In a strategic move to expand Nigeria’s non-oil export base and reduce petrochemical imports, Dangote Petroleum Refinery and Petrochemicals has signed an export agreement with Vinmar International LLC, a Houston-based petrochemical distributor with operations covering over 100 countries, to supply polypropylene to international markets.
Announced at the official launch of the $2 billion petrochemical facility in Lagos’ Lekki Free Trade Zone on Wednesday, the deal marks a major step toward generating foreign exchange from value-added petrochemical exports – a sharp pivot from its decades-long reliance on raw commodity sales.
“We’re pleased to partner with Vinmar to introduce Dangote Polypropylene to the global markets. Dangote Polypropylene will follow other Dangote products to become a global brand known for quality and reliability,” said Fatima Aliko Dangote, Dangote Group Executive Director.”
This new facility boasts a combined capacity of 830,000 metric tonnes annually from two units (500,000 mt/year and 330,000 mt/year, respectively), and is designed to produce 77 grades of polypropylene, with an expected turnover of $1.2 billion.
The project aims to not only position Nigeria to meet local demand but also emerge as a net exporter.
Currently, Nigeria imports about 250,000 metric tonnes of polypropylene annually, accounting for roughly 90% of local demand.
Exports through Vinmar are expected to begin in phases as production stabilises. Operation kick off in March 2025, with initial supplies to the domestic market in 25 kg bags, which according to the Manufacturers Association of Nigeria, could save the Country import savings of $267 million in import cost.
Earlier this month, production capacity rose from 52 million to 36 million polypropylene bags, targeting the broader African market.
Although specific revenue figures are not publicly disclosed, these exports are expected to gradually boost Nigeria’s Foreign Exchange inflows as Dangote taps into the Global market.
Market positioning and Investment signals
Once fully operational, the Dangote facility is on course to become Africa’s largest polypropylene production site, overtaking existing capacities in Egypt and South Africa.
For instance, Egypt’s Egyptian Propylene & Polypropylene Company (EPP), produces 350,000 metric tonnes annually. According to Daily News, EPP’s 2021 sales exceeded $400 million, with 75% exported primarily to Turkey, Latin America, and Europe.
In the broader context, Egypt’s total foreign exchange earnings hit $159.6 billion in the 2023/2024 fiscal year, a 30.8% increase from the $121.9 billion the previous year, driven in part by a notable rise in foreign direct investment (FDI) to $32.9 billion.
In contrast, Dangote’s plant is set to more than double EPP’s capacity, solidifying Nigeria’s position as a leading petrochemical export and investment hub.
Macroeconomics Signals
The development comes as Nigeria seeks to rebuild its foreign reserves, after the 2024 fiscal year, which dipped below $34 billion, and cut a $10 billion annual import bill on refined products and petrochemicals combined.
Dangote’s polypropylene exports could provide a modest but crucial boost to Nigeria’s non-oil export revenue, which rose to $5.45 billion in 2024 from $4.5 billion the previous year, according to the data from Nigerian Export Promotion Council (NEPC).