaboration with global companies. The company issued short-term bonds to enhance liquidity and worked on restructuring debts to improve its financial position. It entered into research partnerships with local universities to develop advanced manufacturing technologies and announced plans to invest in renewable energy projects to reduce operating costs. These initiatives reflect the company's ongoing efforts to enhance its competitiveness and expand its business scope.

The Manufacturing Company has followed a conservative dividend distribution policy in recent years, preferring to reinvest profits in developing production lines and repaying debts. No significant cash dividends were announced for 2023, while distributions for 2022 were only about 3% of the stock value. This policy reflects the management's commitment to strengthening the long-term financial position and achieving sustainable growth. Future dividend distribution decisions will depend on improving profit margins and operating cash flows, as well as the approval of the general assembly of shareholders.

The Manufacturing Company faces several risks, the most prominent of which are fluctuations in oil and gas prices that directly affect production costs and profit margins. Additionally, intense competition in both local and international sectors puts pressure on prices and profitability. The company's performance also depends on domestic and global demand for petrochemical and metal products, as well as compliance with environmental standards and regulatory legislation. The company may also face challenges in managing debts and achieving sustainable profit growth, which are factors investors should consider when evaluating the stock.

The Manufacturing Company places significant importance on innovation and sustainability. The company has launched several initiatives to adopt smart manufacturing technologies, improve energy consumption efficiency, and use renewable energy sources in its factories. It is also working on developing new materials with high added value and participating in projects to reduce carbon emissions in collaboration with local and international partners. The company aims to achieve a balance between economic growth and environmental protection, in line with global trends in social responsibility and environmental sustainability.

The Manufacturing Company relies on a wide network of partnerships and alliances with global and local companies to enhance its manufacturing and technical capabilities. These partnerships include the exchange of technical licenses, updating production lines, and developing innovative industrial solutions in collaboration with research institutions and Saudi universities. These alliances have contributed to knowledge transfer, improving operational efficiency, and expanding targeted markets, supporting the company's ability to face challenges and meet customer requirements in local and international markets.

The Saudi industrial sector is expected to continue growing in the coming years, driven by major national projects and the state's direction towards localizing industries. For the Manufacturing Company, continuing to develop products, invest in innovation, and improve operational efficiency will remain critical elements in maintaining its competitiveness. Participation in renewable energy projects and the development of smart industrial solutions may open new avenues for growth and achieving higher profit margins. However, the company still needs to address market volatility challenges and ensure sustainable profits in the future.