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Posted by on February 8, 2021

Market Reports on Saudi Arabia Provides the Trending Market Research Report on “Saudi Arabia Plastic Packaging Market – Growth, Trends, COVID-19 Impact, and Forecasts (2021 – 2026)” under Packaging category. The Saudi Arabia Plastic Packaging Market is projected to exhibit highest growth rate over report offers a collection of superior market research, market analysis, and competitive intelligence and industry reports.

The Saudi Arabian Plastic Packaging Market was valued at USD 8.59 billion in 2020, and it is projected to reach USD 11.93 billion by 2026, registering a CAGR of 5.6% during the period of 2021-2026. Most of the manufacturers are introducing additional functionalities of EVOH films for packaging. Functionalities, such as cost-effectiveness and high seal strength, are displaying an emerging trend in EVOH films for packaging. EVOH films are used as a food packaging solution, as they can successfully retain the properties of food products, thereby, preventing it from contamination during shipments.

– Saudi Arabia is one of the largest markets for the packaging industry in the Middle Eastern region. The country has a huge consumer base engaged across a wide range of industrial activities (apart from the oil and gas sector), which is adding to the rapid growth in demand for plastic packaging from the country, every year.
– The low crude oil price situation in the global market has realized the need for a stronger non-oil sector. To strengthen the country’s non-oil sector, Saudi Arabia has been implementing several initiatives and regulatory reforms, such as the National Industrial Development and Logistics Program (NIDLP), Vision 2030, etc., that may increase the industrial production in the region.

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– This is creating considerable demand for packaging products from the region’s non-oil sector. According to recent data from the Saudi Industrial Fund (SIDF), a significant shift in the development of the industrial sector is indicated by the massive change in the country’s sectoral composition. The SDIF suggests that share of industries (other than oil refining) in the manufacturing GDP increased from 32% in 1974 (at constant prices), to 70% at the end of 2018.

– Moreover, according to the SDIF, as of 2018; there were around 791 food manufacturing facilities, 173 beverage manufacturing facilities, 94 textile manufacturing facilities, 102 apparel manufacturing facilities, and 45 pharmaceutical manufacturing facilities in the country, which accounted for 16% of the total industrial manufacturing establishments in Saudi Arabia. All these industries play a major role in contributing to the increasing demand for plastic packaging products in the country.

– During the pandemic, oil derivatives, such as plastics, were being incorporated at unprecedented levels for various solutions, including packaging. Despite the many business challenges in the current market scenario, the petrochemical industry in the region was able to protect frontline workers and supply a wide range of essential medical supplies, including the packaging needed for transit and efficient shelf-life.

Key Market Trends

Polyethylene (PE) Expected To Witness Significant Market Growth

– Polyethylene (PE) is one of the most durable types of plastic that is currently available, as it is resistant to chemicals and available at a low cost. PE is derived from petroleum polymers and can withstand any environmental hazard.
– Polyethylene (PE) and high-density polyethylene (HDPE) are among the most common plastics used for rigid packaging. PE is majorly classified into high-density polyethylene (HDPE), low-density polyethylene (LDPE), and linear low-density polyethylene (LLDPE).
– HDPE plastic is one of the most common plastics used in manufacturing, and is known for its strength and durability. This type of plastic can also be color-matched and is popular in white. It is frequently used in the production of milk cartons and garbage bins.
– Additionally, HDPE is the most widely used resin for plastic bottles. This material is economical, impact-resistant, and acts as a good moisture barrier. While HDPE provides good protection at below-freezing temperatures, it cannot be used with products filled at over 160 °F (71 °C) or for products requiring a hermetic (vacuum) seal.
– Moreover, HDPE is used in food packaging for juice and milk jugs, squeeze butter and vinegar bottles, and chocolate syrup containers. HDPE is also one of the materials used for packaging personal care products, like body wash, lotion, shampoo, and conditioner. This is primarily due to its improved barrier properties, enhanced shelf life, and consumer preferences. The growth of the food and personal care industries in Saudi Arabia is driving the need for PE, thereby, impacting the market’s growth positively.

Bottles and Jars to Hold Significant Market Share

– The studied market is witnessing increased consumer demand, driven by the increasing consumption of plastic bottles and jars. The industries where plastic bottles and jars are highly used in the country include food and beverages, cosmetics and personal care, and healthcare industries. Saudi Arabia is now witnessing considerable growth in the food and beverage industry, compared to other countries.
– According to the Saudi Arabian Ministry of Commerce and Industry, the beverage and soft drinks industries are now among the most mature sectors in the country, constituting a vast majority of the food and beverage sectors’ exports.
– Increased income levels, owing to higher employment levels, are supporting a growing middle class in the country. This ever-increasing trend is leading the middle class to increase their budgets allocated for consumer products, which include personal care. The demand for personal care and cosmetics; particularly skin, make-up, and hair-care products; is witnessing rapid growth.
– With increasing expectations and income levels, the country’s consumers are also attracted to imported niche and premium branded products. Companies in the country are focusing on quality with good packaging, distribution, promotion, and pricing to attain brand loyalty and compete with global brands.
– For instance, the longstanding presence of companies, such as Unilever, Procter and Gamble, and L’Oreal, is fueling consumer interest in international beauty and personal care brands, which are perceived as being of higher quality.

Competitive Landscape

The plastic packaging industry is highly fragmented in the country, comprising of market incumbents (such as Napco Group and APICL Takween, and others), and accompanied by several regional Saudi Arabian contract packaging firms. Sustainable competitive advantage can be gained through innovation in design, technology, and application. The levels of market penetration in Saudi Arabia have grown significantly over the last decade, aided by the growing demand from the food and beverage and pharmaceutical industries. Recent developments in the market are –

– February 2020- AgthiaGroup PJSC, one of the region’s leading food and beverage companies, announced the launch of Al Ain Plant Bottle, the region’s first plant-based water bottle.
– June 2020- Aramco announced the completion of its share acquisition of a 70% stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF). The acquisition of the SABIC stake aids Aramco’s long-term downstream strategy to grow its integrated refining and petrochemicals capacity, and create value from integration across the hydrocarbon chain.

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