UAE’s packaging industry reaches $1.84bn in 2011: Report

UAE’s packaging industry which grew at a compounded annual growth rate (CAGR) of 4.27% during 2007–11, touched $1.84bn in 2011, according to a BRICdata report.

During 2012-16, the industry is projected to grow at a CAGR of 4.68% to reach $2.3bn in 2016.

According to the report, UAE's annual consumer expenditure on food, which grew at a CAGR of 14.52% during 2007-11, stood at $23.3bn in 2011 and is expected to grow at a CAGR of 7.12% during 2012-16 to reach $33.7bn in 2016.

The country's growing domestic consumption and diversified exports market contributed to the industry's moderate growth during 2007-11 and is expected to record a similar level of growth over 2012-16.

As observed by the report, the country's GDP per capita exceeded $50,000 in 2009, and is projected to reach $80,084 in 2016, which implies an increase in spending on processed food and consumer durable goods during 2012-16, propelling the growth of the packaging industry.

Abu Dhabi has registered the highest gross domestic product (GDP) per capita in the world and contributes substantially to the country's spending power.

While paper and board was observed to be the largest packaging category in the industry, food and beverage led the end-user market, generating 55% of the market's value in 2011.

The industry relies heavily on exporting to foreign countries due to the UAE's small domestic market and low population, and the long-term sustainability of the industry is linked to the international demand for UAE packaging products.

A government ban on the use of plastic bags in some areas of the country and a more comprehensive ban effective end 2013 is expected to hit consumption of flexible plastics, the report said.

The full report 'Packaging Industry Outlook in the UAE: Market Size, Key Trends, Drivers and Challenges to 2016' is available from BRICdata. Click here for more details.