Market Trends of south africa adhesives Industry
Plastic packaging with nearly 79% of the overall production will dominate the packaging industry
- The demand for quick and on-the-go packaged items is increasing due to consumers' busier lifestyles, greater spending power, and related factors. In today's competitive FMCG market, it has become inevitable for companies to use attractive packaging and offer innovation in their packaging to stand out from their competitors and maintain their brand in the market. Consumers and manufacturers prefer paper and paperboard packaging instead of plastic packaging. This factor is likely to result in increased use of paper-based packaging and its adhesive usage. In 2021, paper and paperboard packaging accounted for 21% of total packaging, amounting to 9.7 million tonnes of packaging, and it is expected to register a growth of 3.83% during the forecast period.
- Due to the COVID-19 pandemic, the country-wide lockdowns and temporary shutdown of manufacturing facilities caused several issues, including disruptions in supply chains and import and export trade. As a result, the country's packaging production registered a stagnant growth of 0.91% in 2020 compared to the previous year, significantly affecting the market. Packaging production is majorly driven by plastic in the country, which accounted for 36.2 million ton or around 79% of the packaging produced in 2021. With the advancement of plastic recyclability, the plastic segment is likely to maintain its growth and register a 3.17% CAGR during the forecast period.
- The growing interest in public health issues during the post-pandemic period, along with the emerging e-commerce activities across the nation, is likely to boost the growth of the food processing industry, which will further drive packaging demand over the coming years.
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Growing popularity of electric vehicles will proliferate automotive production
- The South African automotive sector comprises 22 businesses that manufacture cars and commercial vehicles. Among these are seven major vehicle manufacturers/assemblers [car and LCV] and several medium and heavy commercial vehicle assemblers [MCV, HCV, and buses]. In addition, 21 enterprises are involved in importing and distributing new automobiles in the country. There are over 500 automotive component suppliers, with 180 being first-tier suppliers. BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and Volkswagen are the primary drivers of the value chain. These firms significantly impact the economy of Gauteng, the Eastern Cape, and KwaZulu-Natal. These OEMs, together with their suppliers, are at the heart of the three regional clusters, and their socioeconomic contribution is critical to the social upliftment of these areas.
- In 2019, the country recorded about 6,31,921 units of vehicles produced, which drastically reduced to 4,47,213 units in 2020, accounting for a decline of about 29% owing to the COVID-19 pandemic. Due to this, the variation in automotive production between 2019 and 2021 was about -21%, whereas the variation between 2020 and 2021 was recorded at about 12%.
- Over the years, the use of internal combustion engine (ICE) vehicles has contributed significantly to problems such as climate change, environmental pollution, and increased cost of gas. The automotive industry in South Africa is among the highest CO2 emitters, responsible for approximately 20% of total emissions and the third highest contributor to air pollution. Owing to this, the industry has adopted alternatives such as EVs due to their simplicity and technological advancements, which ensure low emissions.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Rapid growth of civil aviation to boost the aircraft component production
- Import dependency will likely flatten the growth of footwear production
- Government initiatives for residential projects to escalate construction works
- Import dependency and lower consumption rate to flatten the growth of furniture production
