The Saudi packaging industry, which was valued at $4.4 billion in 2010, is expected to reach $5.5 billion in 2015. The industry is expected to grow at a CAGR (compound annual growth rate) of 4.58 percent during 2011-15, largely driven by change in consumer lifestyle and growing consumption in the food and beverage sector, an industry report said. Increase in per capita income, busy lifestyle, growing participation of women in the workforce and aggressive marketing from food companies have fueled the demand for pre-packaged food. The food and beverage sector, growing at a double-digit rate, accounts for nearly 75 percent of the total consumption of packaging material in the country. Going forward, the food and beverage sector is expected to continue the growth trend. Per capita consumption of packaging material is expected to increase in the country. Saudi Arabia remains the largest market for food and beverage in the Gulf region representing more than 60 percent of the market in 2010. With the government's emphasis on the food security plan to achieve self-dependence and security, the share of agriculture produce in the total GDP of the country, which was 3 percent in 2009, is expected to grow. The Kingdom requires further growth in its food processing and food packaging technologies to achieve self-sufficiency in the food sector, which will be a boon for the packaging industry. This has been and is expected to remain a major factor behind the packaging industry's growth in the Kingdom. The domestic competitive landscape in the packaging industry is dominated by local companies. Only a few foreign companies exist through joint ventures with or acquiring shares of domestic companies. The private consumption expenditure (defined as the purchase of goods and services for consumption by domestic private households) has shown a healthy growth of 8.2 percent in 2009, well ahead of the global average of 6.4 percent and is expected to grow at 8 percent in 2010 and 2011. With increased expenditure of households in the Kingdom on the purchase of goods and services, consumption of packaging material will also increase in tandem.
