By Rory Harrington
Increasing demand from the emerging middle class and the growing food and beverage sectors will drive growth for plastic packaging in southern Africa, according to a report from Frost & Sullivan.
Growing affluence among the region’s population has “significantly spurred” growth in the plastics packaging sector, said the research from the market analysts. The study – Southern African Plastics Packaging Market – covers linear low-density polyethylene (LLDPE), high-density polyethylene, polystyrene, polypropylene and polyethylene terephthalate (PET) for the period 2006-2016 in South Africa, Botswana and Zambia.
The group said the long-term outlook for the food and pharmaceutical plastic packaging sectors is “positive” – despite the “significant knock-on effects in fluctuating polymer prices which present major price pressures for suppliers”. Against this, major drivers are said to be the continued uptake of plastic in place of traditional packaging materials and growth in the food and beverage sectors.
“Greater consumer demand for plastics packaging is expected due to the spurt in food and beverage production,” said the report author. “Additionally, the general industrial use of plastics packaging has increased after the global economic downturn and is expected to sustain the demand for plastics packaging.”
Compared to other industries, the Southern African plastics packaging market is expected to witness better growth rates in the short term and consistent growth rates in the medium and long terms, said Frost & Sullivan.
Low cost imports
But it added that local growth was being curbed by low-cost imports from the east – after the South African government signed a trade agreement easing the way for imported goods.
“The import of inexpensive finished goods has increased after the South African government signed trade agreements with China,” explained the analyst. “Furthermore, Southern Africa’s distance from high consumption markets restrains the infrastructural development for plastic exports.”
Growth opportunities in the southern African market will only be realised in the long term, said the report. But packaging suppliers are already being urged to be look at emerging markets in Sub-Saharan countries.
“Suppliers should start tapping into the opportunities in the emerging sub-Saharan African countries and focus on expanding into these markets,” added the analyst. “The recent energy related infrastructural development in these countries will pave the way for industrial growth with potentially lucrative prospects.”
