Producers of juices and dairy products in the region are facing a shortage of glass bottles for packaging, which is posing a challenge in maintaining product quality.
Emirates Business spoke to several manufacturers in the region who alleged that the shortage has been caused by glass producers increasingly selling the material in Europe to take advantage of a favourable euro-dollar exchange rate, thus creating a shortage in the local markets.
Georges Sioufi, General Manager of Saudi Arabia-based Arrow Juice Factory for Bottling and Production Co Ltd, said: "Even though the food industry has been the least hit by the current global crisis, we have been facing a challenge due to the shortage of bottles to package our products. Things have eased slightly, but we still have a shortage and keeping up with orders from customers is tough."
Kamel Abdallah, Executive Vice-President of another Saudi Arabia-based company, Aujan Industries, said last year some local and regional glass producers shifted their sales to customers in Europe, which has created a serious shortage of glass bottles in the region. "They did so at the expense of their clients in the GCC. This did not reflect a long-term strategic thinking."
Abdallah said the rise in euro's value made many Europeans buy glass manufactured in the GCC, such as Saudi Arabia and the UAE.
"The difference in value between the euro and the US dollar encouraged manufacturers to shift their exports to Europe. The rise in the prices of raw materials used in producing glass, such as sand and soda ash, by almost 100 per cent over the last two years has forced food manufacturers to adopt new strategies to preserve their profit margins. The prices of such raw materials have jumped from $255 [Dh936] per metric tonne in 2007 to $455 in 2008. "Other food manufacturers use other packaging materials to cut on cost, but we are committed to the use of glass since it preserves the quality of any product to its maximum."
"The world is currently going through a recession, but despite this the food industry, with all its sectors, will see growth in 2009 – especially in this region."