The Nigerian Packaging Industry is expected to grow at a CAGR of approximately 8% during the forecast period (2022 – 2031). The Packaging Industry in Nigeria is attracting investments due to the increasing investments in several end-user industries, such as Food Processing Industry, or Cosmetics, and Household Care, amongst others.
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– Also, the growing e-commerce industry, owing to the increase in the youth population, increasing consumer spending, and increasing technology penetration is expected to generate the demand for packaging solutions in the country.
– The Nigerian Packaging Industry attracts investments as it provides several growth prospects to the companies in the packaging industry to provide economical and sustainable packaging solutions across sectors in the country. For instance, Jaro Industries, a subsidiary of Deekay Group, was recently opened in Nigeria to foster carton production, It invested a total of USD 12 million into carton manufacturing to enhance packaging business in the country.
– However, the major challenge faced by the country’s solution providers is the lack of availability of raw materials in the country. Also, the lack of awareness of manufacturers about the need for sustainable packaging solutions for their products is expected to slow down the industry growth.
Key Market Trends
Growing E-commerce Industry is Expected to Provide Growth Opportunities
– Nigeria is witnessing a boom in the e-commerce industry owing to the growing urbanization and consumer spending, and the emergence of several startups in the region. The growing e-commerce industry in the country is expected to proliferate the demand for packaging solutions in the country, such as plastic packaging, carton boxes, corrugated packaging, and many more.
– Moreover, due to the Covid-19 pandemic, consumers are increasingly resorting to e-commerce for the purchase of essential daily items, such as groceries and medicines. These trends are expected to boost the demand for packaging solutions in the country. For instance, the e-commerce platform, Jumia, partnered with the manufacturer of essential goods, RB, to help consumers access hygienic products at the lowest price. Such initiatives are expected to boost the demand for sustainable packaging solutions in the country.
– Also, in September 2022, Jaro Industries, a carton manufacturing company, inaugurated its factory in Ogun State to proliferate the production of carton boxes in the country. This is expected to further enhance the fulfillment of e-commerce packaging needs.
Plastic Packaging Expected to Gain Maximum Traction
– Plastic packaging is considered as one of the most prominently used packaging solution in the country owing to the several benefits it provides, such as rigidity, aesthetic value while maintaining the hygiene of the product stored. Many brand owners are employing recycled plastic packaging to reduce the environmental impact of packaging. Bioplastics are a popular choice for various brand owners.
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– The increasing production of plastic in the country is expected to provide several growth opportunities for the plastic packaging solution providers in the country. For instance, according to euromap.org, the production volume of plastic in Nigeria reached around 411,000 tons in 2015 and is expected to reach approximately 513,000 tons of plastic by 2022. Also, the consumption of plastic in Nigeria increased from approximately one million tons in 2015, to 1.5 million tons of plastic by 2022.
– Moreover, several government regulations regarding the standardization of the recycling process of plastic are expected to regulate the usage of plastic to a large extent. For instance, in October 2022, the Standards Organisation of Nigeria (SON) and stakeholders in the food industry, introduced a standard regarding the recycling of plastic, which would further improve production processes of plastics, ensure safety and the quality of products, leading to an increase of its use, which in turn provides opportunities for employment rather than expending the resources on the importation of plastics.
The competitive landscape of the Nigerian Packaging Market Industry is concentrated owing to the evolving nature of the industry and the presence of few solution providers in the country holding a majority stake. The market players are forming strategic partnerships and collaborations to attract maximum market share in a developing economy.
– January 2022 – AR Packaging acquired RLC Packaging Group, including indirectly a significant share in BSC Drukarnia Opakowań S.A., and Nampak Cartons Nigeria Limited. Through these acquisitions, AR Packaging continues its growth development in line with the strategic plan to expand in selected segments and geographies. The acquisition of the Nigerian operation is an important first step to establish a footprint in the African market, and the Group now has the capability to serve its multinational customers from three continents.
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