PETpla.net Insider 04 / 2015

EDITOUR REPORT 16 PET planet insider Vol. 16 No. 04/15 www.petpla.net In Algeria I visited two important representatives in the preforming sphere, namely, SGT Algérie and PTD. In market share, these two companies are by far and away the two most important in preform production and their opinions on the future trend of the market diverge to a sig- nificant extent. SGT basically talks about a closed market where production and development tend to be limited very much to the local area due to the economic situation, whilst PTD is already getting ready for the border with Morocco to be opened and for a more stable situation to develop as regards Tunisia, Libya, Mali and Niger and is making appropriate investments in this regard. We shall have to wait and see which of these two strategies turns out to be the right one in the medium term. According to intelligence obtained, in 2014 around 4.4 billion preforms were produced by the market overall. The estimated capacity of all preformers is around 10 billion pieces annually. Total PET resin consumption is esti- mated at 157,000 tonnes, of which SGT alone processes 68,000 tonnes. PTD is about 26,000 tonnes. Ifri (Ibrahim & Fils Ifri), the market leader in water and self-sufficient when it comes to preform-related matters, uses approx. 22,000 tonnes of material; usage on the part of the bottler and edible oil producer Cevital is estimated to be 18,000 tonnes. As regards consumption SGT, Ifri and Cevital together represent 62% of the PET market. 98% of all the PET material goes into bottle production; other applica- tion areas are yet to receive consumer approval. As far as beverages are concerned, Ifri currently hold a market share of approximately 15% in the water segment, fol- lowed by Guedila (SGEM Société Guedila des Eaux Miné- rales Sarl) with 10%. One locally strong brand, Hamoud Boualem, based in Algiers, is taking over the lead in the CSD sector with a market share of around 50%, followed by Coca-Cola and Pepsi. Future trends in PET are well-defined within the pack- aged water sector (with an estimated 3% growth rate), a 3% growth rate for CSDs has likewise been defined in trade value sales. In the CSD sector around 80% of the market falls into the short neck category. Here the majority of people in Algeria prefer the 1 litre and 2 litre size bottles and 1.5 litre bottles for water. Development as regards milk products in PET is still negligible and, in the case of juices, around two thirds of packaging companies are opting for cartons. There is no dearth of competition among the total number of 16 preform manufacturers and it is possible that this could lead to problems in the future; one factor being the high level of capacity and the other due to the small market share on the other, in particular where the respec- tive company only supplies a very small customer base. One could almost talk about a price war, to the disadvan- tage of the small converters in particular where any room for negotiation in the purchase of raw material is limited. This begs the question of why production capacities of 10 billion preforms are basically available. One possi- ble explanation is the take-up of state sponsorship pro- grammes for projects of this nature, coupled with credit at PET sales in million litres Beverage Category Pack Material Pack Type Tunisia Algeria Morocco 2011 2012 2013 2014F 2011 2012 2013 2014F 2011 2012 2013 2014F Packaged Water All All 1,014.88 1,068.85 1,137.54 1,213.86 1,098.80 1.221.53 1,294.87 1,366 .00 438.40 452.73 474 .41 500.18 PET Bottle 954.79 1,002.52 1,069.17 1,141.75 1,048.51 1,167.67 1,240.80 1,313.70 422.09 436.85 458.51 481.39 Energy Drinks All All 1.73 1.81 1.94 2.02 1.09 1.85 2.29 2.70 3.40 3.50 3.71 3.88 PET Bottle 0.02 0.06 0.05 Fruit Powders All All 6.52 7.16 7.84 8.30 0.86 0.88 0.89 0.90 24.60 24.80 25.55 26.56 PET Bottle Iced/RTD Coffee Drinks All All 0.01 0.01 0.01 0.01 PET Bottle Iced/RTD Tea Drinks All All 0.12 0.12 0.12 0.13 0.11 0.11 0.11 0.30 0.30 0.30 0.40 PET Bottle 0.01 0.01 0.01 0.01 Juice* All All 2.12 2.51 2.60 2.69 4.50 5.00 5.61 6.12 5.20 5.50 5.93 6.09 PET Bottle 0.10 0.11 0.11 0.12 0.65 0.59 0.57 0.56 Nectars* All All 41.58 43.16 44.43 45.73 16.73 20.12 24.32 26.74 82.10 88.10 92.16 94.53 PET Bottle Sports Drinks All All 0.01 0.00 0.00 0.00 1.17 1.21 1.40 1.60 1.70 1.73 PET Bottle 0.01 0.00 0.00 0.00 1.17 1.21 0.10 0.30 0.50 0.63 Squash/Syrups All All 15.90 16.05 16.46 16.87 2.67 3.00 3.12 3.34 4.70 4.80 4.75 4.89 PET Bottle 3.38 5.03 6.03 6.81 1.32 1.41 1.37 1.45 Still Drinks* All All 39.04 41.60 44.61 47.91 477.77 536.19 612.85 706.76 22.10 36.97 41.76 44.66 PET Bottle 4.21 4.11 5.79 6.02 315.80 357.31 408.30 473.27 16.40 29.17 33.06 35.56 Carbonates All All 511.83 574.69 587.14 606.02 1,419.59 1,504.67 1,499.64 1,562.92 697.60 705.24 692.68 700.56 PET Bottle 308.51 357.06 366.13 376.41 896.43 949.03 943.05 985.05 498.10 503.84 495.40 500.86 *Juice = 100% Juice Content, Nectars = 25 - 99% Juice Content, Still Drinks = 0 - 24% Juice Content (Source: Canadean)