Middle East and African flexible packaging market has Indian growth 'potential'

By Mark Astley

- Last updated on GMT

Related tags: Flexible packaging market, United arab emirates, Middle east

Middle East and African flexible packaging market has Indian growth 'potential'
The Middle East and African flexible packaging industry, which accounts for around 5% of the world market, has the potential to experience the same significant growth as India, according to an industry report.

According to a PCI Films report, The Middle East & African Flexible Packaging Market 2011, ​sales for 2010 for the region stood at around €2.5bn, of which food packaging accounted for about 80%.

A PCI spokesperson told FoodProductionDaily.com that the proportion of prepacked food, which stands at about 5% in many African states, and rising consumer demand in the region, shows significant “potential” ​for growth.

The report also outlines major investment in the region’s food packaging sector from the Indian market rather than from European packaging counterparts.

Growth potential

The spokesperson said: “The population size of the Middle East and Africa, which is around 1.2bn, is similar in size to the Indian market, so there is the potential there to grow to the same potential, especially in African countries such as Nigeria.”

Flexible packaging industry growth for the region for 2010 was around 7% and the report predicts it to continue to grow by around 4-5% per year until 2015.

A recent PCI Films report on the Indian flexible packaging market estimated the country’s share of the world market, which also stands at around 5%, has the potential for between 15% and 20% yearly growth.

“Previously emerging food packaging markets have been known to jump from being in a state where packaging in barely used to flexible packaging being used a lot. This demonstrates huge potential for food packaging growth.”

Rising consumer demand for packaged dried and dehydrated foods such as pasta, rice, milk powder and soup mixes, and a growing young consumer market in the region has boosted the demand for flexible packaging.

These products have driven packaging sales in the region and account for a fifth of flexible packaging demand in Africa and the Middle East.

Indian investment

Food production in many areas of the region is growing in scale and sophistication, something which multinationals have responded to with major investment, which in turn has led to advances in distribution, logistics and packaging.

“Many African economies overall have shown significant progress, which inevitably means there has been increased interest from multinational companies such as Nestle,”​ added the PCI spokesperson.

Multinational convrters would often see an investment in Africa as a risk and would question investment returns but countries like India are more prepared to make investments in these regions.”

Indian packaging expertise has been applied across the region, with countries like Nigeria and the United Arab Emirates (UAE) benefitting.

“I think we will continue to see exports from Europe into the Middle East and African region, but there is more competition as a result of import substitution and suppliers from elsewhere, increasingly from India and China."

“But this could change in future with the regions current growth.”

Related topics: Processing & Packaging

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