With 8% pa average increases in demand over next 5 years, Africa emerging as ‘exciting’ polymer market

22-Oct-14

Large-scale investment in African countries makes the region one of the most exciting markets for polymers in the world today, says Applied Market Information (AMI). In its study into the African polymers market, it forecasts 8% per year average annual increases in African polymer demand over the next five years, with diverse levels of annual growth varying from 5% in South Africa to 15% in Ivory Coast, as reported by European Plastics News. The report acknowledges that Africa is a complex region and that market conditions strongly differ between the well developed North and South African markets and those in most other Sub-Saharan countries. It highlights Nigeria, Egypt and South Africa as the largest markets, currently accounting for nearly half of polymer demand in the continent and for nearly all polymer production in the region. Despite significant investments in new capacity in these three countries, Africa remains a net importer for all resins and is expected to remain so for the foreseeable future. Commodity plastics have a dominant share of the African market, with polyolefins accounting for about 60% of demand. Polypropylene has the largest volume of demand, with the material being widely used for raffia production for bags and sacks. But AMI says PET demand has grown fast as PET bottles for drinks are replacing LDPE pouches which have traditionally been used. The rise in plastics demand has attracted foreign investment in the African industry, especially from China and India, which is expected to carry on in the future. Another key driver for polymer demand is infrastructure development and building activity, with AMI estimating nearly one-quarter of polymer demand in Africa coming from these areas. The expansion of Africa’s middle class is another key factor; for example packaging applications now account for just under half of the polymer market across Africa. However, Africa faces a big challenge in increasing its domestic resin production to displace imports, mainly sourced from the Middle East or Asia. Among the obstacles to higher production are unreliable electricity supplies and political instability.