The Middle East and Africa plastic bottles and containers market is expected to register a CAGR of 5.7% during the forecast period (2021-2026). According to Standard Chartered, during the COVID-19 pandemic, the Middle East's e-commerce market and pharmaceutical industry is booming. Triggered in part by pandemic lockdowns, consumers and businesses are shifting to digital channels, putting e-commerce sales on the way to reach USD 69.2 billion in 2021, from USD 4.3 billion just four years ago.
- Plastic packaging is becoming popular among consumers over other products as a plastic package is light in weight and is easier to handle. Similarly, even the major manufacturers prefer to use plastic packaging solutions, owing to their lower cost of production. Moreover, the introduction of polyethylene terephthalate (PET) and high-density polyethylene (HDPE) polymers are expanding the plastic bottling applications. The market is witnessing an increasing demand for PET bottles in the bottled water and soft drink markets.
- Moreover, manufacturers are prefering PET over other plastic packaging materials, as it has a minimum loss of raw material during the manufacturing process when compared to other plastic products. Its recyclability and the feature to add multiple colors and designs augment it to become a preferred choice. Refillable products have emerged with the rising consumer awareness for the environment and have acted in creating demand for the product.
- United Arab Emirates has a significant demand for cosmetic products, owing to the growing influence of lifestyle and beauty bloggers (that has become a luxury statement for the population). Messe Frankfurt estimated that the sales value of beauty products in the country might reach USD 2.7 billion by 2020.
- With the recent COVID-19 outbreak and measures taken to curb the spread of the virus, single-use plastic bottles and container bags have seen a surge in demand, which is likely to continue for the next 6-8 months. Also, manufacturing capability will see a shift in production towards such trends, enabling the competitive rivalry to strengthen. But various countries in the region such as Oman, Kuwait, and Bahrain have already banned single-use plastics.
- The Environment Agency - Abu Dhabi (EAD), the largest environmental regulator in the Middle East, aims to eliminate the use of avoidable single-use plastic and non-plastic materials by 2021 through fostering a culture of recycling and re-use. From January, 2020 Dubai International Airport (DXB), the world’s busiest airport that hosts 90 million people each year, banned single-use plastics at all its consumer spaces. DXB’s operator, Dubai Airports, recycles 43,000 tonnes of paper, glass, and other waste each year.
Key Market Trends
Food and Beverage Industry is Expected to Witness Significant Growth
- According to the Saudi Arabia Ministry of Commerce and Industry, the beverage and soft drink industries are now among the most mature sectors in the country, constituting a vast majority of the food and beverage sectors' exports. The beverage industry in the region is growing rapidly and its largely driven by bottled water, carbonated drinks, dairy products. PET as a packaging material for food and beverage is growing throught out the region.
- According to InterGest South Africa, the eCommerce sector of the food and beverage industry is on the rise. It had a market volume of approximately EUR 84.89 million in 2020. In 2021, the eCommerce sector is expected to grow by approximately 12.2%, which would result in a market volume of approximately EUR 95.25 million. Over the next few years from 2021 to 2025, the food and beverage eCommerce sector is expected to grow at an average annual rate of 7.66%.
- In February 2020, Agthia (UAE) announced a partnership with Veolia to launch several sustainability initiatives, which is likely to establish a circular ecosystem to make way toward more PET recycling in the region. Both the companies are aiming to structure the local PET ecosystem by developing innovative and digital collection solutions in order to address the challenges of post-consumed plastic bottles and encouraging the creation of a more sustainable and circular economy for plastics.
- According to Sidel, the demand for healthier products and sustainability are the two biggest trends impacting the PET packaging industry in the Middle East and Africa region. Since consumers are becoming more health conscious, moving towards more nutirional products and away from sugary soft drinks etc. These trends can impact the growth of the studied market in long term.
- Moreover, the emergence of biodegradable plastics is also expected to have an impact on the growing consumer markets. The adoption of materials, such as polypropylene, polyanhydrides, polyvinyl alcohol, and polylactic acid by packaging companies is expected to reduce the market share of conventional plastic packaging materials over the next few years.
