Report on the company's strategic expansion projects

Al Watania for Industry continues to implement a series of new expansion projects. This
is based on its seeking to provide the best to its customers, continuing to achieve its
goals and strategic plans aimed at enhancing its competitiveness in the market,
achieving a strong position in the packaging sector in the Middle East and North Africa
region, and contributing to the industrial development in the Kingdom by providing the
Saudi market with the best alternatives to local and imported products. Taking into
account not to compromise the level of quality and services. In this report, we present
an overview of the most important completed expansion projects and projects under
implementation.

Completed expansion projects:

- Launching a production line for tuna and sardines.
His Excellency the Chairman of the Board of Directors, Mr. Fahd bin Sulaiman Al-
Rajhi, inaugurated in December 2020 the production line for tuna and sardine cans
at Al Watania Containers Industry Factory in Jeddah. The launching was in the
presence of His Excellency the Chief Executive Officer Eng. Ibrahim Buhairi, the
Executive Vice President of the Manufacturing Sector Eng. Abdul Rahman Al-Jaid,
the Vice President for Sales Marketing Mr. Muhammad Juma Bakr and the General
Director of the Containers Factories is Eng. Hamdan Al-Harbi, and the factory
management. His Excellency listened to an explanation about the project. Then he
cut the tape and give the signal to start the experimental production of the line that
was successfully installed during the Covid-19 pandemic with Al Watania Technical
Industry cadres and remote support and supervision of suppliers.
This project aims to expand the packaging products that serve the food sector and
meet the needs of customers in the neighboring markets where tuna and sardines
are widely produced, such as Arab Maghreb countries, Yemen, Jordan, Oman and
others. The production capacity of the line is 662,000 cans per day, equivalent to
producing 17 million boxes per month. The line was purchased from the best
European companies, namely Naruska-German and Clevertech-Italy. They were
chosen according to the highest standards of quality, performance and technology.
The production line is characterized by using the automatic robot technology to
collect, stack and package the cans automatically. The tuna cans with a diameter of
83 and a height (43 - 40 - 38) are produced, in addition to sardine one-size cans.
 - Completion of the expansion of the petrochemical product packaging bag
manufacturing line.

On the other hand, the supply and installation of industrial film production lines
has been completed. This project is one of the most important projects in the
plastic factory to meet the needs of the market. Tt goes well with the company's
policies aimed at using the latest manufacturing machines to provide the best
packaging means to its customers by reducing thickness, weight and thus
minimizing the environmental impact. An integrated line with printing was
purchased to produce petrochemical packaging bags from (W&H - Germany)
company, which is known internationally for the quality of its industrial
technologies. The new expansion aims to add approximately 2,200 tons of
industrial film bags used for packing petrochemical products, as production
began successfully in November 2020.

- The operation of the bag manufacturing line was completed (poultry bags,
shopping bags, etc.)
The supply and installation of a multi-function bag sealing cutting machine have
been completed. The project aims to raise the production capacity of the plastic
factory from bag products (chicken, shopping, etc.). The machine was purchased
from (Lemo - German) company. The line was launched and the production
process was begun in June 2020.

Expansion projects under construction:

- Establishing Al Watania Gulf Paper Products Factory

Al Watania Gulf Paper Products Factory is the first factory for the production of paper
egg trays in the Sultanate of Oman, with an area of 10 thousand square meters. It is the
first investment for Al Watania industry in the Sultanate. The project was entered into in
a strategic partnership with Mabela Gate United from the Sultanate of Oman, with a
percentage of 80% for (Al Watania for Industry) and 20% for the Omani company. The
ceremony for signing the partnership contract and land allocation took place in
December of 2019, in the presence of officials from both parties.
Khazaen Economic City was chosen as the incubator for the factory due to the
importance of its strategic location that is close to international shipping lines. This
project aims to produce 35 million pieces to cover the market needs of egg trays
annually in addition to exporting to neighboring countries.
Currently, engineering designs have been completed and the required licenses have
been obtained to start the construction phase. The manufacturing of production lines at
the approved machinery suppliers has also been completed. The construction process
will start during the first quarter of 2021, and production will start at the beginning of the
third quarter of the same year.

