The Future of Packaging in the Middle East & North Africa to 2019

Rising real incomes, continued urbanisation and a relatively young and growing population make the Middle East and North Africa a target market for the packaging industry. Smithers Pira has published a major new market study – The Future of Packaging in the Middle East & North Africa to 2019 – to provide an up-to-date view of the current market for anyone involved in or looking to enter this lucrative market.

Smithers Pira is the worldwide authority on packaging, paper and print industry supply chains. Established in 1930, Smithers Pira provides strategic and technical consulting, testing, intelligence and events to help clients gain market insights, identify opportunities, evaluate product performance and manage compliance. Smithers Pira works with packaging suppliers to identify profitable growth opportunities.

The Future of Packaging in the Middle East & North Africa to 2019 report

Smithers Pira has published the report ‘The Future of Packaging in the Middle East & North Africa to 2019’. The report is based on an in-depth combination of primary and secondary data. Primary research included structured in-depth telephone and follow-up interviews with leading players in the MENA value chain, including a select group of end users. Secondary research consisted of multiple sources such as financial reports of publicly held companies participating in the industry, websites of key industry suppliers, proceedings of packaging conferences, industry publications, various technology forecasts and global economic projections. In addition, the data and insight in the study includes valuable information gleaned from key industry conventions/exhibits related to MENA’s packaging industry.

The report by Smithers Pira examines Middle East and North African (MENA) packaging markets for the period 2009-14 and presents forecasts for the five-year period covering 2014-19. Market value forecasts are presented by packaging product, end-use sector and twelve national markets. In addition, the report includes an analysis of market drivers and trends, industry structure and major market participants.

The broad MENA packaging market

The MENA packaging market is valued at approximately US$41.1 billion in 2014 and is forecast to grow during the period 2014-19 at a CAGR of 5.0% to US$52.4 billion (2013 prices). This represents a higher growth rate than the global packaging market, which is forecast to grow at just over 4% during the same period. Packaging demand is being driven by higher economic activity and rising real incomes, urbanisation, a relatively young and growing population and the further development of retail infrastructure in several MENA countries.

There are significant differences in these factors across the countries of the Middle East & North Africa considered in this report. Additionally, political instability in the region will have some affects. Since 2011, the Middle East and North Africa has been the centre of revolutionary pro-democracy movements, starting in Tunisia and Egypt, and spreading across the region. The unrest in the region, together with adverse economic conditions in global markets, has negatively affected development of the packaging industry in some countries. However, despite the political instability, the regional economy is expected to grow.

Middle East & North Africa: packaging market value, 2009, 2013, 2014 and 2019 forecast, (US$ million)

Key drivers and trends

There are various key drivers and trends that are likely to impact the the Middle East & North Africa packaging markets to 2019; these are economic, demographic, political, packaging and retail. Firstly it is expected that there will be a largely positive impact on packaging demand from rising economic activity and growing incomes per capita, but there are wide variations between countries; in addition, there is a major threat to economic growth from political instability in the region. In terms of demographics, a high proportion of young people and a growing population is a major driver of packaging demand. Politics is expected to likely impact the Middle East & North Africa packaging markets to 2019; struggles for freedom continue across the Middle East and North Africa, but several countries faced worsening violence as anti-democratic forces asserted themselves. The Middle East and North Africa as a whole have the worst civil liberties of any region. Worsening geo-political violence could be major restraint on economic development, and hence packaging demand, during the forecast period. In terms of packaging trends, packaging sales are supported by increased investment in food production and processing, significant investments in new flexible packaging converting capacity and increased availability of locally produced and competitively-priced base substrates. Lastly, the retail trend is likely to impact the packaging market in this region to 2019, as packaging demand benefits from the development of a retail infrastructure and growing penetration of pre-packed foods. Hypermarkets/supermarkets are gaining market share, though small and local artisan stores still dominate in most MENA countries

A closer look at the MENA packaging market

Middle Eastern countries account for a projected share of almost three-quarters of total packaging sales in the Middle East & North Africa (MENA) region in 2014. North Africa has however showed a slightly higher growth rate for packaging consumption during the 2009-14 review period. Middle Eastern countries grew packaging sales during the five-year period to 2014 at a CAGR of 6.3% with North Africa growing at a CAGR of 6.9%. MENA regional packaging market growth was severely restrained during this period by war and civil unrest in several countries including Syria, Iraq, Libya, Tunisia and Egypt.

