Aliko Dangote on a $2.5 billion fertilizer factory: ‘massive orders from the EU’

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The newly launched Aliko Dangote fertilizer plant is expected to earn Nigeria about $5 billion in export earnings.

IN MARCH, AFRICA’S RICHEST MAN, ALIKO DANGOTE, opened a $2.5 billion urea and ammonia fertilizer plant in Nigeria commissioned by the country’s President, Muhammadu Buhari .

In an interview with FORBES AFRICA, Dangote, Chairman and CEO of Dangote Group, the continent’s largest cement producer, said the new fertilizer plant, which has already started production, could enable Nigeria earn about $5 billion in export revenue.

“We are getting huge demand from all over the world with massive orders from the European Union,” says the billionaire entrepreneur, who is also opening an oil refinery, which is expected to be the largest in Africa with a production capacity of 650 000 barrels per day, by the third quarter of 2022.

The war in Ukraine and sanctions against Russia, the world’s largest fertilizer exporter, have disrupted global supply chains, inflaming the price of fertilizer for Africa’s smallholder farmers. Fertilizers provide healthy nutrients for crops and experts say the current stalemate can stifle agricultural growth and lead to hunger on the continent.

“As they say, when Nigeria sneezes, the rest of Africa catches a cold and that is exactly what happens. The Dangote fertilizer plant is important for Africa because with the war between the Ukraine and Russia, it is only a matter of months that parts of Africa will be plunged into famine. We need agricultural solutions that do not rest only with the West but rather with Africa” , Franklin Cudjoe, founding president and managing director of the IMANI Center for Policy and Education, a think tank based in Accra, Ghana, told FORBES AFRICA.

Nitrogen, potash and phosphate which are important for the manufacture of fertilizers also come from Russia and Ukraine. The leading position of the countries also derives from their influence on the gas ecosystem. Fertilizers are a byproduct of ammonia created when mixing nitrogen and hydrogen gas.

“The price of nitrogen fertilizers has skyrocketed in recent months. In Europe, we are aiming for around 1,000 euros per ton. Now, if more developed economies in Europe are struggling with the cost of fertilizers, what do you think will be the impact on Africa,” asks Farouk Rabiu Mudi, President of the All Farmers Association of Nigeria (AFAN ).

The Dangote Fertilizer Plant, located in the Lekki Free Trade Zone, Lagos, sits on 500 hectares (over 1,200 acres) of land with a production capacity of three million metric tons of urea per year. The Dangote Group website cites the plant as the largest granulated urea fertilizer complex in Africa.

The oil refinery, also located in the same location, will have 1,100 km of subsea pipeline infrastructure to process 3 billion standard cubic feet (SCF) of commercially produced gas per day.

Nigeria has struggled for years to diversify its economy from oil dependence into other value-added sectors. Former Minister of Agriculture and President of the African Development Bank (AfDB), Akinwumi Adesina, has affirmed the need for Nigeria to diversify its export base towards a high-value market product that will continue to create wealth and value-added manufacturing.

The commissioning of the fertilizer plant by the Dangote Group is expected to boost investment in the sector and hopefully lead to self-sufficiency in food production for the continent.

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