According to S&P Global Commodity Insights, the polypropylene production has already commenced, with supplies being distributed in 25kg bags. Market sources indicate that the Dangote Group began preemptively offering polypropylene supplies as early as February, a move that has already begun to disrupt the domestic market.
Once fully operational, the Dangote facility is poised to become Africa’s largest polypropylene production site, with two units capable of producing 500,000 mt/year and 330,000 mt/year, respectively. This development is expected to significantly reduce Nigeria’s reliance on imported polypropylene, which is widely used in plastic packaging, textiles, and other industrial applications.
Disrupting the Market and Driving Local Growth
The Dangote refinery’s entry into the polypropylene market is expected to capture a substantial share of the domestic market, which has traditionally been dominated by imports from the Middle East and limited local production from Indorama Eleme’s Port Harcourt refinery. Market participants have warned that the new capacity could quickly reshape the polypropylene homopolymer market in Nigeria and beyond.
Aliko Dangote, President of the Dangote Group, has expressed optimism that the facility will fully meet Nigeria’s annual domestic demand of 250,000 metric tonnes for polypropylene. The refinery’s ability to produce 77 different high-performance grades of polypropylene positions it as a key player in the global petrochemical industry, catering not only to African markets but also to international demand.
The $2 billion petrochemical plant, located in Ibeju-Lekki, Lagos State, is designed to drive massive investment in Nigeria’s downstream industries. Devakumar Edwin, Group Executive Director of Strategy, Capital Projects & Portfolio Development at Dangote Industries Limited, emphasized the plant’s potential to generate employment, increase tax revenues, reduce foreign exchange outflows, and boost the country’s Gross Domestic Product (GDP).
“With 77 types of polypropylene, our plant can meet diverse industrial needs. Currently, we can produce about 900,000 tonnes of polypropylene annually, making it the largest in Africa,” Edwin stated. He also highlighted the plant’s role in addressing the foreign exchange challenges faced by local manufacturers, who currently rely on imported raw materials.
Impact on Nigeria’s Oil and Petrochemical Sectors
The Dangote refinery has already begun to reshape Nigeria’s oil market, undercutting local producers and triggering steep discounts in the gasoline retail market. Its operations have also disrupted traditional trade routes for oil products, which previously flowed from Europe to West Africa.
While the refinery aims to reach its full capacity of 650,000 barrels per day by March, this goal is contingent on crude oil availability. Meanwhile, the timeline for the petrochemical facility to achieve full utilization remains unclear.
The refinery’s impact extends beyond polypropylene production. Its integration with the petrochemical plant is expected to create a robust value chain, supporting the growth of Nigeria’s plastic processing and manufacturing sectors. By providing locally sourced raw materials, the facility is set to attract new investments and reduce the country’s dependence on imports.
Polypropylene: A Versatile Material with Global Demand
Polypropylene, a synthetic fabric derived from petroleum-based thermoplastic polymers, is a by-product of oil and natural gas production. Its versatility makes it a key material in the production of plastic packaging, machinery parts, textiles, piping systems, medical equipment, and more.
The Dangote refinery’s ability to produce polypropylene locally is expected to unlock significant economic benefits for Nigeria, including job creation, increased industrial activity, and reduced import costs. As the facility ramps up production, it is set to position Nigeria as a major player in the global petrochemical industry, while addressing critical challenges in the domestic market.