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Analysis of the Future Development Potential of Kenya Packaging Industry
- Feb 28, 2018 -

It is reported that post-harvest losses due to inadequate packaging and lack of proper processing techniques are as high as 30%, while up to 70% of fruits and vegetables have to be wasted.

The overall increase in per capita income in Kenya has led to increased consumption of packaged foods and FMCGs. This has a direct impact on the rapid growth of its plastic packaging market.

However, there are several different market forces that affect the future potential of plastic packaging in Kenya. It is reported that at present, the raw materials for plastic packaging in Kenya are almost totally dependent on imports. Therefore, establishing strategic partnership with raw material suppliers and strengthening recovery measures will help to reduce the expenditure on imported plastic resins.

In the plastic packaging market in Kenya, polyolefins are the highest-paid materials in the field of materials. PET is the second most expensive plastic resin next to polyolefins and is expected to dominate the market due to its widespread use in food and beverage packaging.

The African packaging industry will grow substantially in the coming years

As stated in the Africa Review magazine in December 2016, the business of the African packaging industry will soar in the coming years and global packaging equipment suppliers are competing to take advantage of this consumer-led growth.

According to Africa's BigSeven (AB7), Africa's largest food and beverage show, the key food and beverage markets in sub-Saharan Africa grew by 18% in 2015. In the next two decades, the urban market in the region is expected to quadruple its growth. The growth of the packaging industry in sub-Saharan Africa benefits from the most favorable demographics in the world: Africa has the youngest population of all continents.

It is estimated that one third of the 1.2 billion people in sub-Africa are middle-class consumers. Italian packaging machinery manufacturers Association Ucima predicts that by 2018, the global demand for packaging machinery increased by about 4.9% a year, while most of the growth in demand will come from Africa, second only to Asia.

Demand for packaging is strong in South Africa and the first beverage carton recycling facility in the continent, co-founded by TetraPak, a global provider of food packaging solutions and GayatriPaMills of South Africa, was recently launched at Germiston. South African packaging manufacturers also upgraded their equipment by introducing a fully electric blow molding machine. PolyoakPackaging is South Africa's largest hard packaging manufacturer, with eight branches and 32 manufacturing plants.

The other two leading regional packaging markets in Africa are the predominant East African market in Kenya and the Nigerian-dominated West African market. In the summer of 2016, IshidaEurope signed a cooperation agreement with Allwin Packaging International in Kenya, the top supplier of packaging machinery, to announce its entry into the East African food market.

IshidaEurope is the world's leading supplier of automation solutions. It designs, manufactures and markets a wide range of machines and offers integrated, complete packaging lines for fresh and fast food applications. The company recently introduced a series of new multi-headed weighing machines and checkweighers and is seeking distribution in the East African market. AllwinPackagingInternational will act as IshidaEurope's agent in the region and, together with IshidaEurope, will help and support the growth of East African food manufacturers through the efficient use of automation in markets such as snacks, nuts, grains, beans and sugar.

Development of the packaging industry in Kenya

(1) Kenya metal packaging industry

Annual demand for steel in Kenya is estimated at about 480,000 to 600,000 tons, about one tenth of which is imported from South Africa. The demand for steel products in the region has been growing rapidly in the past decade.

It is worth mentioning that Kenya has developed the largest and most advanced steel industry in the region and that is why all its neighboring countries have come to Kenya to meet their metal packaging needs.

At present, the major metal packaging manufacturers in Kenya include Friendship Containers Manufacturer Limited (FCML), Nampak Kenya Limited and GreifKenya Limited.

(2) Kenya plastic packaging industry

Companies in the field of plastic in Kenya have good technology in injection molding, blow molding, injection stretch blow molding (ISBM) and blown film extrusion. The industry is also the most competitive because many businesses fight for the same market. According to ITC's 2008 report, due to economic growth, demand for plastic packaging materials in Kenya has been increasing.

It is reported that a total of 173 industries belong to the plastic and rubber sub-sectors. There are 134 companies in the plastics industry alone. At present, the major plastic packaging manufacturers in Kenya include Blowplast Limited, Thermoppack Limited, General Plastics Limited, Printpack Kenya Limited and ElgonKenya Limited.

(3) Kenya paper packaging industry

According to the 2008 Kenya Manufacturers' Association, Kenya can convert about 250,000 metric tons of paper per year. The industry's total turnover of 40 billion shillings, employs about 13,000 people. Kenya is capable and therefore manufactures many paper packaging materials.

In general, there are four paper mills in the East African Community. But these are not enough, so the Kenyan government should ensure that the paper packaging industry is revitalized.

At present, the major paper packaging manufacturers in Kenya include East African Packaging Industries Limited, Dodhia Packaging Limited and Allpack Industries Limited.

(4) Kenya Packaging Machinery Market

At present, the main suppliers of the packaging machinery market in Kenya include ASL and Signode Packaging Systems Systems Limited.

(5) Kenya Printing and Labeling Market

Kenya's label industry is highly competitive, and most companies are not allowed to compete and survive with modest profits. Key industry players include: Manipal Press, InteralabelsAfrica, LabelCraft (PaperConvertersLimited), LabelConverters Limited, ColourLabelsLimited, PaperHouseofKenya, GeneralPrinters, CartonManufacturers, Kartasi Industries, Dofran Limited