Market Trends of UAE Rigid Plastic Packaging Industry
Logistics Boom Fueling Surge in Demand for Rigid Plastic Packaging in the United Arab Emirates
- Emerging technologies, environmental regulations, sustainability concerns, evolving customer expectations, and the rise of online business models are shaping the future of the logistics industry. Contributing 8% to the national economy, the UAE logistics industry has been witnessing a significant uptick. According to a report by Arab News in July 2024, demand for industrial and logistics assets in Dubai and Abu Dhabi skyrocketed by 185%Y-o-Y, reaching 18 million sq. ft in the first half of 2024. Key industries fueling this demand include manufacturing (11.7%), construction (11.1%), and logistics (10.2%), together making up a third of the total demand.
- ADQ FWD reports that the UAE logistics market is projected to surpass USD 31 billion by 2026. With a series of robust measures, including legal reforms, trade facilitation, expedited customs clearance, and nationwide digital transformation, the United Arab Emirates is poised to maintain its prime position as the global economy rebounds. Furthermore, significant investments in modernizing maritime ports and airports bolster the nation's logistics infrastructure and resilience. This growth is in line with Dubai’s Commercial and Logistics Land Transport Strategy 2030, which aims to boost the industry’s direct contribution to the economy to AED 16.8 billion (USD 4.57 billion).
- The strategy also envisions a 75% uptick in technology adoption, a 30% cut in carbon emissions, and a 10% boost in operational efficiency. Institutional investors from the United States, China, and Europe are showing heightened interest, drawn by the industry’s global allure and attractive yields of approximately 8.25%.
- This surge has amplified the demand for industrial rigid plastic packaging products, including industrial drums, plastic crates, and pallets. The need for durable and efficient packaging solutions is becoming more critical as logistics operations expand.
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Pharmaceutical Segment to Witness Significant Market Growth
- By standardizing the 'Made in UAE' initiative, the United Arab Emirates successfully introduced local manufacturers to the global market, thereby reducing its reliance on imports and bolstering its export potential. This growth in the manufacturing industry has, in turn, spurred significant investments in the packaging industry.
- In March 2024, Khalifa Economic Zones Abu Dhabi (KEZAD) Group, in collaboration with UAE-based Pharmatrade, inaugurated Pharmatrade’s Abu Dhabi Logistics Centre. With this new facility, Pharmatrade aims to enhance the storage and distribution of its pharmaceutical and medical device products, catering specifically to the UAE’s healthcare industry. The company ensures a steady supply of life-saving and non-life-saving drugs, actively investing to prevent potential shortages.
- As market preferences shift toward generic drugs and other medical products, the trajectory of the UAE pharmaceuticals industry is likely to evolve. Companies are increasingly focusing on manufacturing generics to align with these changing dynamics, which is expected to drive market growth during the forecast period.
- According to the World Health Organization (WHO), healthcare expenditure was USD 21.5 billion in 2022, with projections reaching USD 23.2 billion in 2023. The United Arab Emirates boasts a thriving domestic pharmaceutical manufacturing industry, complemented by the establishment of numerous international pharmaceutical companies. Notably, giants like Pfizer and Janssen EMEA (the pharmaceutical division of Johnson & Johnson) have opted to set up their regional headquarters in the United Arab Emirates.
- This surge in the pharmaceutical industry has heightened the demand for plastic packaging products, such as jars and bottles, ensuring robust and secure packaging for these products.
