Although the packaging industries in developing markets are faring better than those in advanced and highly developed countries like the US and the UK, there are numerous challenges on the horizon for this year.
Deloitte partner Roy Campbell said Africa was rising in the packaging market stakes and that the industry would continue to grow as new opportunities were found.
Assisting with this growth was the forecast that gross domestic product (GDP) growth in sub-Saharan Africa would be 4% this year, above the global average.
“One of the major factors that will contribute to further growth is the fact that Africa has youth on its side. The continent is presently home to 25% of the world’s under 18s and it is expected that this will grow to 50% of the global total by 2100,” he noted.
However, the impact of China on sub-Saharan Africa could not be ignored, with Campbell stating that there was a direct correlation between the economic fortunes of China and that of sub-Saharan Africa.
He added that when Chinese GDP growth dropped, it was followed by a corresponding drop in sub-Saharan Africa’s growth.
“China is in the process of rebalancing its economy and these structural reforms are having an impact on global markets. The impact on resource-rich African economies has been particularly felt as the Chinese move from an investment-driven economy to one in which consumer and services feature more strongly.”
Campbell advised packaging companies to focus on creating better rather than cheaper products and to pursue revenue growth ahead of cost cutting measures.