Saudi Arabia Paper and Paperboard Packaging Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Saudi Arabia Paper and Paperboard Packaging Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Saudi Arabia Paper And Paperboard Packaging Market size in terms of shipment volume is expected to grow from 1.55 Million tons in 2024 to 1.92 Million tons by 2029, at a CAGR of 4.38% during the forecast period (2024-2029).

In Saudi Arabia, the demand for user-friendly packaging and enhanced product protection is rising, which is propelling the adoption of corrugated packaging. Paper and cardboard packaging is popular for its versatility and cost-effectiveness, offering visually appealing options across numerous industries. They are eco-friendly and adaptable to various sizes, making them further popular. These packaging formats also align with the growing environmental consciousness among consumers and businesses.

Key Highlights

• Saudi Arabia's food delivery industry has grown significantly, driven by the surge in single-person households and evolving consumer lifestyles. This is fueling the demand for single-serve packs, further propelling the growth of the packaged food industry and, in turn, the market studied. The convenience offered by single-serve packs aligns with the fast-paced lifestyles of modern consumers, making them an attractive option for people seeking quick and easy meal solutions.
• Urbanization, a rise in tourists favoring safer processed meals, and a growing foreign population have heightened the consumption of packaged food and beverages in Saudi Arabia. These factors collectively contribute to the increasing demand for convenient and safe food packaging options, further driving the growth of the market.
• The Saudi government has implemented regulations to mitigate the environmental impact of plastic packaging. These regulations include restrictions on single-use plastics and the promotion of sustainable packaging alternatives such as paper and cardboard. Such regulations are anticipated to support the growth of the market.
• Although Saudi Arabia is the biggest market in the Cluster Greater Middle East and Africa, it has fewer paper mills and recyclers in the region than its counterparts. Moreover, Saudi Arabia's Vision 2030 announcement outlined a sustainable future for the industry, albeit one riddled with supply chain issues as vendors were forced to augment existing chains to match better. It is an ambitious yet achievable blueprint that expresses the country's long-term goals and expectations and reflects its strengths and capabilities.
• In the post-pandemic, companies prioritized aligning production with pre-pandemic levels while placing sustainability on a medium-term agenda. In April 2024, the Middle East Paper Manufacturing and Production Company (MEPCO) collaborated with GM Voith SE & Co. KZ, securing a production line for their cardboard project. The machine boasts an annual capacity of 450 thousand tons, with a total project investment pegged at SAR 1.78 (USD 0.474) billion over 36 months.

Saudi Arabia Paper and Paperboard Packaging Market Trends

Corrugated Boxes Holds Major Share

• Corrugated boxes are multi-layered rigid boxes made with two sheets of paper (called liners) glued to either side of a corrugated inner fluting. The inner fluting consists of connected arches, which allow for greater strength and resistance. The substrate and the corrugated board can be cut and folded to produce a custom-manufactured container and then printed by using various methods depending on run size and design. Corrugated packaging is mainly used as a shipping container for multiple industries, point-of-purchase displays, and pallets.
• The rapid growth of e-commerce and online retail in Saudi Arabia is one of the drivers for the increased demand for corrugated boxes. As online shopping becomes more prevalent, companies require durable and cost-effective packaging solutions that protect products during shipping. Corrugated boxes are ideal for this purpose due to their lightweight, strong, and recyclable nature, making them suitable for shipping a wide range of goods.
• According to the IMF, the country-wide retail sales in Saudi Arabia are estimated to be valued at USD 155.6 billion by the end of 2024. The retail sales volume is expected to increase to approximately USD 176.5 billion by 2029.
• In February 2024, Alibaba Group Holding Limited, the Chinese e-commerce giant, actively sought its expansion across the Gulf markets, mainly in Saudi Arabia and the United Arab Emirates. This initiative highlighted Alibaba's recent efforts in the Saudi Arabian market, indicating concerted efforts to deepen its presence in the thriving e-commerce landscape of the region. Such expansions in the country's retail sector will create more demand for corrugated boxes.
• There is a growing demand for sustainable and eco-friendly packaging in Saudi Arabia, driven by government initiatives (like Vision 2030's sustainability goals) and consumers' preferences. Corrugated boxes, which are made from recycled materials and easily recyclable, are a greener alternative to plastic-based packaging solutions.

Food and Beverage Holds Major Share

• The food and beverage sector in Saudi Arabia is experiencing significant expansion, primarily due to the thriving food and dairy industries and rising demand for various food and beverage items. The government's initiatives and awareness campaigns encourage the population to choose healthier food options. As reported by the General Authority for Statistics in Saudi Arabia, the revenue from food product manufacturing is anticipated to reach USD 23.26 billion by 2024 compared to USD 21.42 billion in 2022.
• As reported by the SaudiFood Manufacturing Show 2024, Saudi Arabia is the largest and most rapidly expanding market in the food and beverage sector in the Middle East. Currently valued at USD 60 billion, this market is witnessing a growth rate of 4%. Furthermore, the Saudi Authority for Industrial Cities and Technology Zones (Modon) has overseen the establishment of 1,300 food factories spread across 36 cities. This expansion underscores the domestic food industry's increasing capacity and its push toward localization. Given these robust industry capabilities, the demand for paper and cardboard packaging is anticipated to witness growth.
• The food and beverage industry in the region is witnessing an increasing demand for paper and cardboard packaging, which has seen significant growth following the pandemic. This surge in demand is primarily driven by the rise of e-commerce and a consumer inclination toward sustainable, environmentally friendly, and hygienic packaging solutions. The ongoing prohibition of single-use plastics in various countries has also propelled the expansion of paper packaging products.
• The demand for folding cartons is anticipated to increase, driven by the rising consumption of beverages in the region. For example, folding cartons serve as intermediate packaging for butter, milk, and milk-based confections. The Kingdom ranks among the leading dairy exporters in the Middle East and the world, a status achieved through well-structured development plans and policies. These factors are expected to boost the demand for packaging of products in cartons and other packaging types segments.

Saudi Arabia Paper and Paperboard Packaging Industry Overview

Major players in the Saudi paper and cardboard packaging market include Obeikan Investment Group, Gulf Carton Factory Company, and Eastern Pak Limited, which hold significant market shares with their consistent investments in technological advancements and product launches.

With entry barriers ranging from low to moderate, established companies are meeting the surging demand. As market opportunities expand, new and existing firms feel pressured to invest in product innovations. This dynamic intensifies competition, heightening the competitive rivalry within the market.

To bolster their market presence and engage in fierce competition, companies employ a range of strategies, including mergers and acquisitions, partnerships, and capacity expansions, by installing new machinery.

For example, in January 2023, Crown Paper Mill announced its acquisition of 90,000 square meters of land in Jubail 2, Saudi Arabia, aiming to meet the region's surging demand for paper packaging. The company's newly installed paper machine, boasting a capacity of 65,000 MT annually, is slated to commence operations in the last quarter of 2024.

This shows the competition in the market, thereby having a moderately highly competitive rivalry, which is expected to increase in the forecasted period.

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