- PET product lines project in the plastic factory

Mindful of the importance of keeping abreastof developments in the food-packaging
sector and the modern trend of using PET products for ease of formation, breadth of
uses and suitability to display food products in an attractive manner, a project has been
started to produce various types of single-use products to meet market demand. The
contract for the supply of lines was awarded to (ILLIG - Germany), a leading global
supplier of thermoforming machines and plastic molding systems. This project includes
the installation of two production lines and the formation of PET material with molds
supported by the production line of rolls from the German company (BREYER). It is
expected to start the trial operations of this project in the first quarter of 2021.

- Project to update the flexible film production line in the plastic factory
The project aims to replace the previous production line for industrial film products that
used the rotogravure printing technology, to a new production line that uses newer
printing technology that meets the needs and desires of customers with lower operating
cost, higher efficiency and lower environmental impact. The contract for the supply of CI
Flexo printing line capable of printing ten colors was awarded to (BOBST - Germany). It
is planned to start trial operations for this project in the second quarter of 2021.
The development of the industrial sector in the Kingdom in 2020

Monitor the achievements of the industry sector in the Kingdom during the year
2020

The industrial sector in the Kingdom of Saudi Arabia is receiving great attention and
great care by our wise leaderships (may God protect them). Based on the prominent
development steps brought by the Kingdom's Vision 2030, which calls for reliance on
new and innovative ways and non-oil economic resources to reduce the size of the
economic dependence on oil as a main source of the Saudi economy. Therefore, new
economic ambitions can be built and achieved aiming for a qualitative shift in the Saudi
economy.
This has prompted those responsible for the industrial sector in the Kingdom to pump a
lot of investments and projects to work on establishing new economic projects. These
projects include petrochemicals, manufacturing industries, building and construction,
technical and consumer industries, in addition to launching the "National Industry and
Logistics Program Development " as one of the most prominent endeavors of the Vision
2030 to make the Kingdom one of the leaders of the global industry.
There were many economic achievements in the field of industry in particular in the
Kingdom in spite of the many challenges and obstacles that the industry sector faced in
Saudi Arabia in particular and the world in general during 2020 as a result of
implementing precautionary measures against the Covid-19 pandemic and its negative
economic consequences affecting the economy of several countries.
Among these achievements, the Saudi Ministry of Industry and Mineral Resources
issued a number of industrial licenses to establish new factories, which amounted to
903 licenses, with an investment of approximately 23.5 billion Saudi riyals. The year
2020 witnessed the start of production in 515 new factories, which greatly contributed to
the success of the localization plans. This created nearly 39,000 new jobs, with a rate of
37% for localization.
In pursuit of the Kingdom and its wise government to support the industrial sector, it has
exempted investors in small enterprises from fees for work licenses that include
expatriate workers in industrial establishments for a period of five years, which led to an
remarkable growth in the industrial sector in the Kingdom.
In order to meet those aspirations of the Saudi Vision 2030 to diversify the sources of
national income and develop these non-oil industrial fields, the Saudi Export Authority
decided that the Saudi Import and Export Bank launch a comprehensive set of direct
and indirect financing services. They include supporting the exporters during export
operations that they are unable to do because their ability to finance is weak and
importers who feel the need to increase their financing. This step had an effective
positive effect on the volume of Saudi exports, as well as contributed to overcoming the
obstacles facing the export process in general.
The obstacles in that year constituted a great challenge for the Saudi industry. They
revealed the concerted efforts of the Kingdom's wise government and industry leaders
in the public and private sector, all of which had been exerted in order to catch up with
the economic development race and work to develop the Saudi industry, making it a
strong global competitor to leading industrial countries. With the attainment of a lofty
goal, which is achieving self-sufficiency in basic materials instead of importing them
from other countries.
In spite of what happened in the year 2020, The Kingdom witnessed many economic
and industrial developments, so we had to list them with pride in our government and its
comprehensive development plan.