Market Trends of Saudi Arabia Plastic Caps And Closures Industry
Polyethylene to Witness Growth in the Industry
- Polyethylene, a prevalent consumer plastic, is found in many products. As a thermoplastic, it boasts the unique ability to transition from a solid to a liquid state repeatedly. Depending on the processing conditions, polyethylene can yield diverse grades, catering to various applications. It's typically categorized into LDPE, LLDPE, and HDPE, among other significant compounds.
- Polyethylene's leakproof qualities and impermeability to water vapor make it a significant choice for heat-sealing. This feature lets it snugly wrap around products, creating an airtight seal. Beyond its protective attributes, polyethylene stands out for its versatility. It offers protection and serves as a canvas for advertising, entirely complementing the product.
- In December 2023, Sipchem, the Sahara International Petrochemical Company, was granted a USD 500 million (SAR 1.87 billion) EPC contract to expand the ethylene cracker plant at SEPC (Saudi Ethylene and Polyethylene Company). The company announced that it aims to complete the project's expansion and commence production in the first half of 2026. This expansion is projected to boost Olefin's output by approximately 18% and positively impact Sipchem's financial performance.
- Further, in January 2024, Lummus Technology, a global leader in process technologies and energy solutions, secured a contract from the Saudi Ethylene and Polyethylene Company (SEPC), a Joint Venture of Tasnee Sahara Olefins Company (TSOC). The agreement entails designing and supplying two cutting-edge Short Residence Time ethylene heaters for SEPC's Al-Jubail, Saudi Arabia facility. This project promises to ramp up ethylene production and underscores SEPC's dedication to enhancing energy efficiency and reducing emissions.
- According to General Authority for Statistics (Saudi Arabia), revenue of manufacture of rubber an plastic products in Saudi Arabia in 2021 was USD 4.03 billion and is expected tp reach USD 5.83 billion in 2024. Plastics like polyethylene can be conveniently recycled by tossing them into recycling bins, rendering them more eco-friendly than flexible alternatives. Furthermore, the expanding adoption of packaging caps and closures across multiple industries bolsters its market demand.
Understand The Key Trends Shaping This Market
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Beverage Sector is Expected to Drive the Market Growth
- The caps and closure market in the food and beverage sector is propelled by the rising demand for packaging solutions to extend food products' shelf life. This trend is particularly pronounced with carbonated beverages, water, juices, sports drinks, and nutritional beverages. The surge in demand is further fueled by an increasing number of nuclear families and a growing preference for convenience foods.
- Consumers gravitate towards plastic caps and closures beverage packaging due to its robustness, barrier properties, and durability. This packaging offers enhanced strength and maintains the flavor integrity of the beverages. Its recyclability is a significant environmental benefit, further reducing pollution.
- Further, according to the General Authority for Statistics (Saudi Arabia), the industry revenue for manufacturing beverages in Saudi Arabia in 2023 was USD 3.12 billion and is expected to reach USD 3.13 billion in 2024. Beverages, such as the soft drinks industry in Saudi Arabia, are surging. This uptick is fueled by the proliferation of non-alcoholic beverages in recent years, catering to a demographic that seeks the essence of drinks without the side effects of alcohol.
- In January 2024, Saudi Arabia announced plans to inaugurate a store in Riyadh, marking the first legal alcohol outlet in over seven decades. This establishment, situated in Riyadh's Diplomatic Quarter, will exclusively cater to a select group of non-Muslim expatriates, primarily diplomatic personnel. This might push the market for caps and closures in Saudi Arabia.
- The rising health consciousness among consumers drives the demand for fruit juices and flavored drinks. Additionally, the influence of sports professionals and fitness enthusiasts is boosting the demand for energy and sports drinks, further propelling Saudi Arabia's caps and closures market.
