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Middle East and Africa Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 120 Pages
  • October 2021
  • Region: Africa, Middle East
  • Mordor Intelligence
  • ID: 5458965

The Middle East and Africa Paper Packaging market is expected to register a CAGR of 4.3% over the forecast period (2021 - 2026). Some studies suggested that the virus can be passed on through cardboard and plastic, which has resulted in increased usage of single-use materials across supermarkets to wrap products, such as cling film for fruit and vegetables in the country. In addition, paper and packaging manufacturers in the region faced fluctuations in demand as the COVID-19 pandemic intensified, with potentially disruptive effects on production and revenues.

Key Highlights

  • The rising retail and e-commerce industries and the growing need for environmentally friendly packaging materials are currently driving the market's expansion. The demand for secondary and tertiary paper packaging products has increased dramatically as online shopping platforms have grown rapidly.
  • There is a strong demand for products like packaged foods, vegetables, and fruits in the food sector, among others. Ready-to-eat meal products are among the top adopters of cartons and other forms of paper-based packaging as the secondary form of packaging. According to the managing director of Hotpack Global, the food packaging industry in the UAE was valued at AED 10 billion in 2020 and is expected to grow to AED 14 billion in the next five years.
  • The presence of some of the country's prominent companies includes Obeikan Investment Group, Gulf Carton Factory Company, Eastern Pak Limited., among others are augmenting the studied market growth. Obeikan Investment Group produces strong and attractive structural packaging for hundreds of local and multinational brands. The company has an annual production capacity of 50,000 tons in its recently completed modern production facility and is one of the largest folding carton converters in Saudi Arabia.​
  • Hardwood pulps are used in the outer layers because of their effect on surface properties, whereas softwood pulps are needed to get enough strength to the paperboard product. Chemical pulps are more expensive than mechanical pulps because of the lower yields in pulp production. Pure concentrations of chemical pulp also do not premise the development of stiff paperboard without the addition of mechanical pulp.

Key Market Trends

Food and Beverage Industry is one of the Significant Factor for Growth of Paper Packaging

  • The food industry is one of the largest consumers of paper packaging in the Middle East and Africa region. The region has a high rate of packaged food consumption, owing to rapid urbanization and an increasing number of tourists and expiates that often prefer safer processed foods. Also, the region has stringent packaging regulations in terms of food and beverages.
  • Further, corrugated cases are used to ship goods to an online retailer warehouse or 'fulfillment center. The emergence of a subscription box and meal kit services that offer direct-to-consumer delivery of specialist food using a weekly or monthly subscription provides a new opportunity for corrugated board suppliers with delivery-friendly formats containing goods within a die-cut interior.
  • Saudi Arabian consumers are increasingly becoming savvy regarding food and beverages as their demand for new products with a stronger health focus is growing. Online shopping of food combined with the growing proliferation of food delivery services is expected to accelerate the demand for sacks, kraft papers, folding cartons, and liquid cartons. According to the Saudi Arabian General Authority for Investment (SAGIA) forecasts, the spending on foodservices is expected to grow by 6% per annum over the next five years, with food consumption reaching SAR 221 billion by the end of 2021.
  • The demand for online shopping for food and beverages further accelerated in the country owing to the recent effects of the pandemic. According to a study conducted by Choueiri Group in May 2020, which involved inputs of 2,800 Saudi participants, consumers in Saudi Arabia ramped up their online purchases of food and beverages during the pandemic; about 55% of the population purchased grocery items online in April, which exponentially higher compared to the 6% before the outbreak.
  • In April 2020, Souq, an Amazon-owned online retailer, loaded its pantry to prevent crowds in stores and supermarkets, especially as Ramadan approaches, resulting in increased food purchases and other essentials. The seasonal demand for folding cartons in Egypt is driven by food and other needed stockings during Ramadan.

