Middle-East and Africa Pulp and Paper Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Middle-East and Africa Pulp and Paper Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Middle East and Africa pulp and paper industry was estimated at USD 23.69 billion in the previous year. The market is expected to reach USD 28.72 billion in five years, recording a CAGR of 3.28% over the forecast period.

• The market for pulp and paper products is expanding in the Middle East and African region, mainly due to growing paper-based product demand and rising awareness of the need to lessen the carbon impact of traditional packaging materials. To reduce the use of non-renewable resources by limiting trash output in the nation, the Qatari government has launched several green economy programs under the National Vision 2030. ​
• The need for green packaging materials is driving the market, particularly paper packaging solutions, which is further fueled by the enforcement of strict legislation regarding the ban on single-use plastic in the food and beverage sector. Also, unsustainable business practices have empowered consumers to demand a higher standard of product that has a favorable impact ecologically.​
• The expansion of e-commerce sales and the rising demand for cartons and container boards are two significant factors driving the market under consideration. Consumers now prioritize recyclability and biodegradability over reusability as crucial packaging parameters. This reflects customers' increased concerns about future packaging waste's environmental impact. Due to these factors, the market studied may continue to grow over the forecast period.
• The increasing price of raw materials is expected to challenge the growth of the pulp and paper industry. However, as living standards in Africa improve, the continent's demand for pulp and paper products may also increase. The market is expected to continue growing in the coming years due to urbanization and rising disposable income. Moreover, there is reason to acknowledge that paper consumption in the region will increase, creating business opportunities and no longer affecting the demand for paper-based products during the forecast period.
• During the outbreak of COVID-19, the market studied faced slow growth due to lockdowns imposed by various countries. However, Middle Eastern companies were already preparing for growth and opting for automation. Many industry professionals understand that fully-automated solutions could help address most of the challenges that COVID-19 places. For packaging businesses to regroup and take a broader approach to current processes and procedures, automation in critical areas enhanced operational productivity in the industry.

• Food and beverage manufacturers are making significant efforts to provide sustainable materials and packaging, functional and convenient displays, and healthier and fresh food options to meet consumer demand. Paper bags are becoming increasingly popular in restaurants, hotels, cafes, and other catering establishments. Similarly, the growing popularity of on-the-go dining and online grocery delivery services has increased the demand for paper bags in the hospitality industry. Consumer expectations are changing owing to sustainability, customization, and e-commerce, which drive innovation in packaging.
• According to Boston Survey Group August 2021, as food demand changes, African countries plan to invest strategically in creating agro and food-related industries, especially downstream ones. Africa’s green and diverse primary sectors have the potential to support almost all types of businesses involved in the production, distribution, handling, storage, processing, packaging, and retailing of processed food. Growing agribusiness will help shift subsistence farmers into related industrial and service occupations, allowing them to earn higher incomes, increase their purchasing power, and increase food demand.
• Similarly, according to the International Food Policy Research Institute (IFPRI) in March 2021, the growing demand for packaged food is due to the rapid expansion of food processing and modern distribution and packaging systems in the food supply chain, with the growth of small and medium enterprises (SMEs) and extensive domestic and international food companies. They have also stimulated the demand for processed foods through aggressive marketing campaigns and the low cost of such foods achieved through investments in economies of scale. Many of the major players in the African food market have expanded their operations through foreign direct investment.
• With the evolving lifestyle, Middle Eastern countries have seen an increased demand for paper-based packaging products in the foodservice sector. Consumers frequently grab convenient and functional drinks, such as RTD coffee and tea, energy drinks, and other beverages that can be consumed whenever and wherever they need a boost. As such, non-alcoholic drinks that offer functional and practical benefits that are relatively healthy and natural can appeal to busy consumers. Leveraging the natural, energy-boosting characteristics of electrolytes, vitamins, minerals, and other natural ingredients in new product formulations can help brands target tired consumers.
• With the rise of urbanization, many modern consumers spend much time out of their homes, traveling to and from social venues, enjoying the weather, and attending sporting events. Consequently, consumers are increasingly drinking while on the move. Recently, in November 2022, more than 1.4 million fans from across the world visited Qatar for the FIFA World Cup 2022. Qatar rolled out the red carpet for over 1 million visitors for the FIFA World Cup and aims to attract up to six million a year by 2030. Consumption of packaged food is expected to grow based on different perspectives of regulations by the country and industry over the forecast period.

• The growth of the food ingredients market in South Africa is fueled by the expansion of the food and beverage industry, increasing consumption of dairy and frozen dairy products, increased focus on innovation in the food and beverage sector, and increasing demand for processed and packaged foods.
• The South African pulp industry is characterized by heavy use in the food industry. Consumers tend to seek low-cost, sustainable, lightweight, reusable, recyclable, convenient, and heat-resistant products, which help increase demand for food packaging. The growing demand for portable and suitable forms of food packaging helped drive the use of packaging products in various industries.
• Pulp-based packaging is more sustainable than other materials due to its recyclability and degradability. In addition, convenience, low cost, and light weight have made flexible packaging the most desirable packaging material driving the market’s growth.
• The Paper Manufacturers Association of South Africa (PAMSA), in February 2023, conducted a study focusing on paper and print in modern society. The study found that 82% of South African consumers recognize that paper and pulp are still part of their daily lives. PAMSA shares insights from a recent paper and print survey. However, many individuals need to be made aware of the benefits of the materials. This has led a large portion of the population to underestimate the contribution of the pulp and paper industry to South African society. Therefore, the Paper Manufacturers Association of South Africa (PAMSA) partnered with GM Television to raise awareness. Such initiatives would drive the market for the pulp industry in the country.
• The country anticipates an increasing demand for food and beverage packaging during the forecast period. Rising household expenditure in the country drives the demand for convenient food products, further propelling the market for sustainable and eco-friendly materials such as pulp in the coming years.​

The industry for pulp and paper in the Middle East and African region is competitive. The major factors governing this market are a sustainable competitive advantage through innovation, levels of market penetration, barriers to exit, power of competitive strategy, and firm concentration ratio.

• In June 2022, Mondi sold Nitto Denko Corporation, its Personal Care Components business (PCC). The sale allows Mondi to streamline its holdings and concentrate on its strategic goal of expanding. Mondi is far along in the appraisal of an investment in a new 200,000-ton kraft paper plant at one of the cost-effective locations for an anticipated total of EUR 350 million (~USD 372.3 million). This will enable the business to meet the rising demand for eco-friendly paper-based flexible packaging and expand its pulp operations.

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