Successful Plastic Sector Projects Done in East & West Africa
In the past months africon conducted two market assessment projects and one very successful business trip to Kenya for major international players of the plastic packaging sector.
Promising future market in Nigeria
The two market assessment projects had Nigeria as their focus market and more than 100 interviews were conducted with all relevant players of the plastic packaging sector locally.
The results concluded from the analysis of all interviews and market data in Nigeria is very clear: the plastic (packaging) sector in Nigeria is very vivid and growing at a high pace. Nevertheless, the Nigerian market is highly cost conscious. Competition is set on pricing strategy: the cheaper the product, the more sales a company makes. Most manufacturers still shy away from cost increases even marginally. The majority of consumers do not care much about quality as they do have an open eye for the cost.
At the same time the future is certain to come with changes. The upper middle class is expanding and there’s a growing awareness on quality products among Nigerian consumers generally.Any high quality / high price level company entering the Nigerian market will need a targeted product awareness campaign to help realize the market potential for their products. Both end users and converters need some form of education on the use of the products.
Modest expectations in Kenya
For Kenya, which has only a quarter of the population that Nigeria has and which’s BIP is 5 times smaller, the picture looks a bit different. The local production of BOPP film is for example not meeting its expectation in terms of capacity as it stands at around 30,0000 tons per year in Nigeria. Also, the import of machinery to manufacture plastic film stands at $ 87m in Nigeria but only at $ 38m in Kenya. But with the growing food manufacturing sector in both countries it is expected for the plastic packaging industry to grow as well. Since importing ready-made plastic film comes definitely more costly at one point than local production.
For any questions regarding this project please feel free to contact our practice leader Ms Lena Schwoerer.