The boom in e-commerce platforms and change in consumer preferences towards sustainable solutions is seeing an exponential growth in the share of paper packaging in the $74 billion overall packaging market in the Middle East and Africa region.
Investments in kraft paper mills in the region is on the rise in the post-pandemic era, with enhanced use of paper packaging across industry verticals such as catering, cosmetics, food, hygiene, and pharma driving up demand.
Majid Rasheed, Managing Director of Abu Dhabi-based tissue paper manufacturer Star Paper Mill, says, “E-commerce continues to be on an upsurge in the GCC and larger MEA markets, and this has in turn catalysed the demand for packaging solutions across the board. The overall regional e-commerce market may exceed $25 billion within the next couple of years. This will obviously fuel the need for paper packaging solutions, and the paper industry with its sustainable and alternative propositions stand to gain.”
Data Bridge Market Research reports that kraft paper will continue to gain market share, growing to over $54 million in the UAE alone at a CAGR of 3.8% for the forecast period 2020-2028.
Anticipating increased demand in this sector, Star Paper Mill announced investments in the kraft paper segment, including an investment of over $54 million in collaboration with RC Paper Machines, in Khalifa Economic Zones Abu Dhabi (KEZAD Group) to manufacture recycled kraft paper jumbo reels to be used in producing corrugated cartons and high in demand, 100% eco-friendly biodegradable bag papers out of recycled raw materials. Oman-based paperboard manufacturer Keryas Paper Industry is another company that has joined the bandwagon, announcing a $40 million investment plan to establish a 2,00,000 metric tonnes per annum kraft liner project in the UAE that aims to bridge the gap in the market for the lower GSM ranges.
Keryas Paper Industry’s Chairman Abdullah Omar Ali Al Hosni, elaborates, “The growth in paper food packaging which surged during and after the pandemic continues to create growth for paper players in the MEA markets, and specifically in the GCC, which has the world’s highest Internet users, aiding online commerce. The volume of opportunity has also grown considerably with verticals like cosmetics, personal care, and pharma taking to paper packaging solutions in a big way riding the e-commerce boom.”
A Mordor Intelligence report has confirmed the growth trend in B2B and B2C paper packaging solutions at an estimated CAGR of 4.3% in the Middle East and Africa region from 2023 to 2028.
