Turbulence at the Strait: How Hormuz Disruption Is Reshaping Packaging Across the Middle East, Africa, and India

The Strait of Hormuz is just 33 kilometres wide. Yet this slender waterway has become the packaging industry’s most unexpected catalyst for change. 

Since early March 2026, ongoing conflict has closed this critical chokepoint, and packaging professionals across the Middle East, Africa, and India have faced a genuine test of agility.

The good news? The sector is not just surviving. It is innovating, regionalising, and discovering that crisis can accelerate sustainability faster than any boardroom resolution ever could.

The Hormuz Reality: Big Numbers, Bold Pivots

Here is what the industry is navigating. The Middle East supplies roughly 25% of the world’s polypropylene and 20% of its polyethylene – the building blocks of flexible packaging, caps, and bottles. The same closure blocks 84% of Middle East polyethylene exports, according to RELEX Solutions. By late April 2026, polypropylene prices across Asia hit record highs, jumping 59%. In India, packaging costs surged 50 to 100% as the crisis deepened. Asian spot LNG prices surged from about US$10 per million British thermal unit to US$24-25 per mmBtu.

Yet here is the energising twist. These numbers are not just problems. They are invitations to rethink.

Real Companies, Real Resilience

Take India’s UFlex, one of the largest flexible packaging manufacturers in the world with significant operations across Africa. In its third-quarter results, the company reported consolidated net revenue of ₹3,632.9 crore (US$427 million), with normalised EBITDA reaching ₹439.5 crore (US$51.7 million) – a margin improvement of 200 basis points to 12.1%. Net profit stood at ₹48.6 crore (US$5.7 million). 

This improvement came despite volumes declining 3.7% year-on-year to 151,245 metric tonnes. How? Aggressive cost control and successful raw material price pass-through. For the first nine months of FY26, net profit improved dramatically to ₹121.1 crore (US$14.2 million) compared to a net loss of ₹26.2 crore (US$3.1 million) in the same period the previous year. Ashok Chaturvedi, UFlex’s Chairman, notes that new greenfield projects in Egypt, India, and Mexico are nearing completion. With 56% of revenue from international markets, UFlex is leveraging its multi-continent footprint as a genuine competitive advantage.

Parle Products, one of India’s largest biscuit manufacturers, is taking a different but equally pragmatic approach. Mayank Shah, Vice-President, told The Financial Express that packaging and freight costs constitute about a fifth of total costs. “If the war drags on, we may have to take price hikes,” Shah noted. AWL Agri Business has already flagged a 20% rise in oil-linked costs with Brent crude above US$110 per barrel. These are not panic statements. They are honest, proactive communications.

Even infrastructure giant Larsen & Toubro, which derives 37% of its ₹7.33 lakh crore (US$862 billion) order book from the Middle East, is watching closely. The message across all these examples is consistent: transparency and agility win.

Regulatory Innovation: India’s Six-Circular Framework

Governments have responded with surprising speed. India’s Central Board of Indirect Taxes and Customs issued six emergency circulars over 38 days between 8 March and 15 April 2026. The most significant came in Circular No. 21/2026 dated 15 April 2026, which addressed off-loaded cargo returning from foreign ports.

The critical provision? A waiver of the Bill of Entry requirement at the return port, permitting off-loading of containers without fresh documentation, subject to RFID e-seal verification. These relaxations currently operate only until 30 April 2026, but the very fact that they exist shows regulatory muscle-flexing that would have taken months in calmer times.

Africa Rising: Egypt’s Manufacturing Opportunity

Africa is not waiting passively. Egypt, in particular, is positioning itself as an alternative packaging hub. According to discussions at the Egyptian-Indian Business Council in Cairo, India’s investments in Egypt exceed US$5 billion (₹42,500 crore), spanning nearly 70 factories providing around 40,000 jobs.

Egypt imports US$1.7 billion (₹14,450 crore) worth of polyethylene and polypropylene annually, yet India’s share of that market remains a mere US$20 million (₹170 crore) – a vast, largely untapped opportunity. Egypt’s relatively low customs tariffs – around 8% compared to 18% in the United States – offer a competitive advantage for packaging manufacturers looking to serve African and Middle Eastern markets. UFlex’s new greenfield sterile packaging plant in Egypt, nearing completion, is a direct bet on this thesis.

Pivoting with Purpose: Four Strategies That Work

What are smart companies actually doing? First, regionalising supply chains. UFlex’s multi-country manufacturing footprint is not accidental – it is a deliberate hedge. Second, material substitution. The aluminium aerosol can market, valued at US$7.72 billion (₹65,620 crore) in 2025, is projected to reach US$11.16 billion (₹94,860 crore) by 2033 at a CAGR of 4.62%.

Middle Eastern manufacturers like Gulf Cans Industries and Indian players like Bharat Containers are well-positioned. Third, recycling as strategic asset. UFlex’s new recycling facility in Noida and NowPurchase’s ₹80 crore (US$9.4 million) fundraising for scrap recycling show capital flowing to the right places. Fourth, regulatory arbitrage – using Egypt’s lower tariffs to serve African markets from Egyptian facilities.

The Sunny Outlook: Opportunities Ahead

Where does the sector go from here? Three trends stand out. First, recycled content is having its moment – companies that invested in recycling infrastructure before the crisis now sit on strategic assets. Second, Africa as a manufacturing destination has never looked more attractive. Third, the sustainability agenda gains velocity. As Euromonitor notes, geopolitical shocks offer “a rare window where cost reduction and sustainability objectives converge.”

The Final Wrap

The closure of the Strait of Hormuz is a genuine challenge. Polypropylene prices up 59%. Packaging costs in India up 50-100%. 84% of Middle East polyethylene exports blocked. Yet within these numbers lies genuine momentum.

From UFlex’s profit recovery to Egypt’s manufacturing rise, from India’s regulatory speed to Parle’s transparent planning – the sector is bending, not breaking. Regionalise. Recycle. Reformulate. And keep building. The package always arrives. Now it arrives smarter, leaner, and more resilient than before.

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