Saudi Arabia adoption to Paper Packaging

  • In April 2020, Saudi Arabia’s Asir Municipality ordered restaurants to safely and securely package meals for delivery to protect the customers from COVID-19 by delivering safe packages. According to Choueiri Group, 68 percent of respondents in Saudi Arabia reported an increase in their online shopping of groceries, food, and beverages compared to before the COVID-19 pandemic in 2020. This has increased the demand for folding carton packaging for food and beverages in the region.
  • The boxes come in different types of flutes, a wavy layer of paper in the middle of a corrugated board that gives rigidity, strength, and stackability. These flutes range from A to F. The most frequently used is the C flute, which offers a good printing surface, crush resistance, and compression properties to secure products like glassware, food products, etc. In addition, the boxes are also classified based on board styles such as single surface, single wall, double wall, and triple wall. To meet such requirements, Gulf Carton Factory offers corrugated boxes ranging from A to F and a combination of flutes together, such as BC and EB.
  • As corrugated boxes are required to ship healthcare products, as well as pharma medicines, to various places in distribution, it is one of the most used paper packaging types in Saudi Arabia. Paperboard used in pharmaceutical packaging has benefits, such as performance in code-ability, allowing 2D Datamatrix codes to be easily read, high stiffness and durability for increased product protection, etc.
  • More women are now working in the country than ever before, leading to a rise in disposable income and driving the sales of more premium cosmetic brand products. It is estimated that in countries, like Saudi Arabia, on average, women spend over SAR 15,000 annually on personal care products. Also, it is found that financially independent women spend almost 70-80% of their salary on cosmetics products annually.
  • With the growing efforts of the vendors along with government push, the industrial production in the country is expected to increase significantly along with various hardware demands, which is expected to positively impact the demand for paper packaging in the industry.

Competitive Landscape

With many country's and regional players in the industry, the Middle East and Africa Paper Packaging market expect to be moderately consolidated.

  • Jan 2021 - Tetra Pak has launched a new collaborative innovation approach with top paperboard manufacturers to address the food packaging industry's sustainability issues. The conventional linear supply chain operating model has altered, and a new partner ecosystem model is emerging, in which the entire sector collaborates closely. This brings together not only producers and suppliers but also research institutions, universities, and start-ups in an attempt to find solutions
  • Jan 2021 -Mondi confirms that all conditions have been satisfied, and it has completed the acquisition of 90.38% of the outstanding shares in Olmuksan International Paper Ambalaj Sanayi ve Ticaret A.Ş (“Olmuksan” or the “Company”) from International Paper for a total consideration of EUR 66 million. The implied enterprise value on a 100% basis would amount to around EUR 88 million.
  • June 2021 - Smurfit Kappa has announced opening a new International Safe Transit Association (ISTA) certified lab at its new eCommerce packaging plant in Northampton, UK. This brings with it an extension of Smurfit Kappa’s network of packaging testing labs and centers that assist retailers and producers in developing, test, and drive disruptive packaging solutions for eCommerce at minimum risk and with reliable implementation. ISTA certification is often required by online business platforms such as Amazon, Alibaba, or eBay.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitute Products
4.3 Industry Value Chain Analysis
5.1 Market Drivers
5.1.1 Strong Demand from the Food and Beverage Sector
5.2 Market Restraints
5.2.1 Fluctuating Raw Material Prices
7.1 By Product
7.1.1 Folding Cartons
7.1.2 Corrugated Boxes
7.1.3 Slotted Containers
7.1.4 Die Cut Container
7.1.5 Five Panel Folder Boxes
7.1.6 Setup Boxes
7.1.7 Other Product Types
7.2 By End-User Industry
7.2.1 Food
7.2.2 Beverage
7.2.3 Personal Care and Home Care
7.2.4 Electrical Goods
7.2.5 Other End-user Industries
7.3 By Country
7.3.1 Saudi Arabia
7.3.2 Israel
7.3.3 United Arab Emirates
7.3.4 Egypt
7.3.5 South Africa
7.3.6 Others
8.1 Company Profiles
8.1.1 Tetra Laval
8.1.2 International Paper Company
8.1.3 Rengo
8.1.4 Graphic Packaging International Corporation
8.1.5 Sappi Limited
8.1.6 DS Smith
8.1.7 Amcor
8.1.8 Mondi Group
8.1.9 Oji Paper
8.1.10 Smurfit Kappa
8.1.11 Metsa Group

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Tetra Laval
  • International Paper Company
  • Rengo
  • Graphic Packaging International Corporation
  • Sappi Limited
  • DS Smith
  • Amcor
  • Mondi Group
  • Oji Paper
  • Smurfit Kappa
  • Metsa Group