With an array of sophisticated equipment and top-drawer products, the company continues to serve its existing clients and is bent on penetrating new markets
Food packaging constitutes the biggest segment of Dammam-based Sapin’s turnover, followed by packaging for the industrial and aerosol sectors, the company reported.
The food sector accounted for 45 per cent of the sales value in 2015, while the industrial and aerosol sectors contributed 30 per cent and 20 per cent respectively, said Saurabh Timochin, the company’s marketing and communications manager.
“We are, at present, leaders in food in our relevant category of competition. This year we expect our aerosol and industrial packaging to grow,” he added.
Sapin, acronym for Saudi Arabia Packaging Industries, has some iconic names among its clients that include Fonterra, Almarai, INPC, Kraft and Nestle in the food sector; Saudi Aramco, paint manufacturers Hempel, Jotun and Berger; Petronas and Al Jazeera (industrial) and Reckitt Benckiser (aerosol).
The sharp decline in oil prices over the past year has understandably led to lower growth in the economies of states in the Middle East that rely significantly on oil income, consequently impacting Sapin’s operations to some extent. However, Sapin sees the downside as something that will have to end and expects markets to pick up once stringent conditions no longer hold. Commented Timochin: “This financial deficit with the states has led to reduced growth, and increase in prices by governments to make up for the deficit. In addition to this, political instability in the region further puts stress on markets such as Iraq, Syria and Yemen. Our business was affected as many customers had their re-export markets hit.
“The region’s present fluctuation in demand can be attributed to the socio-economic situation, but we’re hopeful things will improve.”
The company produces packaging in metal and plastic. Three of its plants are located in the eastern Saudi city of Dammam, one of which is dedicated to food packaging, another to industrial and aerosol cans and plastic pails and the third to coil cutting, coating and printing. The company’s fourth plant, which is in Dubai, concentrates on food packaging.
Sapin, part of Al Suhaimi Holding Co, views the metal packaging market as fairly stable though 2015 did throw up some challenges. “As well as being good for the environment and infinitely recyclable, metal offers better protection to the product compared to other materials. Baby food powder is packed in metal as quality protection is the topmost priority,” said Timochin.
“Metal can also handle tremendous pressure, making it the material of choice for aerosol spray cans,” he continued.
“Metal fetches more revenue, due to its much larger volume. We supply cheese cans to Mondelez in Bahrain, making it one of our biggest export orders.”
The company’s tin plate requirements are sourced in Europe and Japan while plastic is procured from Saudi Arabia.
Sapin has no plans currently to venture into paper packaging but is closely looking at expanding its presence in the plastic sphere.
Approximately 50 per cent of its products are exported from the home markets of Saudi Arabia and the UAE, the two states where the company has its production facilities. The GCC region continues to be Sapin’s main market, particularly Saudi Arabia, the UAE and Bahrain, and major exports are food packaging and aerosol cans.
“Until recently, plastic pails were a highly exported item for us, accounting for 10 to 15 per cent of our business. These are mainly shipped to the African continent. Pails made of plastic and double-reduced steel are used in the paints industry but lately their export volumes have fallen because of a lack of infrastructure spending due to tough economic conditions,” observed Timochin.
“However, the food and beverage sector is recession-proof and has proven to be quite resilient for Sapin.”
The company exports two-piece aluminium cheese tins to the Mondelez plant in Bahrain, which accounts for a sizeable portion of its export revenue. Other users of Sapin’s packaging are Nestle in Dubai and Nutridor in Jordan.
It recently developed aerosol cans which are being exported from its Dammam plant to the UAE and Egypt. A major company that utilises these cans is British multinational consumer goods firm Reckitt Benckiser, maker of Airwick air fresheners.
Looking to strengthen its market presence in Egypt, the company is studying a feasibility report to open a new manufacturing facility there.
Sapin recently developed special oil cans and while most of these are used within Saudi Arabia, some are exported.
GREEN AND INNOVATIVE
The company has stepped up its focus on the environment and sustainability. Its Dubai production facility is built with Leed certification, reflecting its environmental friendliness. And it went further, gaining platinum membership of EWS-WWF (a partnership of the Emirates Wildlife Society and the Worldwide Fund for Nature that promotes green practices and sustainability for the common good).
An innovation-driven company, Sapin has from time to time introduced technologically advanced plant equipment and brought out products that have won it accolades. It proudly recalls it was the first globally to manufacture two-piece aluminium cheese cans developed with a European partner and supplied to Mondelez. The innovation won it an award at the Canmaker Summit two years ago. The prize-winning product was praised for its attractive lightweight design, the easy open end and a specially formulated lacquer that helps release cheese easily, while otherwise it would stick on to the sides as happens with conventional cans.
The company has also been engaged in research to develop lighter and stronger cans with double-reduced steel and creating packaging in fancy shapes for chocolates.
It was also named winner of the Pan Arab Web Awards 2016 for the best new website in the manufacturing category, making it the first packaging-based company to win the honour. The new website is designed to make the user experience simpler, crisp and intuitive, the company says.
Sapin’s parent company Al Suhaimi Holding has interests in, besides packaging, the manufacturing of paints and water booster systems, water well drilling services, water pump supplies and installation, piling services, real estate, travel and tours and general trading.