Saudi Arabia’s Strategy for the Flexible Packaging Industry
The flexible packaging value chain is a highly competitive one, with strong resin suppliers at one end and powerful "Big Box" buyers at the other end. As the intermediary between the two, a packaging producer's keys to survival are raw material cost and to a lesser extent, logistics. Currently the international export market for packaging is being increasingly supplied by plastic bag manufacturers in China and the rest of Asia, where there is no fundamental reason for raw material advantage and logistics hurdles exist for shipping to major markets in Europe and North America.
In raw material costs, Saudi Arabia should have a fundamental advantage in the future with increasing competition within domestic resin supplies. Additionally, export logistics to other GCC and European regions are also advantaged compared to Asian manufacturers.
Current packaging producers within Saudi Arabia are focused on local consumption. They are small plants with smaller line sizes which make them less competitive in the export market. The flexible packaging cluster will develop a strategy and anchor projects to create highly efficient export-oriented competitors in Saudi Arabia.
For more information or to explore how your business may take advantage of these opportunities please contact us.
