In Saudi Arabia for example, electricity costs are a fifth of those in many European countries, while natural gas costs can be less than a twentieth – a key consideration when considering where to place energy-intensive, new high-capacity plants.
In addition, in Saudi Arabia alone, ten major new steam crackers for producing polyolefins are estimated to have come on-stream in the past few years, and with around three million tonnes of new polypropylene being made available in just the last two years, the price of this key raw material for spunlaid nonwovens has fallen dramatically – to half or even a third of its cost in mid-2008.
While there are some manufacturers of spunlaid nonwovens already in the region – including regular exhibitors at the INDEX nonwovens show held every three years at Geneva Palexpo – technologies for both nonwovens and films for hygienic disposable products are still rare.
Interestingly, according to a study just completed by CMAI, Iran will also emerge as a new power in the polyolefins market between now and 2013, and at the last INDEX show in 2008, the first nonwovens producer from Iran made its debut.
Comprising eight production plants, the Nikoo Group is a significant employer in Iran, with 1,400 employees, and has won government awards for its contribution to the country’s export trade. The group is one of the few to manufacture 100% bleached cotton spunlace nonwovens based on the country’s abundant cotton, and is also a major manufacturer of thermobonded nonwovens for hygiene, from polypropylene, polyester, bicomponent and hollow fibres.
Given the current political climate, this group is playing a pivotal role in establishing trade relations with Europe, and has already established sales and distribution for its products in Turkey, Italy, Germany, Belgium and Russia.
Market factors also add to MENA’s attraction. While the global economy grew by as little as 1% in 2009 – and for the first time in 50 years all developed economies experienced declines – the MENA countries generally achieved growth of between 3.5 and 5%.
Speaking at the last EDANA Middle East Symposium held in Dubai, Mahdy Katbe, executive director of Unicharm Gulf Hygienic Industries divided MENA countries into three distinct categories:
- Those that are resource-poor and labour adequate, such as Jordan, Egypt, Tunisia, Lebanon and Morocco.
- Those that are resource rich and labour adequate like Iraq, Yemen, Algeria and Syria.
- Those that are resource rich and labour inadequate, including the UAE, Qatar, Saudi Arabia, Oman, Bahrain and Kuwait.
Needless to say, the third category – falling under the remit of the Gulf Cooperation Council (GCC) – have the best growth prospects, with less than half the population but more than double the GDP of the others.
The GCC also has over half of the world’s proven oil reserves and a quarter of its gas reserves, with Qatar expected to produce a third of global 2010 gas requirements.
There are believed to be very strong opportunities in the healthcare sector in these countries, with living and health service standards improving and consumers demanding Western quality products throughout the region.
This high level of consumer pressure has led to corresponding levels of government expenditure, particularly in Saudi Arabia and the UAE, due to their larger populations.
Saudi Arabia plans to double the number of its hospitals to 500 over the next seven years and the UAE healthcare spend is projected to increase from $3.2 billion to $11.9 billion by 2015. Kuwait is also building three ‘medical cities’ and Dubai’s annual ‘Arab Health’ trade show now attracts 45,000 visitors.
The Middle East is now looking globally for the right solutions to achieve zero healthcare-acquired infections in its new hospitals, to which advanced nonwovens can certainly contribute.
According to studies by Euromonitor, the overall MENA market for hygiene products including diapers, femcare and adult incontinence products is currently achieving annual growth of 7% per year, compared to 2% in West Europe and 3% in the USA.
The big growth products in the MENA region in the past couple of years have been heavy incontinence products (up 36%), impregnated wipes (up 22%), disposable pants (up 19%), light incontinence (13%) and all-purpose, baby and window wipes with growth (11-12%). Ultra-thin towels with wings and tampons have also both grown at 8-9%.
Within MENA, the UAE has had the highest annual growth of 11% in sales of these products, with Saudi Arabia at 7%, and Egypt and Iran at 6%. The remainder were in the 2-4% growth range.
One company to invest in new manufacturing facilities in the MENA region recently is Italy’s Pantex, which has set up a plant for the perforation of nonwovens in UAE.
In summarising the advantages, the company points out that there are 340 million people in the MENA countries, with a common culture and, for the most part, a common language throughout the 18 countries.
The birth rate is also high – ranging from 15 to 42 births per 1,000 people – which suggests good growth opportunities for diapers too.
As far as the diaper market is concerned, there is still insufficient finishing technology in the region – in respect of such areas as perforation, printing, laminating, hook and loop application, SAPs and packaging design – which has been the key driver in respect of the new Pantex investment.
