Gulf Printing and Packaging’s Folding Paper Packaging Facility, Abu Dhabi, United Arab Emirates

McDonalds Al Khat packaging

Gulf Printing and Packaging, a new subsidiary of Kuwait-based printing and packaging material producer Al Khat Packaging Company (Al Khat), initiated the construction of a new packaging facility in Khalifa Industrial Zone (Kizad) in the UAE, in February 2016.

The investment is a part of a 50-year land-lease agreement signed by Al Khat with Abu Dhabi Ports, the operator and manager of Kizad, in June 2014.

Developed at a cost of AED80m ($21.7m), the new plant will be the first packaging plant owned by the parent company outside Kuwait. Scheduled for commissioning by the end of 2016, it will be further expanded to enhance its manufacturing capacity and meet the anticipated demand in the region.

One of the biggest producers of printing and packaging material in Kuwait, Al Khat is the only approved provider of packaging material for McDonalds and other leading brands in the Middle East. The new investment is in line with the company's growth strategy and supports its expansion plans to cater to existing clients, as well as to acquire new ones by producing packaging products adhering to high-quality and food safety standards.

Location of Gulf Printing and Packaging's new facility

The packaging facility will be located in the mixed-use cluster in Kizad, the prime industrial zone, strategically located between Dubai and Abu Dhabi, the two largest economies of the UAE.

Al Khat has chosen Kizad to serve its growing international customer base and meet the increasing demand for its products. The deepwater Khalifa port allows the company to be closer to its international clients and serve them better.

Kizad also offers market access to approximately 4.5 billion people worldwide, it is well-connected to multimodal transportation network and offers a business-friendly environment and competitive operating costs.

The industrial zone's integrated clustering approach not only enhances the economies of proximity but also facilitates cost-effective and convenient business operations.

Folding paper packaging plant production details

Gulf Printing and Packaging's new plant will be constructed on a 237,516ft² plot to produce folding paper packaging and printing products to predominantly serve the UAE, Saudi Arabian and South African markets.

Besides serving its existing high-profile clients, the plant may also support the growing number of food businesses within Kizad with its high-quality printing and packaging material in the future.

Marketing commentary on the Middle East packaging industry

The packaging market in the Middle East and North Africa (MENA) is projected to grow to $52.4bn between 2014 and 2019 at a CAGR of 5%, which represents a higher growth rate than that of the global packaging market that is forecasted to grow at just 4%, during the same period.

Saudi Arabia is the second biggest packaging market in the region and also forecasted to grow at a faster rate than the market average along with other countries including the UAE, Qatar and Morocco.

Higher economic activity, rising real incomes, urbanisation, a relatively young and growing population and development of retail infrastructure are the key drivers for packaging demand in a number of MENA countries.