The partners will build a new facility in Jeddah, and will produce Linpac-branded rigid and flexible packaging for fresh meat, targeting customers across the GCC and wider Middle East. Zultec, the local partner, has an existing packaging operation in its portfolio, producing labels and flexible packaging.
Further expansion on the cards
”We are delighted to formalise our relationship with the Zultec Group. Zultec has a long history of serving the Middle East food industry and has a deep local knowledge, which when complemented by the Linpac packaging portfolio and intellectual property, creates a powerful opportunity for both companies. We aim to continue to invest and develop the relationship by establishing further extrusion and thermoforming capabilities in the region as the business grows,” said Daniel Dayan, chairman and CEO of Linpac.
Zulqiurnain Ali Khan, Zultec president and CEO, said: “We hope to add value to the Saudi economy through this cooperation by bringing world-class standard packaging solutions to the food industry, while creating employment and providing training to Saudis.”
Booming poultry market
Production of fresh meat, particularly poultry – and so the market for packaging producers – is booming in Saudi Arabia, with the US Department of Agriculture forecasting growth of 8% in broiler production for 2015, to reach 700,000 tonnes. Saudi Arabia has an official policy to become self-sufficient for poultry meat and move away from importing frozen chicken, leading to a boom in poultry production – firms such as Almarai have invested heavily in new poultry facilities.
“Saudi Arabia has taken significant steps to develop local poultry production capacity to boost the country’s food security. Local production in the Kingdom is forecast to grow by as much as 50 percent over the next decade,” said Malachy Mitchell, managing director of agribusiness consultancy Farrelly & Mitchell, in a research note earlier this year.
Qatar and Saudi Arabia have the highest per-capita poultry consumption levels in the world, with Saudis consuming around 45kg of the meat a year.
The joint venture with Zultec is not Linpac’s first foray into Saudi Arabia: two years ago the firm announced a deal to supply an unidentified poultry producer with its products. The agreement saw Linpac provide PET trays for the producer’s new Mondini vacuum skin pack lines.