Middle East packaging firms gearing up for a seismic shift in demand

UAE-based Al Thika Packaging, a leading domestic player, predicts that regional sector demand could double within five years as the food processing sector strives to become more competitive in response to increasing consumer demand for convenience products.

“Automated solutions are being sought as companies try to reduce overhead labour costs and keep up with global supply trends​,” said Tim Ansell, Al Thika’s sales director.

“International trends in food products are coming to market much quicker in the UAE as people see through social media what is being offered elsewhere. It’s prompted this market to react faster to global trends​.”

By increasingly moving into ready meals, pre-packed ingredients and produce, manufacturers are following Western trends. According to Ansell, growth over the past six to seven years has not let up and there is a desire to implement new technology. “The regional industry is more open to innovation​,” he said.

Demand for high-end automation is mostly domestic or from neighbouring giant Saudi Arabia, though there has been some recent pick-up from manufacturers and processors in Oman and Kuwait. 

High-end automation now represents 20% of Al Thika’s sales, with Ansell predicting that number will double within five years. 

“Such is the demand from food, drink and pharmaceuticals businesses that we have had to take on a project engineer to analyse customer requirements and produce integrated solutions and equipment​,” he said. 

“We’ve moved from offering just a tray sealer or x-ray, for example, to providing turnkey production lines with process equipment, conveyors, packaging machines and automated carton erector loaders. Customers want a one-stop service, hassle-free installation and local service, so this is playing to our strengths​,” he said.

According to a recent Euromonitor forecasts, the packaging industry in the Middle East and Africa will grow at a compound rate of 5.5% and see the highest increase in business of any region up to 2019.

This growth, according to Ishida, a leader in the design, manufacture and installation of complete weighing and packing line solutions for the food industry, could be boosted even further by the emergence of export-orientated “power players​” in the Middle East, particularly from snacks and dates manufacturers and poultry producers.

“Apart from rising automation to reduce packaging and waste costs at the manufacturing, retail and end-consumer stages, to increase speed and efficiencies there will also be increasing demand for check-weighers, metal detectors, X-ray inspection systems and seal testers to secure quality control for exports outside the region​,” said Torsten Giese, Ishida’s marketing manager.

He foresees huge changes within food production, all of which will impact the packaging sector: “There will be polarisation. Politically stable countries will experience growth in convenience and ready-to-eat sectors and ‘luxury’ goods while politically unstable regions will fall back to a more agro/self-sufficient positions​.”

Moreover, some large players will expand to produce and distribute their products more efficiently into more regions, he added. These will become regional power players while others will look to expand down or up in the food logistic chain. 

“For example, growers will move into manufacturing and distribution; so potato growers currently producing potato chips and snacks will diversify to include frozen chips and other potato products​,” Giese said.