Dangote Refinery Begins Polypropylene Production, Poised to Reshape Market
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The Dangote oil refinery has begun production at its polypropylene facility in Lagos, marking a significant milestone in Nigeria’s petrochemical industry. The plant, which is set to be officially unveiled soon, is expected to dominate the domestic market, reducing reliance on imports and reshaping supply chains.
According to S&P Global, the facility’s polypropylene output—estimated at 830,000 metric tonnes per year—is one of the last major steps in the commissioning of the vast Dangote Refinery and Petrochemical complex, which has been gradually coming online since January 2024.
“Polypropylene production has now started, with supplies being distributed in 25kg bags, and has already threatened to upend the domestic market,” S&P Global Commodity Insights reported, citing industry sources. Some traders indicated that the Dangote Group had begun offering polypropylene supplies as early as February, well ahead of full commercial operations.
Aliko Dangote, the billionaire industrialist behind the project, has previously expressed confidence that the refinery will meet Nigeria’s domestic demand of around 250,000 metric tonnes per year for polypropylene, a key material in plastic packaging, textiles, and industrial applications. Once fully operational, the complex will become Africa’s largest polypropylene producer, with two production units boasting capacities of 500,000 and 330,000 metric tonnes per year, respectively.
The entrance of Dangote’s petrochemical plant is expected to disrupt the existing polypropylene homopolymer market, currently dominated by Indorama Eleme’s Port Harcourt facility and supplemented by imports from the Middle East.
Impact on Nigeria’s Oil and Petrochemical Markets
The Dangote complex has already made waves in the oil sector, significantly undercutting local producers and forcing price reductions in Nigeria’s gasoline retail market. The refinery has begun replacing traditional European oil product shipments to West Africa, capturing a growing share of the domestic market while state-owned refineries in Port Harcourt and Warri continue to struggle with outages.
The group had projected that its refinery would reach its full processing capacity of 650,000 barrels per day by March, though this remains contingent on crude oil availability. Meanwhile, no official timeline has been provided for when the petrochemical facility will reach full-scale production.
The $2 billion petrochemical plant, located in Ibeju-Lekki, Lagos, is designed to manufacture 77 high-performance polypropylene grades. With an expected annual turnover of $1.2 billion, the plant aims to supply not only Nigeria’s growing plastic processing sector but also markets across Africa and beyond.
Boost for Local Manufacturing and Economic Growth
Devakumar Edwin, Group Executive Director of Strategy, Capital Projects & Portfolio Development at Dangote Industries, highlighted the wider economic benefits of the new facility.
“Our petrochemical plant is set to be the biggest in Africa, with a production capacity of 900,000 tonnes of polypropylene per annum,” Edwin said. “At present, Nigeria relies on imported polypropylene raw materials, and manufacturers struggle with foreign exchange constraints. This facility will eliminate that challenge.”
Edwin emphasised that local production of polypropylene would stimulate industrial investment, create jobs, generate tax revenues, and strengthen Nigeria’s GDP.
“When raw materials are locally available, more businesses will be encouraged to invest in the economy,” he added. “This is not just about saving foreign exchange on imports; the entire downstream sector stands to benefit enormously.”
A Game-Changer for Nigeria’s Petrochemical Industry
Polypropylene, a thermoplastic polymer derived from propylene gas, is a crucial material in various industries, from packaging and textiles to medical equipment and automotive parts. The Dangote plant’s entry into the market is expected to drive down costs for manufacturers while increasing Nigeria’s self-sufficiency in petrochemical production.
With its scale, strategic importance, and potential to reshape domestic and regional markets, the Dangote Petrochemical plant is a transformative project—one that could redefine Nigeria’s industrial landscape for decades to come.
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