Southern Africa Plastic Food Packaging Market Has Troubles

    As the world economy is recovering from the global recession, the plastic food packaging market in southern Africa is also growing. Frost Sullivan, an American growth consulting firm, recently completed a report on the plastic packaging market in Southern Africa, predicting that the plastic packaging market in Southern Africa will grow at an average annual rate of 5% from 2009 to 2016, and that its revenue will reach $1.41 billion by 2016. The plastic market contributed 5% of GDP to the economy of Southern Africa, and solved the employment problem of 35,000 people. In 2009, sales of plastic packaging market in Southern Africa amounted to $1.01 billion, with plastic sales of 763 million tons. Among them, as the leader of plastic packaging market in southern Africa, sales of plastics in South Africa are 650 thousand tons, and sales in Zambia and Botswana are 78 thousand tons and 35 thousand tons respectively. According to sales ranking, the plastic packaging market in Southern Africa mainly involves the following varieties: polyethylene (32.7%), polypropylene (23.1%), polyethylene terephthalate (22.5%), high density polyethylene (15.9%) and polystyrene (5.8%). From the perspective of plastic packaging applications, the largest share of industrial applications in Southern Africa is 50.1%, including tray packaging, recycling boxes, bulk bags, lining, etc. Food and beverage bottles, meat trays, etc. accounted for 34.8%, pharmaceuticals, personal care, etc. accounted for 9.7%, and household applications, such as shrinkage packaging, sandwich bags, accounted for the largest share. Less, only 5.4%. According to experts from China Phenolic Resin Network (www.pf-e.cn), because some countries in Southern Africa have reached free trade agreements with China and India, cheap films and bags from these countries have great competitive advantages in the local market. In order to enhance their competitiveness in the market, local suppliers are forced to depress the price of products in the face of high prices of raw materials, and to make small profits by strengthening after-sales service and improving product quality. Market exchange rates fluctuate frequently in southern Africa, making it difficult for local suppliers to accurately predict plastic prices. Logistics cost is another unavoidable problem in southern African countries. The price of polymer is controlled by multinational suppliers, which is also a big challenge for the market. There are only two polymer manufacturers in Southern Africa, and the capacity building is not yet fully in place. Local supply depends heavily on imports. At the same time, due to a large number of polymer transported to China for reprocessing, which also causes the global polymer market in short supply.