United Arab Emirates Plastic Packaging Market - Growth, Trends, COVID-19 Impact, and Forecast(2022 - 2027)

United Arab Emirates Plastic Packaging Market - Growth, Trends, COVID-19 Impact, and Forecast(2022 - 2027)

United Arab Emirates Plastic Packaging Market is growing at a CAGR of 5.0% during the forecast period. Plastic packaging has changed the ways in which the packaging industry functions. Packaging solutions that are lightweight, durable, and comfortable are some of the factors that have augmented the use of plastics as a packaging material across the world.

Plastic consumption in the United Arab Emirates exceeded 100 kg per person. The plastics consumption per capita shows an upward trend over the past decade in the United Arab Emirates, mainly due to the development of new products and material substitution in established markets. In many cases, plastics are still the material of choice, irrespective of metals, paper, etc., in a range of standard products. Also, plastics are the third most exported commodity in the United Arab Emirates.

Moreover, the standardization of the 'Made in UAE' initiative, which introduces the local manufacturers to the global market, is helping the country to reduce its reliance on imports and strengthen its export potential. The growth of this kind in the manufacturing sector encouraged considerable investments in the packaging industry. Most of the investments in the packaging sector are made toward adjusting their packaging practices to the country's current economic situation and evolving standards. With low purchasing power, the country's retail sector witnessed several changes in consumers' behavior.

The demand for plastic packaging continues to surge even though serious concerns are being raised about its impact on the environment. However, the market will face challenges from government regulations and consumer demand, pushing manufacturers to look for plastic packaging solutions that are biodegradable or derived from sustainable sources.

Plastic packaging solutions are used across various industries such as manufacturing, retail, and healthcare. Plastic packaging has gained significant traction in the healthcare industry due to its high barrier properties, long shelf-life, and durability. The demand for plastic packaging solutions will continue to grow throughout the forecast period.

Key Market TrendsIncreasing Spending Capacity in the Region post Pandemic

The region is witnessing significant manufacturing developments of plastic materials such as polyvinyl chloride (PVC) used considerably in the rigid plastic packaging landscape. In June 2021, Reliance Industries Limited and UAE's state-run oil giant Abu Dhabi National Oil Company (ADNOC) announced that they would develop a new petrochemical joint venture to produce Chlor-alkali, ethylene dichloride, and PVC production facility at Ta'ziz Industrial Complex in Ruwais. The new unit will annually produce 1.1 million tons of ethylene dichloride, 940 thousand tones of Chlor-alkali, and 360 thousand tons of PVC.

UAE consumers turned online to access goods from retailers whose stores were closed and purchases of essential items when restrictions were in place. Online sales within the UAE's food and beverage market surged 255% year-over-year in 2020 to reach USD 412 million, according to a Dubai Chamber analysis that also predicted the value of online food and beverage sales in the country to reach USD 619 million by 2025 and record a compound annual growth (CAGR) of 8.5% over the 2020-25 period.

According to a joint study by Dubai Economy and global payments technology company Visa, the United Arab Emirates is making rapid strides as the fastest growing e-commerce market in the Middle East and North Africa (MENA). According to the study, UAE shoppers are among the top spenders online. In the broader Middle East, North Africa, and South Asia (MENASA) region, the UAE represents the biggest annual spending per online shopper, at USD 1,648, with growth projected at 29.6%through 2020.

Despite the fact that the demand from the packaging of non-essential industries decreased in the region, UAE's rigid plastic packaging landscape did not get significantly affected due to the increase in the consumption of essential consumer goods. Demand rose for packaging used in dietary supplements, such as vitamins usually packaged in plastic closures.

According to Aster Retail, Pharmacy groups in the United Arab Emirates registered up to a 200% rise in sales of multivitamins and zinc supplements since March 2020, as residents take proactive steps to boost their immunity. Since April 2020, there has been a 220% increase in sales of supplements such as vitamin C and zinc 2020 compared to 2019, and it is up by 50% in the first five months of 2021 at over 30 pharmacies. Aster Retail has more than 200 pharmacies across the United Arab Emirates.

Increasing Awareness Over Sustainability Concerns in the Industry

The environmental impacts of increased plastic use and public awareness resulted in calls for more sustainable options. However, a lot of paper packaging is being recycled into new packaging. But this has a high carbon footprint in production and reproduction from recycled material, compared to plastic.

According to a report presented at the World Government Summit in 2019, 11 billion plastic bags are used annually in the United Arab Emirates, which is the equivalent of 1,184 plastic bags per person per year compared to a global average of 307 plastic bags per person per year. Because of this, in March 2020, Environment Agency – Abu Dhabi (EAD) announced to eliminate the use of avoidable single-use plastic by 2021 through fostering a culture of recycling and re-use.

The EAD’s new single-use plastic policy also targets plastic cups, lids, cutlery, straws, stirrers, and food containers. Plastic bottles will be targeted through the introduction of a plastic bottle return deposit scheme.

In April 2020, Agthia partnered with Veolia to launch several sustainability initiatives, establishing a circular ecosystem to pave the way toward more PET recycling in the United Arab Emirates. Also, the company launched packaging called Al Ain Plant Bottle, which is environmentally friendly and made of complete plant-based sources, including the cap.

Several companies, such as Agthia, have started transitioning their packaging into recyclable, reusable, or compostable packaging within the coming years. However, challenges remain because the costs of alternate materials other than plastic are very high and more limited in the United Arab Emirates than in other parts of the world, thus, still driving the demand for rigid plastic packaging in the region.

Competitive Landscape

The market for Plastic Packaging in the United Arab Emirates is moderately consolidated and is expected to attain a higher degree of competitiveness owing to the increasing investments, new players, and growing applications in end-user industries. Major players have adopted product launch, collaboration, and acquisition to sustain the intense market competition. Some of the key players profiled in the report include Express Pack Print, Amber Packaging Industries, Petco Gulf, and Fujairah Plastics, among others. A few recent developments in the marketplace include;

• In June 2021, Reliance Industries Limited and UAE's state-run oil giant Abu Dhabi National Oil Company (ADNOC) announced that they would develop a new petrochemical joint venture to produce Chlor-alkali, ethylene dichloride, and PVC production facility at Ta'ziz Industrial Complex in Ruwais. The new unit will annually produce 1.1 million tons of ethylene dichloride, 940 thousand tones of Chlor-alkali, and 360 thousand tons of PVC.
• In June 2021, Bee'ah, a Middle Eastern environmental, recycling, and waste management company, partnered with UK waste recovery specialist Chinook Sciences to create the first waste-to-hydrogen project in the UAE using non-recyclable plastic waste. Similar initiatives are expected to boost the demand for sustainable packaging solutions for the country's personal care industry.
• In December 2020, Mimi's Rock Corp. announced its plan to expand into the Middle East through a new partnership with UltraPharma, a licensed pharmaceutical distribution company located in Dubai, the United Arab Emirates reaching more consumers with top brands Dr. Tobias health supplements and skincare All Natural Advice and Maritime Naturals.

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Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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