Market Trends of South Africa Plastic Packaging Industry
This section covers the major market trends shaping the South Africa Plastic Packaging Market according to our research experts:
Aggressive Recycling Rates of Plastic Products within the Country and an increase in Waste Generation
- With the massive amount of plastic waste in the country, the recycling trend is growing at a healthy rate in the country, with government regulations and high consumer awareness. Companies, such as Coca-Cola, in South Africa, collected and recycled more PET than what was produced within the country.
- Furthermore, countries in Africa are making considerable efforts to increase local production, with the help of increasing investments from Asian and European countries. As a result, existing foreign players, like Lupin and Dr. Reddy’s, are expected to expand their production capabilities in the region. This factor is expected to boost the demand for healthcare packagings, such as blister packs, caps and closures, pouches, and IV bags.
- Plastics SA recently released a recycling report that stated that South Africa is amongst the best countries in the world with regard to plastics recycling. They noted that even developed nations with the sophisticated collection and sorting systems do not recycle as much plastic as South Africa.
- Incidences of infections are marking their presence in various countries across the world, thus increasing the need for sterilization of medical products and devices and contributing to the growth of the pouches segment. Therefore, companies are investing in technical innovations in sterile packaged pouches for medical devices.
- In January 2020, South African companies, including Unilever, Coca-Cola Africa, Danone, SPAR, and Massmart, announced to force Plastic Pact to reduce plastic usage, following similar commitments from the United Kingdom, France, Chile, and the Netherlands. The companies are aiming at all plastic packaging reusable, recyclable or compostable by 2025. Additionally, they are aiming to recycle 70% of plastic packaging and use 30% recycled content across any plastic packaging. More than 450 organizations have signed up for this vision as part of the New Plastics Economy Global Commitment.
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Increasing Alcohol Consumption in the region
- According to a report published by Business Insider, 450 million liters of wine were sold in South Africa, out of which 177 million liters (about 39%) were sold in glass bottles. The demand for wine and CBD drinks is augmenting the demand for glass and PET bottles. Thus, the demand for aluminum caps and closure is likely to be driven by the increasing usage of glass bottles. This is expected to create demand for plastic bottles in the country.
- Companies in the country are actively seeking sustainable plastic bottle packaging solutions. In February 2020, Coco-Cola beverages, South Africa, has introduced a 2L returnable bottle made of PET plastic that can be reused 14 times. With this innovation, the company is looking to provide greater value for money.
- The consumption of beverages in the country is growing at a high rate, without the influence of external economic factors. Soft drink consumption is rising in the country, owing to climatic conditions, with the population increasingly drinking carbonated drinks. The consumption of bottled water also grew significantly, with severe water scarcity in the nation for the past two years. With PET bottles being the norm in the market, the consumption of plastic bottles grew parallelly.
- The demand for household goods is also growing, with many consumers spending more on essentials. The improving socio-economic climate in the country is influencing the market positively. The recycling trend is catching up with companies and individuals focusing on recycling.
- The demand for substances in South Africa has increased, and more funds are allocated to address the demand for substances, especially in the Western Cape
