MEA Conveyors Industry Overview
MEA Conveyors Market Analysis
The Middle East and Africa Conveyors market is expected to register a CAGR of 3.44% over the forecast period from 2020 to 2025. Multiple countries in the Middle East, such as the United Arab Emirates and Saudi Arabia, have strategically utilized its geographical location to develop as an air transport hub for international flights. The vast infrastructure planned in the pipeline is expected to drive the demand for conveyors in the region. Moreover, various governments in the region, such as Saudi Arabia, are offering substantial administrative and financial support to the manufacturing sector in the region, providing a boost to conveyors' usage. The increasing number of industries and manufacturing units is also expected to drive the demand for automation in the African region.
Intra-Africa trade is on the rise. African countries signed a trade agreement called the African Continental Free Trade Area Agreement (AfCFTA), which permitted countries to remove tariffs on 90% of goods, progressively liberalizing trade in services, while addressing a host of other non-tariff barriers. These kinds of agreements are expected to increase the need for automation, such as conveyors, to simplify goods' management. Improvements in intra-Africa trade may also ease business in the region, by reducing the time and costs required to move goods and services within countries and across borders. As a whole, they also increase the African continent's appeal as a partner in global trade.
If a conveyer belt system experiences an extended downtime, the entire production chain often collapses, intensive maintenance and usually repair work is required. Monitoring systems helps the customers to detect damages early and thereby reduce downtimes and save maintenance costs. For instance, in January 2020, South Africa witnessed a power outage caused by a constrained system and damaged conveyor belt at the Medupi power station, caused the first round of load shedding in 2020. Eskom, South African electricity public utility, announced that although the conveyor belt at Medupi had been repaired, it continued load shedding few days due to a loss of additional units that depleted its diesel and pump storage levels, which will need to be restored.
In March 2020, the Egpyt's government announced its aim during the coming period to maximize the value of the natural oil resources according to a strategy aimed at expanding the petrochemical industry in Egypt. The strategy led to three industrial projects with investments totaling USD 4 billion in the Ethydco Complex and the Mopco Complex for Fertilisers and Alexandria to produce ethylene and its derivatives, a primary material for the plastics industry. Ethydco's investments include a project manufacturing synthetic rubber with an investment of USD 105 million to supply raw materials to 13 sectors, including tyre and conveyor belt manufacturers and construction.
According to the International Monetary Fund (IMF), the necessary containment measures implemented to slow the COVID-19 spread and lower global demand have significantly impacted economic activity in the Middle East and African region. The region's real GDP is projected to fall by 4.7% in 2020, a 2% drop from the IMF's April 2020 Regional Economic Outlook. Notably, among countries fragile and in conflict situations in the region, the output is now projected to shrink by 13% in 2020. This is expected to significantly influence the region's industrial spending, which could negatively impact the spending on automation systems such as conveyors.
MEA Conveyors Industry Segments
Conveyor systems are mechanical devices or assemblies that are used to transport various materials with little effort. There are different kinds of conveyor systems, usually consisting of a frame that supports either wheels, rollers, or a belt, upon which the materials move from one place to another. The scope of the study is currently focused exclusively on the Middle East and African region.
MEA Conveyors Market Trends
This section covers the major market trends shaping the MEA Conveyors Market according to our research experts:
Airports is Expected to Hold Significant Share
The Middle East is poised to be the fastest-growing region in the airline industry over the forecast period, with the highest growth, in terms of new airline capacity and revenue passenger kilometer (RPK). For instance, King Abdulaziz International Airport, known for its Hajj Terminal, is the busiest airport in Saudi Arabia. It is currently undergoing expansion, which is expected to increase the airport's capacity from 13 million passengers per year to 80 million passengers every year. The project is expected to be completed by 2035.
Moreover, in the Middle Eastern region, the vast number of airport capital expansion programs are led by the rising demand, primarily due to the growth of domiciled carriers and geographic proximity to major source markets, such as the intercontinental traffic flows and the Indian subcontinent. In December 2019, Saudi Arabia's General Authority of Civil Aviation (GACA) started the new Arar airport's trial operation phase. Once operational, the new Arar airport will have the capacity for 1.04 million annual passengers and more than 10,000 flights per year. The main terminal at the new Arar Airport also has an advanced luggage handling system with two conveyor belts.