A closer look at the MENA packaging market: by country

Turkey is the largest packaging market in the MENA region accounting for a projected 22.1% share of total market value in 2014. Saudi Arabia is second largest packaging market, followed by Iran and Egypt. Libya is a relatively under-developed packaging market, but is predicted to grow packaging consumption at the highest rate, provided that the current civil unrest in the country does not persist for a prolonged period of time. Qatar, Morocco, Saudi Arabia and the UAE are also forecast to grow at a rate faster than the market average. The relatively more developed packaging markets of, Kuwait and Turkey are expected to grow packaging sales at rates lower than the regional market average. Iran still faces economic sanctions which are restraining economic growth and packaging market sales. There are however hopes that Western nations will gradually lift some sanctions during 2014 and 2015, which should drive higher packaging sales. ‘Other Middle Eastern’ countries are likely to be restrained by further declines in Iran and Syria packaging consumption as a result of the ongoing civil unrest in these countries.

A closer look at the MENA packaging market: by packaging product

Rigid plastics form the largest packaging product group accounting for a projected market value share of 28.2% for 2014. Board packaging is the second most important category with 25.6% of consumption, followed by flexible plastics with a 12.9% share. Rigid plastics and flexible plastic packaging have increased their market share during the review period. Rigid plastics and flexible plastics are predicted to grow at the fastest rates during the forecast period. Plastic packaging is gradually replacing glass bottles, metal cans and paper and board packaging in the MENA and other world region because of its lighter weight, cost saving potential and greater design flexibility.

A closer look at the MENA packaging market: by end use sector

Food represents the largest end use sector for packaging products accounting for a projected 33.8% market value share in 2014. Industrial/bulk is the second largest sector with 26.4%, followed by beverage markets with 25.2%. Food and beverage packaging represents a much higher proportion of overall packaging demand for the developing countries of the MENA region compared with the world packaging market. Food and beverages in the world packaging market account for just over 40.0% of sales, while in MENA region they represent almost 59.0% of packaging sales. Similarly, healthcare packaging sales account for just 2.9% of MENA packaging sales compared with 4.0% for the world packaging market as a whole. The industrial/bulk sector also represents a much lower proportion of MENA packaging sales compared with the world market; 26.4% versus 40.0%. Food and drink packaging sales are predicted to grow their market share further over the forecast period with industrial/bulk also growing steadily. The healthcare sector is however expected to show the fastest growth.

REPORT CONTENTS

Overview of key drivers and trends, structure of the market supply chain by region and packaging product.

Country profiles:
Iran, Israel, Kuwait, Qatar, Saudi Arabia, Turkey, United Arab Emirates (UAE), Algeria, Egypt, Libya, Morocco, Tunisia

8 end use markets:
Food, Beverages, Healthcare, Medical devices, Prescription and OTC drugs, Cosmetics (incl. Colourants and shampoos, Perfumes, Deodorants, Soaps, Toothpaste), Other consumer goods (incl. Tobacco, Household, chemicals, soap & detergents, Paper products, Hardware and electrical goods, Glassware and ceramics), Industrial/bulk products (incl. Chemicals, oil and oil derivatives, Minerals)

6 packaging products:
Flexible packaging (incl. Flexible plastics, Flexible foil, Flexible paper), Board, Metal, Rigid plastic, Glass, Other packaging

Contents:
Forecast range: 2014-2019
Historical data: 2009-2013
190+ original tables and figures clearly showing global market forecasts

HOW CAN YOU PURCHASE THE REPORT?

The Future of Packaging in the Middle East & North Africa to 2019 is available now for £3,950. Readers of ME Printer Magazine receive a special 15% discount if ordering before September 30th 2014.

To claim your special discount, please call Bill Allen on +44 (0)1372 802086 or email ballen@smithers.com

Smithers Pira is the worldwide authority on the Packaging, Paper and Print industry supply chains.

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