Plant produced corrugated packaging for fruit and vegetable exports and supplied major clients such as Tesco and Metro
Saudi packaging group Obeikan is shutting down its corrugated packaging plant, Obeikan MDF, in Sagunto, near Valencia, Spain.
The closure of the site affects more than 100 employees, according to a statement by trade union CCOO del Hàbitat del País Valencià.
Managing director Salvador Martínez told Fruitnet: “Obeikan Investment Group has carried out a strategic reorganisation of its business portfolio and has decided to divest from some companies in the packaging segment that were much less profitable than other investment opportunities the group is currently focusing on, such as lithium refining, aluminium production, and strengthening the rapidly growing Digital Transformation Division. We were one of those companies.”
He said Obeikan MDF would carry out a gradual and orderly wind-down of our business, which will conclude by the end of 2025.
Martínez explained that the company will pay severance pay of 25 days per year worked, capped at 18 monthly payments. This represents a 50-60 per cent increase over the legal minimum to facilitate an appropriate exit for our employees. He further noted that Obeikan will finance the special agreement with Social Security for those over 55 years of age and a relocation plan for all employees.
“This demonstrates the professionalism and responsibility of the Obeikan Group, which, rather than opting for bankruptcy, has chosen to carry out an orderly exit,” he said.
According to reports in the Spanish press, the Valencia plant – which once employed up to 175 people – had seen its workforce reduced in recent years. The plant primarily produced corrugated packaging for fruit and vegetable exports and supplied major clients such as Tesco and Metro. Obeikan’s Spanish subsidiary reportedly accumulated more than €7m in losses between 2022 and 2023.
On 31 July, the company released a statement saying: “Following the dialogue process, representatives of the company Obeikan and the workers’ legal representatives have reached an agreement within the framework of the Employment Regulation File, the content of which reflects the negotiating effort, responsibility, and genuine desire to find fair and sustainable solutions for all parties,” Obeikan said in a statement.
“Over the past few weeks, both parties have negotiated with a view to reducing the impact of the process on the workers affected by the closure.
“Both parties believe that the content of the preliminary agreement represents a reasonable balance, in a context marked by economic difficulties that have required responsibility, dialogue, and broad-mindedness.
“The company’s social representatives and management wish to publicly thank everyone involved in these negotiations, as well as their willingness to build consensus in such a complex scenario. In that same spirit, both parties commit to continue working within a framework of respect, transparency, and support for those affected.”
