Packaging industry thrives on Dubai’s growing f&b trade

DUBAI- Dubai’s flourishing food & beverage sector and significance as an exports and re-exports hub have helped the local packaging industry grow and expand to strategic foreign markets, shows recent trade trends highlighted by Dubai Exports, the export promotion agency of the Department of Economic Development (DED) in Dubai.

Dubai’s total foreign trade in packaging was around six billion dirhams in 2013 of which AED 2.5 billion was exports while re-exports accounted for half a billion dirhams. Since half of all packaging is used for food and a further 18 per cent for beverages, growth in the packaging industry is directly linked to the food & beverage trade.

Mohammad Ali Kamali, Director of Export Markets Development in Dubai Exports, stated: “It is natural for the UAE to have a large packaging sector bearing in mind it has a strong food and beverage industry that is growing. We have actively promoted our food and beverage sector in global markets because it also supports allied industries such as packaging.”

Dubai Exports is concentrating on packaging at a time when the global packaging market is valued at US$800 billion (AED 2.936 trillion) and growing at three per cent in real terms, driven mainly by hygiene concerns, increasing urbanisation and move towards convenience foods. Together, the foods, healthcare, cosmetics sectors worldwide consume 79 per cent of the packaging products.

“The key export markets for Plastic Packaging from Dubai was GCC countries, chiefly Oman and Bahrain, which together imported AED 132 million worth of packaging. The major markets for Sheets & Films were Europe and USA. Germany and USA imported AED 330 million worth of Sheets and Films from Dubai,” Kamali said.

The bulk of sales of packaging are concentrated in Asia, which accounted for 36 per cent of the total in value followed by North America and Western Europe with shares of 23 per cent and 22 per cent respectively. Eastern Europe (6%) and South and Central America (5%) are the other leading consumers while the Middle East represents three per cent of the global demand and Africa and Australasia each hold a two per cent share.

Kamali added that Dubai Exports recently took around eight local firms to Interpack 2014 exhibition held in Germany to help them connect to potential markets and learn about the latest innovations in packaging. The exhibition, held in 19 halls of the Düsseldorf Exhibition Centre, had 2,700 exhibitors and attracted 175,000 visitors and the Dubai firms participating were able to attract 188 international leads.

“The participants were also able to gain better understanding of the innovative technologies and concerns in the global packaging industry, especially those relating to safety, quality and sustainability. The greatest innovation is in the development of halal packaging, which is set to increase considerably with the help of halal certification,” Kamali said.

Globally, packaging firms are now incorporating aspects such as RFID (Radio Frequency Identification) technology that allows both the producer and customer to track and trace the products throughout the value chain.

Sustainability concerns have inspired the packaging industry to not only produce recyclable and biodegradable products but also minimize waste and energy consumption. Another important development is the use of nanomaterial which allow certain environments to be created within the packaging.