(Africa-Trade Research Center News) Applied Market Information (AMI), a UK-based market research company, recently stated that large-scale investments in African countries have made the region "one of the hottest polymer markets in the world today."
The company released a survey report on the polymer market in Africa, predicting that the average annual growth rate of polymer demand in Africa in the next 5 years will reach 8%, and the growth rate of various countries in Africa varies, of which South Africa’s annual growth rate is 5%. Ivory Coast reached 15%.
AMI said frankly that the situation in the African market is complex. The markets in North Africa and South Africa are very mature, while most other sub-Saharan countries are very different.
The survey report listed Nigeria, Egypt and South Africa as the largest markets in Africa, which currently account for nearly half of Africa's polymer demand. Almost all plastic production in the region comes from these three countries.
AMI mentioned: "Although these three countries have invested heavily in new capacity, Africa is still a net importer of resin, and it is expected that this situation will not change in the foreseeable future."
Commodity resins dominate the African market, and polyolefins account for about 60% of total demand. Polypropylene is in greatest demand, and this material is widely used in the production of various bags. But AMI claims that PET demand is growing rapidly because PET beverage bottles are replacing traditional low-density polyethylene bags.
The increase in demand for plastics has attracted foreign investment into the African market, especially from China and India. It is expected that the trend of foreign capital inflows will continue. Another key factor driving the growth of polymer demand is the vigorous development of infrastructure development and construction activities. AMI estimates that nearly a quarter of Africa's plastic demand comes from these areas. The growing African middle class is another key driving force. For example, packaging applications currently account for slightly less than 50% of the entire African polymer market.
However, Africa is facing major challenges in expanding local resin production to replace imports, which are currently mainly imported from the Middle East or Asia. AMI said that obstacles to the expansion of production include unstable power supply and political turmoil.
The China-Africa Trade Research Center analyzes that the prosperity of the African infrastructure industry and the consumer demand from the middle class are key factors that boost the growth of the African plastics industry, making Africa one of the hottest polymer markets in the world today. Related reports show that Nigeria, Egypt and South Africa are currently Africa's largest plastic consumer markets, currently accounting for nearly half of Africa's polymer demand. The rapid growth in demand for plastics in Africa has also attracted foreign investment from China and India to the African market. It is expected that this trend of foreign investment inflows will continue.
