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Packaging Industry in Saudi Arabia - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 110 Pages
  • February 2021
  • Region: Saudi Arabia
  • Mordor Intelligence
  • ID: 4774952
UP TO OFF until Sep 30th 2023
The packaging industry in Saudi Arabia (also referred to as ‘the Saudi Arabia packaging market’) is expected to register a CAGR of 2.2% over the forecast period, 2021 - 2026. Packaging, especially plastic, has changed the ways in which the packaging industry functioned. Packaging solutions that are lightweight, durable, and comfortable to the users are some of the factors which have increased the use of plastics as a packaging material across the world.
  • The moderately growing packaging market is primarily influenced by changing demographics and urbanization. It is also influenced by changing consumer patterns and habits. The changes related to income patterns and the respective disposable income have influenced the demand of the packaging material for the different industries.
  • With the urbanization and growth of industries in Saudi Arabia, the packaging industry has gained a significant boost in its demand levels. Presence of raw material has also been a critical demand influencer. With major revenue generated from the oil and gas sector, Saudi Arabia is planning to develop other industries to limit the dependency in oil and gas revenues and diversify its economy.

Key Market Trends

Rigid Packaging Materials, like Paper and Paperboard, are Expected to Hold a Significant Market Share
  • With the introduction of government initiatives in Saudi Arabia proposing a plan to limit the usage of plastic, paper and paperboard are considered as the best alternatives due to its recyclable properties. The harm that these materials cause the environment is less, as compared to the plastic packaging, and it have been established and backed by multiple research reports.
  • Economy diversification policies have also expedited the foreign investment. One window solution for business setup has also been a positive impact on the market. Furthermore, with the already existing food and beverage products using paper and paperboard for different levels of packaging, it has become easier to gain acceptance from the current set of consumers. Thus, the paper and paperboard packaging is expected to replace plastic packaging in the future.
  • Plastic packaging solutions are currently being used across various industries, such as manufacturing, retail, and healthcare. It has gained a significant traction in the healthcare industry due to its high barrier properties, long shelf-life, and durability. The demand for plastic packaging solutions is expected to grow during the forecast period.

Rapid Urbanization and Augmenting Policies Prompt the Retailers to Experience a Significant Market Growth
  • To reduce the dependence on the revenues from the oil and gas sector, the government is focusing on developments of other industries. Thus, this will help cater to development and generate a substantial amount of revenues from other sectors, in order to safeguard themselves from the risk that pertains due to the non-renewable nature of fossil fuels.
  • The Government of Saudi Arabia aimed toward having a more inclusive role for the Saudi nationals through Saudization reforms. In favor of this initiative, the Saudi Arabian government announced that it would nationalize 12 economic activities, including retailing. Over 40 retail professions (including apparel and footwear specialist retailers, homewares and home furnishing stores, electronics and appliance specialist retailers, and jewelry and watch specialist retailers) were restricted to Saudi nationals for employment. These restrictions were effective in three phases, i.e., from September 2018 to January 2019.
  • The immediate effect of economic restructuring would have resulted in an economic slowdown. Therefore, the recent initiatives are being taken by the government as a part of Saudi Vision 2030, which offers a higher long-term outlook. With FDIs increasing in Saudi Arabia, the retail sector is expected to register a substantial growth in the market.

Competitive Landscape

The packaging industry in Saudi Arabia consists of several regional players, as well as international players, with a significant presence in the region. Due to the huge number of competitors, the market is fragmented with no player existing with a significant market share. Furthermore, packaging solutions demand better control on value chain for competitive pricing and one-point solution, which is offered for strategic advantage. With the amendments passed to ban plastic, the competition is expected to decrease, due to the adverse effects on the manufacturers producing plastic packaging.
  • May 2019 - Amcor Limited and Bemis Company Inc. announced that regulatory clearance has been received from the US Department of Justice in relation to the combination of the two companies. A condition of this approval is the previously announced sale of certain Amcor assets located in the United States to Tekni-Plex Inc.
  • Feb 2019 - Amcor Limited launched Genesis, a new in-store recyclable laminate solution, which is targeting a wide range of segments, including fresh fruits and vegetables, frozen food, dried fruits and nuts, confectionery, chilled goods, and pet food. The product is adaptable to a variety of packaging types, and it is appropriate for specific medical, home, and personal care markets.
  • Feb 2019 - Gulf Printing and Packaging are paving the path for future growth, as they are looking for scope in the food packaging market. Additionally, they are planning to have further expansion in the future.

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Table of Contents

1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Urbanization in the Country
4.3.2 Increased Foreign Direct Investments
4.4 Market Restraints
4.4.1 Reforms to Control the Use of Plastic Packaging
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Industry Value Chain Analysis
4.7 Technology Snapshot
5.1 By Packaging Type
5.1.1 Flexible Packaging
5.1.2 Rigid Packaging
5.2 By Packaging Material
5.2.1 Plastic
5.2.2 Glass
5.2.3 Metal
5.2.4 Other Packaging Materials
5.3 By End-user Industry
5.3.1 Food
5.3.2 Beverage
5.3.3 Healthcare and Pharmaceutical
5.3.4 Retail
5.3.5 Beauty and Personal Care
5.3.6 Other End-user Industries
6.1 Company Profiles
6.1.1 ASPCO
6.1.2 Sapin
6.1.3 Napco National
6.1.5 Al-Shams Printing Packaging & Trading Co.
6.1.6 Almoayyed International Group
6.1.8 Amcor PLC (Bemis Co. Inc.)

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Sapin
  • Napco National
  • Al-Shams Printing Packaging & Trading Co.
  • Almoayyed International Group
  • Amcor PLC (Bemis Co. Inc.)