The gulf: a unique market with unique demands

No two world regions in process or use the same types of polyurethane in the same way. Simon Robinson examines some of the things which makes the middle east and North Africa stand out.

The UAE stands at a geographical crossroads between Africa, Europe, and South Asia. And as the wind blows over the country, so do the different influences of each of these regions.

The market for flexible polyurethane foam for comfort applications is driven by divergent forces. For example, at the big-buying international-standard and super-luxurious hotels, owners demand their beds and furniture can only be made locally by suppliers from other regions. But at the other end of the spectrum, there are local box-foam operators making low-tech foams. A number of other foamers also are interested in importing into the mid-range markets. And then there are foreign foamers based in north and east Africa who are interested in sourcing raw materials and, possibly machinery, in the region.

The scene is vibrant and as complex as the design of a Persian carpet. Baalbaki Group, for example, is based in Sharjah and has been operating in the country for a number of years. Its managing director, Wassim Bawab, said that there is not as much demand in the UAE for technically advanced foams as there are in some other regions. ‘But the region imports regrind foam,’ he said. ‘This could be used as carpet underlay or seating in communal areas of mosques, for example.’

Bawab believes that six companies make flexible foam within the UAE. ‘Before the price spike in 2018, there were a further 20 making foam in boxes, but these have closed,’ he said.

Mahmoud Karime, sales manager at Hennecke, said that there are numerous flexible foam makers elsewhere in the GCC nations, some of them quite sizeable. ‘There are some large producers in Jeddah,’ he said. ‘Kuwait and Qatar are very small producers. Yemen has 22m people and there is as much production capacity as Saudi Arabia, but purchasing power is much less and has fallen further in the civil war.’

Shake out

However, there are significant problems with logistics. ‘Pay-offs to local militia could be needed to allow goods to pass along roads,’ he claimed. ‘You can imagine how this affects the price of the final product.’

Philipp Propst, project manager and head of PU research at IAL Consultants, agrees that Saudi Arabia and the UAE are the major foam-manufacturing countries in the region. ‘Saudi Arabia is the leading slabstock foam producer in the Middle East, and the market there has been relatively buoyant in spite of the low oil prices,’ he said. ‘The increasing population and economic performance have driven this buoyancy.’

Most of the foam produced in Saudi Arabia is conventional polyether slabstock, he added. However, the popularity of higher-end products, including viscoelastic foam, is increasing, although the overall demand remains very small, and many of these products are imported to the region.

Disposable mattresses

‘There is, significant demand for low-cost mattresses in Saudi Arabia due to large religious events such as the Hajj,’ he said. ‘Viscoelastic foam is expected to experience above average growth in medical applications, but from a small base.’

Hennecke’s Karime explained that, as markets develop, the smarter manufacturers move from box to continuous foam. ‘Discontinuous foaming is not very efficient,’ he said. ‘Egypt, for example, had a lot of discontinuous foamers in the past. A couple of them realised that if they moved to continuous production they would stay in business. Now, most of the foamers that are doing well and are profitable are continuous.’

He said that in the GCC North and East Africa regions, commodity foams tend to be between 10 and 35 kg/m³ (10oz-2.18 lbs/). ‘There are some people making viscoelastic or HR foam,’ he said. ‘But these are very rare. Most is imported from Turkey, where they are on a different level. They are much bigger in terms of production volumes, and have completely different infrastructure and know-how than Saudi Arabia or the UAE.’

It is not worth companies that consume three or four blocks each month to integrate the process, he believes. ‘It is cheaper to buy the foam in containers,’ he claimed.

Bring it in

This import market is interesting to a number of companies located in neighbouring countries. A number of flexible foam manufacturers at the recent Sleep Expo Middle East event in Dubai (9-11 Feb 2020) attended the event to talk with local mattress and furniture makers.

Ajafco’s managing director, Anthony Aboujaoude, for example was at the event to see if there was a market for his company’s range of flexible foams in the region. Lebanon-based Ajafco has been producing flexible foam production and bedding since 1967 at a plant in Deir el Haref. It makes about 800 tonne/year flexible foam, including conventional, HR and viscoelastic grades. The company makes short 2.4m blocks using a Hennecke continuous machine, and has Baumer as well as Fecken Kirfel cutting equipment.

While it started out purely as a foam maker, Aboujaoude explained that as new foamers entered the industry, they needed to evolve, and add value to the supply chain. ‘To sustain a healthy operational model, we had to diversify our product mix,’ he said. ‘In the mid-1970s, we considered both horizontal and vertical integration,’ he said. ‘We aimed at the specific needs of the bedding industry, and started making high-quality mattresses and pillows. We also bought a flame laminating machine to supply products for the textile and automotive industries.’

The company, which employs 50 people, exports specialty products to Greece, Cyprus, Egypt and Saudi Arabia. ‘These are small volumes because specialties in this part of the world are not very common,’ he said. ‘There is a lot of low-density polyether foam filled with calcium carbonate in the GCC. Viscoelastic foam is becoming more and more popular but, the Chinese and Turkish producers are dominant.’

