Saudi Arabia is one of the largest markets for the packaging industry in the Middle East. Factors such as the country’s large consumer base and wide-ranging industrial activities (except for the oil and gas industry) coupled with growing focus on sustainability and the ban on single-use plastic packaging over other packaging solutions have contributed to the country’s preference for paper and Rapid growth in demand for cardboard packaging.
Recycling becomes a trend
The growth of the market is attributed to the increasing focus on sustainability and the ban on single-use plastic packaging over other packaging solutions. Hence, increasing demand for customer-friendly packaging and enhanced product protection is expected to encourage paper and paperboard packaging to become a viable and cost-effective solution in Saudi Arabia, as people shift focus towards eco-friendly and sustainable development, among which folding paper
The demand for boxes is increasing in Saudi Arabia in various industries such as food & beverage, healthcare, personal care, home care, retail, etc. Consumer awareness towards sustainable packaging preferences, availability of raw materials, light weight, biodegradable and recyclable properties of paper, and deforestation drive the demand for this packaging type in the region, and demand for recycling will further drive paper as a packaging material Consumers and businesses alike are looking for solutions that help reduce costs and keep the environment safe while keeping government regulations intact.
In February 2021, packaging giant Tetra Pak launched a new initiative that is expected to raise awareness of the importance of recycling by collecting used folding carton packaging and recycling it. These initiatives pave the way for better use of recycled materials such as cardboard boxes by the Saudi Arabian community, thus offering huge room for growth. In addition, some regional cosmetics are also packed in folding cartons. Rising consumer awareness towards environmentally friendly and cost-effective options has increased the demand for folding cartons for face creams, lipsticks, perfumes, deodorants, moisturizers, and more.
Development of retail industry drives the paper packaging market
The retail market in the country is witnessing significant growth, thereby driving retail packaging (RRP). According to the United States Department of Agriculture (USDA), retail sales of packaged food in Saudi Arabia will exceed $20 billion in 2021. Saudi Arabian consumers are becoming more conscious about food and beverage choices due to their growing demand for new products and being very health conscious.
Online food purchases, coupled with growing food delivery services, are expected to drive demand for sacks, kraft paper, folding cartons and liquid cartons. According to the Saudi Arabian General Investment Authority (SAGIA), spending on food services is expected to grow at an annual rate of 6% through 2021. In addition, prominent players in the food and beverage manufacturing industry are expanding their presence in the country.
For example, in December 2021, Danish dairy company Arla Foods, which owns brands such as Lurpak, Puck, Kraft and The Three Cows, invested more than 64 million in new production lines in Saudi Arabia. The investment is expected to increase Arla Foods’ production capacity in Saudi Arabia by 10%. RRP has become one of the key areas of change in the retail industry as retailers are constantly looking for ways to increase efficiency and shelf availability. While corrugated packaging previously dominated retail packaging (RRP), the demand for reduced size is likely to provide more significant opportunities in folding carton packaging formats, thereby driving market growth.
