Market Trends of Middle East & Africa Glass Bottles And Containers Industry
Pharmaceuticals Segment is Expected to Register the Highest Market Share
- In the MENA region, the healthcare industry has tightened regulations on drug delivery products, highlighting the growing importance of biotech and cost-sensitive medications. Pharmaceutical glass manufacturers are increasingly investing in packaging solutions aimed at extending product shelf life.
- Governments in the region are promoting public-private partnerships to enhance healthcare infrastructure and services. Key pharmaceutical companies are expanding their footprint in the Middle East, particularly in Saudi Arabia (KSA), the United Arab Emirates (UAE), and South Africa, driving market growth. Alpen Capital, a financial advisory firm, reported that healthcare spending in the UAE was USD 19.7 billion in 2020 and is projected to hit USD 26.9 billion by 2025. This uptick in healthcare spending could present opportunities for container glass in the sector.
- As noted by the World Economic Forum in March 2023, African countries, which have faced challenges like unequal vaccine distribution and a dependence on imported medicines, recognize the importance of developing a strong domestic pharmaceutical industry. With the African Continental Free Trade Area (AfCFTA) agreement now active, there's potential for a significant boost in Africa's pharmaceutical trade, largely driven by intra-African commerce.
- Additionally, many companies are looking to expand in Middle Eastern countries to increase local production of vital medications, thereby heightening the demand for container glass. In September 2024, AstraZeneca Egypt announced a USD 50 million investment in pharmaceutical production. Currently producing 900 million tablets yearly, AstraZeneca has set its sights on increasing output to 1.29 billion, subsequently driving up the demand for glass containers in the area.
- Moreover, data from the Saudi Food & Drug Authority (SFDA) highlights that advancements in clinical trials and the adoption of artificial intelligence in manufacturing are key catalysts for Saudi Arabia's expanding pharmaceutical market. The market's value jumped from USD 5.4 billion in 2021 to USD 8.5 billion in 2023, driven by a growing population and rising demand for chronic disease treatments.
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South Africa is Expected to Experience Significant Growth
- As the demand for both alcoholic and non-alcoholic beverages rises, so does the need for glass packaging. Glass is often preferred for its superior ability to preserve flavor and freshness. With a growing emphasis on sustainability, consumers are gravitating towards eco-friendly packaging solutions. Given that glass is recyclable and considered more environmentally friendly than plastics, many companies are making the switch to glass packaging.
- In South Africa's container glass industry, two dominant players hold sway. Consol Glass, the more prominent of the duo, boasts a commanding share of approximately 75-80% of the domestic market. In contrast, Nampak Glass secures 20-25% of the nation's container glass demand. (Source: Glass Online).
- In November 2023, Ardagh Glass Packaging-Africa (AGP-Africa) ignited the N3 furnace at its production facility located in Nigel, Gauteng, South Africa. Completing a significant R 1.5 billion (USD 0.08 billion) mega-project on schedule and within budget, just over a year post-approval, is a commendable feat for all stakeholders. The unveiling of the Nigel 3 (N3) expansion followed the operational commencement of the N2 expansion project at the same site. This new furnace, coupled with four production lines, amplifies the facility's output by 50%. As a result, Nigel now stands as Africa's largest glass container production site and ranks among the world's most extensive and efficient facilities.
- Additionally, the rising consumption of alcoholic beverages in South Africa plays a crucial role in driving this demand. Data from IWSR, a London-based information services firm, highlighted a 9% surge in beer consumption in South Africa for 2023. This increase is linked to rapid urban expansion and younger populations migrating to major cities, enhancing accessibility to alcoholic beverages.
- Moreover, Statistics South Africa indicates that the Consumer Price Index (CPI) for alcoholic beverages and tobacco rose from 111.1 in September 2023 to 115.7 in July 2024. This uptick in beverage prices, coupled with average demand across the nation, underscores the growing appetite for container glass.
- Increased consumer spending in South African restaurants and cafes has spurred demand for container glass products, including bottles and bowls. Statistics South Africa notes a rise in food sales from restaurants and coffee shops, jumping from USD 143.87 million in January 2024 to USD 156.04 million in March 2024.
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