But Aboujaoude is looking ahead. ‘We have made big investments in to have our machines retrofitted to make specialty grades,’ he said. ‘We are considering launching a bed-in-a-box brand.’ This would likely be for export; at home, it primarily distributes its mattresses via a a network of stores, retail shops and its own brick-and-mortar shop, Ajafco Beddings.

A growing market

Oman’s Syed Anwar Aahan, general manager of Raha Oman, gave the keynote at the conference attached to the exhibition. He said that the GCC market for PU foam is growing. ‘Thirty years, ago everything was imported,’ he said. ‘Slowly people started manufacturing, and because there is a lot of volume with polyurethane foam, there is little competition from far away.’

His business is a little different to the local producers in Dubai. ‘We make 13kg/m³ density for a throw-away mattress to 60kg/m³ for HR foams,’ he said. ‘We decided we would not just look at the mattress business, which is at the cheap end of the market. We went for furniture applications. We do not use fillers, and we are geared for different furniture foams.’

At the bottom of the market, Aahan said, it is all about hardness, density and price. ‘We don’t want to be in that market,’ he claimed. ‘We also make moulded foams, and we have a long-block peeling system, profiling and cutting machinery.

The company makes 60m blocks and peels them.’

The company has been in operation since 1980. At first, it made box foam with a Hennecke BF100 machine. ‘In 1982, we bought our first 150E machine from Cannon Viking,’ he said. ‘We sold that to a company in Kenya, and bought a MaxFoam750 from Cannon Viking.’ The company now also has a high-pressure moulded foam machine from KraussMaffei, and a moving head cutter from Baumer.

Most production goes into furnishings, upholstered furniture, polyester fibre and sprung mattresses. ‘Since we had the distribution, we kept adding products,’ he said. It employs 450 people in Oman, and counting those in Kuwait, Qatar, Saudi Arabia there are about 600 involved in the business. It also has a testing laboratory.

A question of taste

Companies looking to supply the region will have to come to terms with a range of different aesthetics and opportunities. For example, as Aahan of Rana Oman explained, there is a line of business where initial hardness is good. ‘If it’s hard it is good, but that defeats the whole purpose of foam,’ he said. ‘But there is a market segment where quality is determined by hardness.’

This was reflected by Dow’s Akil Sahiwala, sales director for PU Middle East & Africa, speaking away from the exhibition. He explained that the preference for hard foams is built into the formulations. ‘Standard polyols are blended with high solids polyols at typically 10, 15 or 25%, although some applications call for 40% high-solids material in the mixture,’ he said. ‘It depends on how hard people want the final mattress to be. Mattress manufacturers use copolyols based on flexible polyols, which Sadara produces, and high solids polyols because there is a varying degree of hardiness is needed in the foam.’

The region has a preference for slightly harder mattresses, he believes. ‘Dow is mulling over whether to install a high-solids blending unit in the region,’ he said. ‘But it would benefit from having locally produced blends.’ He added that there is a lot more growth in the flexible side at this stage.

‘There is also on average a higher level of TDI in mattress formulations in comparison to Europe,’ added IAL’s Propst, echoing Sahiwala’s comment that the market favours harder mattresses. There is also a preference for harder foam in high-end Arab-style sofas, which are an important end-use market.

A view from Europe

Two Iberian flexible foamers were present at the event: Torres Espic from Spain and Flex 2000 from Portugal. Both were there to talk to local mattress specifiers and buyers.

‘We have some business in Dubai, North Africa and Senegal,’ Rafael Torres Sanchez, CEO at Torres Espic CEO, said. He added that his company is well positioned to supply the region because of its network of agents in North and South Africa, the Middle East, Singapore and Turkey.

The company has 75 employees on its 50,000 m² site Valencia, Spain and converts around 10 kT/year flexible foam. It is 100% family owned, and makes foam for bedding and furniture using machinery from a range of suppliers. It has a LaaderBerg foam line, cutting machinery from Fecken-Kirfel, racking and curing facilities supplied by IPF, and wrapping technology from Dolphin Pack.

The investments in cutting and storage facilities that it made in 2019 will allow it to increase production to between 20-25 kT/year. ‘We are aiming to become a EUR50m/year company,’ Sanchez said. ‘We only make foam; we respect the supply chain.’

Carlos Pereira, manager for products and operations at Flex 2000, explained that his company was at Sleep Expo Middle East as the first step to understand the market and develop a strategy to meet its demands. He said that the company exports to France, Italy and a number of other countries from its site in Ovar, Portugal. It exports are as rolled, compressed block mattress cores.

The company is based in an industrial region to the north of the country on the Atlantic coast. With 50kT/year capacity, it makes polyether, polyester viscoelastic and HF foams on Hennecke equipment. There are 96 racks to store foam on the site, Pereira said. Products are supplied as rolls and blocks which are customised to client requirements. It also has a lab that can test formulations as blocks up to 400 x400 x 400 mm, he added.