Angolan Sunavest Group invests US$15m in paper recycling unit, Ugandan plastic manufacturer lament over rising costs

ANGOLA – Angolan manufacturing giant, Sunavest Group has announced that it’s investing around US$15 million in a paper recycling factory, which is scheduled to commence operations in September this year.

With an installed capacity of 55 tonnes/day and an annual average of 20,000 tonnes/year, the investment is in line with the Angolan state’s strategy of promoting local production, reports ANGOP.

The facility will also contribute to reduction of waste in the environment, with the recycled items converted into packaging materials, carrier bags, cardboards etc.

The Sunavest Group owns the Zeepack Angola and Plastcon factories, which develop industrial projects with the latest technology for paper and plastic.

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Meanwhile, Ugandan plastics manufacturers are lamenting over increased cost of raw materials, which is expected to impact local prices in the near future.

According to reports by Daily Monitor, a tonne of raw plastic materials has increased by nearly 100 per cent from US$900 (Ush3.3m) a year ago to US$1,900 (Ush7m).

Mr Musa Mugeere, Managing Director of Luuka Plastics, the leading packaging company in Uganda said, “We are not even sure where the price will be in the coming months. Every other month suppliers have been reviewing rates upwards.”

He further highlighted that the increasing cost has eaten into the company’s returns, amid low demand resulting from a reduction in customers’ purchasing power.

Global plastic packaging market size is projected to reach US$320.94 billion by 2027

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Mr Mohamed Lalan, CEO of African Polysack, producer of a range of gunny bags, said that whereas prices had surged to unpreceded rates, there has been some resistance from local manufacturers in the region and outside, which might force suppliers to review rates.

For now, he said, many plastic manufacturers have either had to absorb the increase or scaled down on inventory and production, which is expected to impact employment and eat into earnings.

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He also noted that the prices of raw materials have been relatively stable in April and are expected to stabilize further in May and June. 

Uganda is a net importer of plastics inputs much of which are sourced from India, United Arab Emirates, and Saudi Arabia.

The increase in price has largely been blamed on UAE’s decision to trade more with US and the devastating effects of Covid-19 in India.

Mr Allan Ssenyondwa, the Private Sector Foundation Uganda director for policy, said it would be difficult for local producers to absorb the prices for a long time if stability does not return in supply markets.

“Economically and commercially speaking, if the price of raw materials increase it is will automatically raise the price of the commodities,” he said.

According to Research and Markets, the global plastic packaging market size is projected to reach US$320.94 billion by 2027, registering a revenue-based CAGR of 4.0% over the forecast period 2020-2027.

The market is majorly driven by the growing demand for plastic packaging from the food and beverage and industrial packaging industry.

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