South Africa is a significant tourist attraction in Africa, is investing heavily in airports, and is the single largest and fastest-growing segment in the MEA. Three South African Airports, Cape Town, Durban, and Johannesburg's international airports were considered the best globally and were awarded in the 2019 Skytrax World Airport Awards. Israel has a low air passenger ratio, globally. To boost winter tourism and provide an alternative for conflict times, Israel opened a new airport in January 2019. This airport is expected to handle 4.25 million annual passengers. These factors are expected to propel the growth of the market studied.
The region is home to some of the world's most advanced airports, including Dubai International, King Abdulaziz International, and many others under construction. However, these facilities are empty due to the COVID-19 pandemic. However, once travel resumes, these airports will play a critical role in restarting economic activity, particularly for tourism and travel in the Middle East. In June 2020, Oman Airports has announced a bevy of safety measures to be followed when operations resume, such as sterilizing devices for luggage trolleys and continuous sterilization of airport facilities and all luggage on conveyor belts.
United Arab Emirates is Expected to Hold Significant Share
The United Arab Emirates (UAE) is one of the world's major tourist destinations and attracts many foreign tourists. This increase in the country's average air traffic is propelling the demand for baggage handling systems in the airport end-user segment. Although the slowdown of the global oil market and restrictions on productions are likely to reduce the aviation sector's investments, considerable recovery is expected in the coming years. The UAE's status as an attractive destination in the region, where start-ups in the UAE remain the most active in attracting funding, with steady investor appetite in UAE-headquartered companies by both local and global majors is expected to impact the market in the country positively.
Logistics infrastructure readiness is essential to support the growth of eCommerce, and in this regard, the UAE is at par with specifically developed markets globally. The country enjoys an advantage as a significant global transshipment hub with Dubai's airports and the port of Jebel Ali, providing a high standard of logistics infrastructure. In June 2020, UAE-based merchant acquirer Network International confirmed that nearly 2,000 businesses in the UAE are either looking to develop e-commerce capabilities. After the ongoing COVID-19 pandemic, firms in the country are expected to adapt to the rising e-commerce needs of consumers placing online orders. Such instances are expected to augment the conveyors market.
In December 2019, DHL Express officially opened its Dubai World Central Facility. The new export and import gateway and service center will see DHL invest USD 5.5 million in the coming years to support the significant growth of e-commerce in the UAE and the region. Strategically located at the Logistics District at Dubai World Central (DWC), the center occupies 4,870 sqm area and can manage 2,400 shipments per hour and up to 57,600 shipments a day. The facility will have an automated bi-directional conveyor system, which will enable faster and more efficient sorting of packages.
In April 2020, SAFEEN, Abu Dhabi Ports' maritime service arm, announced an acquisition of a Post Panamax bulk carrier, making it one of the largest vessels ever in its inventory. It will initially undergo an extensive conversion before commencing operations. The refitting will include cranes and conveyor systems, which, when combined with other design parameters, will render the vessel a potent and efficient transshipment platform, enabling SAFEEN to provide concrete bulk cargo transshipment services. Commencing from January 2021, the vessel will assist in transporting bulk iron ore bound for Emirates Steel from incoming bulk carriers more efficiently.
MEA Conveyors Market Competitor Analysis
The Middle East and Africa Conveyors market is moderately competitive, owing to the presence of international companies. The market appears to be moderately fragmented, with significant players adopting strategies like product innovation and mergers and acquisitions. Some of the market's major players are Daifuku Co. Ltd, KUKA AG (Swisslog AG), Mecalux SA, etc.
August 2020 - Swisslog announced an installation for Mai Dubai, a leading Dubai-based bottled drinking water company. The installed Swisslog solution features a ProMove pallet conveyor and lifting systems that ensure the efficient flow of goods and sequencing of pallets in receiving and shipping.
December 2019 - CITCOnveyors delivered its conveyors systems for the Arrival and Departure Areas at the Seiyun Hadhramaut Airport in Yemen trough Safer Exploration and Production Operations Company.
MEA Conveyors Market Top Players
1. Daifuku Co. Ltd
2. SSI Schaefer AG
3. KUKA AG (Swisslog AG)
4. BEUMER Group
5. Mecalux SA