markets report | African plastics demand
in North Africa, demand is expected to grow very strongly in the future. This will help drive demand for more engineering polymers, which at present account for less than 3% of the polymers used in the region. Another key driver for polymer demand is infrastruc-
ture development and building activity, which is particularly important for the development of pipe extrusion and related products. Access to clean water is among the top priorities for many African governments, which is driving demand for pipe and water storage facilities. AMI estimates that nearly one-quarter of polymer demand in Africa is for building and infrastruc- ture related products. A growing middle-class and the resulting increase in
Car production is growing in Africa: this Renault-Nissan factory in Morocco produces Dacia models
production for bags and sacks. However, PET resin has been one of the fastest growing markets where the growing use of PET bottles for drinks is replacing LDPE pouches which have traditionally been used.
Key growth drivers
The attractive growth in demand for plastic products seen during recent years in Africa has attracted abundant foreign investment, especially from China and India, which is expected to carry on in the future. Investment is largely driven by a desire to replace imported fi nished plastics products and as a result over 10% of polymer demand in Africa is accounted for by household products. In addition there is some offshor- ing by European companies, especially in North Africa. The development of duty free zones, again largely in North Africa where goods can be easily shipped to Europe, is also encouraging investment in plastics processing operations.
Automotive and electronic applications are still very small in the region. However, with assembly and manufacturing investments from companies like Foton and Nissan in sub-Saharan Africa, and Renault-Nissan
Distribution of polymer demand in Africa
Other East Africa
Other South/ Central Africa
South Africa Kenya Egypt Other West Africa Algeria Nigeria Other North Africa
disposable incomes are also playing an important role in driving plastic demand. It is generally believed that when an individual becomes more affl uent the fi rst thing they do is improve their house, the second is to buy a television and the third is to buy a refrigerator – all items that tend to make use of lots of plastic material. Owning a refrigerator also means that they can buy more packaged/processed/prepared foods. Rising wealth also drives the development of
organised retailing and the selling of food via super- markets. In Africa much of food retailing is still a mix of traditional markets and small privately-owned shops where product is sold unpackaged. Packaging applica- tions account for just under half of the polymer market across Africa. Growing urbanisation will be another factor that will drive the demand for organised retail across the continent. Urbanised populations tend to have smaller households and more working women which will all impact on demand for packaged foods. It will also have implications in terms of building methods to ensure more energy effi cient and safe dwellings. There will also be a secondary need to improve logistic systems and transport structures to bring consumer products, services and food to the urban areas. All of this will be of signifi cant benefi t to the plastics processing industry.
Key challenges
Lack of suffi cient local polymer production is the biggest challenge faced by the African plastics processing industry with most companies reliant on resin imports, mainly sourced from the Middle East or Asia. Exchange rate fl uctuations of local currencies against the dollar add further uncertainty to the market, making it harder to compete against cheaper Chinese imports. In general, power supply in Africa is tight but also erratic and unreliable in many countries, which can dramatically reduce effective utilisation. Most
18 COMPOUNDING WORLD | August 2014
www.compoundingworld.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80