Market Trends of Egypt Plastic Packaging Films Industry
Polyethylene Terephthalate (PET) is Expected to Witness Significant Growth
- The Egyptian plastic packaging film market is driven by numerous macroeconomic factors, such as changing lifestyles, rising urban populations, rising economic activity nationwide, and increased online retailer penetration, which are anticipated to propel the market. Also, the increasing demand from the food, beverage, and pharmaceutical sectors is expected to drive the demand for flexible plastic packaging.
- To address such demand growth, in April 2023, Flex P Films Egypt, a subsidiary of Indian flexible packaging materials company UFLEX, laid the cornerstone for its polyethylene terephthalate factory, Flex PET, in the industrial zone in Sokhna. According to a September 2022 Zawya Projects report, the company is investing USD 110 million to build a polyester resin manufacturing facility in Egypt.
- The new factory will boost the local production capacity of polyethylene terephthalate (PET) films, ensuring a steady supply to meet the rising demand for packaging materials. This can reduce dependency on imports and enhance supply chain reliability.
- The strong performance in plastic exports demonstrates Egypt's established market presence and expertise in the plastic industry. This can provide a solid foundation for expanding into PET plastic packaging films, leveraging existing relationships and market knowledge.
- UN Comtrade data highlights plastic as the leading exported good, commanding a value of USD 2.29 billion in 2023, surpassing other packaging materials.
- The high volume of plastic exports suggests that Egyptian manufacturers benefit from economies of scale. This can reduce production costs for PET plastic packaging films, making them more competitive in both domestic and international markets.
Understand The Key Trends Shaping This Market
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Food to Witness Significant Growth
- Growing populations increase FMCG consumption, especially food items. This drives the demand for durable plastic packaging films. As consumers rise, the need for efficient packaging solutions becomes more critical. Plastic packaging films offer the necessary durability and efficiency, making them a preferred choice in FMCG.
- Tayf Egypt reports that Egypt, boasting a population exceeding 84 million, is the Middle East's largest market. With a populace nearing 100 million and an annual growth of approximately 2 million, Egypt remains a lucrative hub for retailers and fast-moving consumer goods producers.
- Increased spending on food and beverages, often reflected in a higher CPI, can signal potential growth in the industry. Notably, the food and beverage sector leans heavily on plastic packaging films for crucial functions like product preservation, transportation, and display. These films play a vital role in extending the shelf life of products, ensuring they reach consumers in optimal condition. Additionally, the use of plastic packaging films aids in maintaining the quality and safety of food and beverages during transit, thereby reducing waste and enhancing customer satisfaction.
- In April 2023, Egypt's urban areas witnessed a notable uptick in the consumer price index (CPI) for food and non-alcoholic beverages, climbing to 201.2 points, up from 196.9 points in the preceding month, as reported by CAPMAS.
- As prices rise, consumers may seek out packaged goods that offer longer shelf life and convenience, leading to higher demand for plastic packaging films used in food packaging.
