The Dangote oil refinery has commenced the startup of its polypropylene facility in Lagos,
Our correspondent gathered that the polypropylene facility will be officially unveiled soon.
S&P Global also reports that starting up Dangote’s 830,000 metric tonnes per year polypropylene site was one of the last outstanding milestones for the oil refining and petrochemical complex in its commissioning sequence, which has been taking place since January 2024.
“Polypropylene production has now started, with supplies being distributed in 25kg bags, and has already threatened to upend the domestic market,” two market sources had told Platts, part of S&P Global Commodity Insights.
One trade source said the Dangote Group began preemptively offering polypropylene supplies as early as February.
The President of the Dangote Group, Aliko Dangote, previously set out hopes that the complex would fully cover some 250,000 metric tonnes per year of domestic demand for polypropylene, which is commonly used in plastic packaging and textiles.
Once fully operational, the Dangote facility is set to become Africa’s largest polypropylene production site, producing from two polypropylene units with capacities of 500,000 mt/year and 330,000 mt/year.
S&P Global reports that market participants have warned that the new capacity could quickly capture market share in the existing polypropylene homopolymer market, which has so far been concentrated at Indorama Eleme’s Port Harcourt refinery in Nigeria and drawn imports from the Middle East.
In the oil market, the giant privately owned Dangote complex has so far shown an ability to significantly undercut local producers, triggering steep discounts in the gasoline retail market from the Nigerian National Petroleum Company Limited.
Already, the refinery has substantially displaced traditional trade routes for oil products that would typically flow from Europe to West Africa, serving a growing share of the domestic market as NNPC’s newly restarted Port Harcourt and Warri refineries have suffered outages.
The Dangote Group had said in February that the refinery should reach its full 650,000 barrels per day capacity by March. However, this is subject to crude availability.
The reports stated that there is no updated timeline for the petrochemicals site to reach full utilisation.
Earlier, the company said its $2bn petrochemical plant located in Ibeju-Lekki, Lagos State, is designed to produce 77 different high-performance grades of polypropylene in the country.
With a turnover of $1.2bn, the Dangote Petrochemical plant, situated alongside the Dangote Refinery, is positioned to cater to the demands of the growing plastic processing downstream industries, not only in Africa but also in other parts of the world.
Giving an update on the petrochemical plant in Lagos, Group Executive Director, Strategy, Capital Projects & Portfolio Development, Dangote Industries Limited, Devakumar Edwin, said the Dangote Petrochemical will drive massive investment in the downstream industries, generating huge value addition in the country, creating employment, increasing tax revenues, reducing foreign exchange outflow, and increasing the country’s Gross Domestic Product.
“We have 77 types of polypropylene, which can go for different uses that we can produce from our petrochemical plant. Currently, the plant is capable of producing about 900,000 tonnes of polypropylene per annum. Our Petrochemical plant should be the biggest in Africa.
“Right now, raw materials from polypropylene are imported into the country. There is no foreign exchange for manufacturers to import raw materials. The Dangote Petrochemical plant is going to take care of this challenge.
“When the raw materials are locally available, there will be many more people who will be willing to invest in the economy. So, it is not just the savings of foreign exchange from petrochemical products’ importation; the country’s downstream sector will also benefit hugely from the availability of petrochemicals in the country,” Edwin said last year.
Polypropylene is a synthetic fabric made from petroleum-based thermoplastic polymers. Its source material is propylene gas, a by-product of oil and natural gas production. The essential monomer propylene is first extracted from crude oil in gas form.
Polypropylene is used for a wide number of different products, including plastic packaging, plastic parts for machinery and equipment, fibres and textiles, piping systems, chairs, medical or laboratory use, among others.