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 was 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.
The AED80m ($21.7m) plant was commissioned in February 2018. It is the first packaging plant owned by the parent company outside Kuwait and is expected to enhance its manufacturing capacity and meet the anticipated demand in the region.
Al Khat is one of the biggest producers of printing and packaging material in Kuwait and the only approved provider of packaging material for McDonalds and other leading brands in the Middle East.
The investment was in line with the company’s growth strategy and supported its expansion plans to cater to new and existing clients by developing packaging products adhering to the highest quality and food safety standards.
Al Khat plans to employ 200 people at the new facility, upon reaching full capacity.
The packaging facility is 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. The new plant is the first food and beverage packaging facility to start operations in the Kizad region.
Al Khat chose 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.
Gulf Printing and Packaging’s new plant is constructed on a 237,516ft² plot to produce folding paper packaging and printing products for the UAE, Saudi Arabian and South African markets.
In addition to serving its existing high-profile clients, the plant also supports the growing number of food businesses within Kizad with its high-quality printing and packaging material.
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 such as 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.