Nigeria’s petrochemical market set to hit $5.8bn in 2018

As the growth of Nigeria’s middle class over the past decade drives the consumption of petrochemical products like fertilizers and food packaging, Africa’s largest oil producer appears on its way to becoming a petrochemical hub with three plants expected to bring fertilizer output to 7.2 million metric tons next year, along with 900,000 thousand metric tons of polypropylene and 860,000 metric tons of polyethylene, Business Day reports.

These capacity additions could value Nigeria’s petrochemical market at $5.8 billion per annum by 2018. Nigeria’s current biggest fertilizer producer, Indorama Eleme Petrochemical Limited, commissioned its expanded plant in July 2017, pushing capacity to 1.5 million metric tons of urea and 4,000 metric tons of NPK fertilizer. The company’s plant is also designed to produce 120,000 metric tons of polypropylene and 360,000 metric tons of polyethylene per year. Ethylene is the foundation for making plastics essential to many consumer and industrial goods.

Notore Chemical Industries is also expanding its facilities and plans to ramp up production by 1.75 million metric tons of urea and 1 million metric tons of NPK. Dangote Fertilizer Plant, the biggest planned capacity in the world, is set to come on stream in January 2018, producing about 3 million metric tons of urea yearly. It will also produce about 780,000 metric tons of polypropylene and 500,000 metric tons of polyethylene.These plants will raise Nigeria’s fertilizer capacity to 7.2 million tons per annum (p.a) at an average cost of N150,000 per metric ton, putting the value of output at N1.088 trillion ($3.5bn). According to S&P Platts, the average price of polypropylene is $1,212 per ton.

Dangote’s plant is expected to add 780,000 capacity of polypropylene while Indorama currently does 120,000 metric tons of polypropylene, valuing the combined output at $1.09 billion.