Market Trends of United Arab Emirates Plastic Packaging Industry
This section covers the major market trends shaping the UAE Plastic Packaging Market according to our research experts:
Rising Per Capita Income Positively Impacting Purchase Power
- The country's increasing per capita income resulted in a rise in consumers' disposable income. According to IMF, GDP per capita is anticipated to reach USD 50,348.816 by 2022, a 17.4% rise in value from the previous year, 2021.
- Further, according to ITC, in 2021, the exports of plastics and articles were valued at around USD 8.01 billion, a 15.03% increase from the previous year, 2020, which was recorded at about USD 6.96 billion. The growth in plastic exports may significantly impact the GDP rise due to the country's increased production.
- Also, the region is witnessing significant manufacturing developments of plastic materials such as polyvinyl chloride (PVC), which is 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.
- Moreover, the pandemic shifted consumer trends towards online purchases, significantly benefiting various plastic packaging companies in the country. UAE consumers turned online to access goods from retailers whose stores were closed and purchase essential items when restrictions were in place.
- 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 most significant annual spending per online shopper.
- Even though the demand for the packaging of non-essential industries decreased in the region, UAE's rigid plastic packaging landscape was not significantly affected due to the increase in the consumption of essential consumer goods. Demand rose for packaging in dietary supplements, such as vitamins, usually packaged in plastic closures.
Understand The Key Trends Shaping This Market
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Food Segment is Expected to Hold a Significant Market Share
- The need for plastic packaging is anticipated to rise in the UAE due to the rising trend of consumer goods, including food, beverages, and medicines. Demand is growing due to the expanding need for portable, practical packaging options. As the country becomes more urbanized, there is a higher focus on sustainability and convenience in packaging. The general trend to move to flexible packaging is to take advantage of processed food packages and adapt to changing lifestyles.
- According to Interpack, one of the prominent packaging trade fairs, 5% of the world's packaged goods are consumed in the Middle East, where business is expanding rapidly. The United Arab Emirates is one of the countries with the highest per capita consumer goods consumption in the world because consumers prefer healthy food and beverages and pay attention to more sustainable packaging.
- The need to provide more eco-friendly packaging grows as packaged food consumption rises. Fortunately, some companies are rising to the challenge and developing innovative and environmentally friendly food packaging that will revolutionize the industry and promote environmental protection.
- For instance, in February 2022, Hotpack, a prominent UAE-based player in the food packaging business, announced that the company would present its sustainable packaging solutions at the Gulfood Summit 2022. The firm altered its packaging specifications so that its products would still be functional, convenient, and affordable while incorporating sustainability and cleanliness.
- Furthermore, as per USDA reports, United States exports of consumer goods to the UAE in 2021 were valued at USD 897.6 million in this retail-dominant market. Among the many goods exported to the UAE are tree nuts (USD 387 million), food preparations (USD 72.3 million), beef and beef products (USD 60 million), dairy products (USD 55.6 million), poultry meats and products (USD 48.5 million), condiments and sauces (USD 44.1 million), and bakery goods, cereals, and pasta (USD 40.1 million). The significant export of food products may demand food packaging companies to increase production, where plastic is preferred to be suitable packaging material.