Saudi Arabia is Expected to Hold Significant Market Share
- Presently, particularly PP and PE can only be imported into Saudi Arabia if the products incorporate the permitted oxo-degradable masterbatches. According to the applicable rules introduced by the Saudi Standards, Metrology and Quality Organization (SASO, Riyadh), a total of 16 product groups are designated to display the label for products, ranging from closures, clamshells, agricultural mulch films, landfill covers, lids, milk pouches, pallet and shrink wraps, and plastic containers and trays.
- Saudi Arabia is one of the significant consumers of soft drinks, especially sugary drinks, which is also a significant consumer for plastic bottles. Due to the growing obesity concerns among the population, owing to the high soft drink consumption, the government imposed an increased tax on beverages, which resulted in over 67% increase in soft drink prices.
- The government's attempt to diversify its economic dependence on the oil and gas industry led to its support for real estate developments and resulted in the increased opening of the retail markets. Due to the increasing penetration of organized retail formats, such as hypermarkets, supermarkets, and e-commerce, the processed and packaged food market in the region is currently exhibiting a strong growth rate.
- In Saudi Arabia, due to the several regulations passed by the government over the use of plastic, the market growth might slow down. Recently, according to the Saudi organization, SASO, plastic products must be made of an approved oxo-biodegradable material, which may restrict the import of plastics in the country. Hence, several factors are expected to change the adoption trends of plastic bottles and containers in the country.
The Plastic Bottles and Containers Market is fragmented in nature. Some of the major players are Amcor PLC, Graham Packaging Company, Plastipak Holdings Inc., ALPLA Group, among others. Factors, such as the increasing demand for food and beverages will provide considerable growth opportunities in the plastic bottles market. Therefore, many companies are seeing this market as an emerging market. Some of the recent developments are:
- December 2020 - Amcor PLC, partnered with thirty-five leading companies in the consumer goods industry, in order to reduce plastic waste. Amcor and its partners in this coalition - which have a collective turnover of EUR 1 trillion are enforcing two new design rules to deliver packaging that is easier and more cost-effective to recycle. The first design rule is expected to improve the economic viability of PET bottle recycling by removing colouring pigments and labelling that impact recycling rates. The second design rule will remove materials that are problematic for recyclers from all forms of plastic packaging.
- July 2020 - Alpha Packaging launched more than a dozen new 2-stage (reheat and blow) molds for its most popular narrow-neck polyethylene terephthalate (PET) items. The duplication of Alpha’s industry-leading single-stage PET portfolio to the 2-stage process added substantial capacity via a more efficient blow-molding process, and allowed Alpha to respond rapidly to unparalleled demand for hand sanitizer packaging in the era of COVID-19.
- February 2020 - Agthia Group PJSC, launched Al Ain Plant Bottle, the region's first plant-based water bottle, at Gulfood 2020 during UAE Innovation Month, in the presence of H.E. Dr. Thani Al Zeyoudi, UAE Minister of Climate Change and Environment. An MoU was also signed between Agthia and Veolia, a global leader in optimized resource management, to launch a PET water bottles collection initiative in the UAE.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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1.2 Scope of the Study
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitutes
4.3 Industry Value Chain Analysis
4.4 Assessment of the Impact of Covid-19 on the Market
4.5 Market Drivers
4.5.1 Increasing Adoption of Lightweight Packaging Methods
4.6 Market Challenges
4.6.1 Environmental Concerns Regarding Use of Plastics
5.1.5 Other Raw Materials
5.2 End-user Vertical
5.2.5 Household Care
5.2.6 Other End-user Verticals
5.3.1 United Arab Emirates
5.3.2 Saudi Arabia
5.3.4 South Africa
5.3.5 Rest of Middle East and Africa
6.1.1 ALPLA Group
6.1.2 Amcor PLC
6.1.3 Gerresheimer AG
6.1.4 Graham Packaging Company
6.1.5 Container Corporation of Canada Ltd
6.1.6 Altium Packaging LLC
6.1.7 Plastipak Holdings Inc.
6.1.8 Comar LLC
6.1.9 Al Amana Plastic LLC
6.1.10 Alpha Packaging
6.1.11 Nampak Ltd.
6.1.12 Takween Advanced Industries