Posted on :Tuesday , 18th September 2018
The African continent has recently emerged as a high growth region for the packaging industry, with demand being driven by increased markets for consumer products, burgeoning individual incomes, an expanding population of youthful consumers and growing domestic economies, particularly in East and West Africa. Indian packaging companies have lately begun to aim at this lucrative and expanding market in a big way.
In recent past, the entire Africa, with its enormous size and the biggest youth population in all the continents showed a big growth for packaging business, and resultantly, Indian companies too started eyeing this huge market. If these Indian companies are successful in capturing a share, the emerging scenario may well be that a chips packet sold in Zimbabwe, a water or milk jar sold in Namibia or paint, edible oil, food or any similar packaged item on a shop counter in any of African countries will have the India connection – either because of packaging sourced from Indian packaging companies or machines sold by Indian manufacturers.
Challenges that the African packaging industry is currently facing are same as those faced in other regions internationally due to changing trends in the global consumer packaging market. These include: a surge in demand for premium packaging; increased demand for biodegradable plastics; increased use of multipacks and small packs; and, a need for sustainability and innovation.
Some people carry the misconceived notion that African growth is dependent on commodities. In fact, most of the fastest-growing economies in Africa don’t rely on natural resources for their economic growth. A good number of countries in Africa are growing at a very fast pace and find place among the top 20 growing countries of the world. Though one factor for this high growth rate is that it is based on a relatively small GDP but with youth on Africa’s side, with nearly one-third of the world’s under 18s living in Africa, it is not difficult to fathom the reasons for growing consumer markets, demands for products and therefore increased opportunities for the packaging industry that serves the manufacturing and consumer sectors.
It is this reality that is driving players from Indian packaging industry to explore the African market. This could be seen from several Indian packaging companies including PET and bottling companies who headed towards Africa to participate in the TPCI lead delegation for the prestigious FDT-Africa trade show, that took place in Gallagher Convention Centre, Johannesburg, South Africa recently, from 4-6 September.
Leading Indian companies from plastic packaging industry that are serving FMCG industry verticals from dairy to liquor, food products, agro chemicals, pharmaceutical, home care and personal care; manufacturers of high speed bottling plants and machinery catering to the liquor, brewery, beverage, natural mineral & packaged drinking water, agro-chemical, paint, edible oils, lube-oil, cosmetics & household products; PET packaging companies including manufacturers of PET perform injection moulds, closure moulds and its component; manufacturers of carton packing machines and closure printing machines, bottle and jerry can printing machines, pails & drum printing machines, laser marking systems for closures and pad printing automation – all have recently begun eyeing the lucrative African market.
Experts opine that the companies wishing to take advantage of Africa’s emerging potential will have to understand their markets, be adaptable and ready to develop packaging solutions that are unique and better rather than merely cheaper.
With increased urbanization and mobility becoming the norm, the move towards small packs and multipacks has gained importance. These products are more conducive as they save shelf space and enable brand manufacturers to provide attractive packaging to encourage sales. Increased health awareness has also led to the rise in demand for glass containers and bottles that offer an aesthetic appeal to people. If Indian companies have to make a dent in the African market, they will have to ensure that they are more innovative in meeting these demands.
This need for sustainability and innovation gets enhanced further by consumer demand for packing materials that are more eco-friendly. Recycled materials that still retain the traditional abilities to resist friction, moisture and heat and keeps products fresher for longer period, will be more in demand in future.
It remains to be seen to what extent the Indian packaging manufactures eyeing the African market will be adaptable to the new market, remain competitive in a market already having competitive pricing and ready to meet changes in global consumer demand so that they are able to make their presence felt in the African market.