The coming onboard of Dangote Refinery with the full array of its products is expected to change Nigeria’s business narrative as products from the 650,000 barrels per day petrochemical plant will boost the nation’s productivity through the manufacturing sector.
History & Strategy
Dangote Industries Limited is a diversified and fully integrated conglomerate with an annual group turnover in excess of $4 billion (2016) with vibrant operations in Nigeria and Africa across a wide range of sectors including cement, sugar, salt, condiments, packaging, energy, port operations, fertilizer, and petrochemicals.
Its core business focus is to provide local, value-added products and services that meet the ‘basic needs’ of the populace through the construction and operation of large scale manufacturing facilities in Nigeria and across Africa. Its focus is on building local manufacturing capacity to generate employment, reduce capital flight and increase local value addition.
The Dangote Group corporate strategy has evolved as its businesses have grown, matured, and diversified into new sectors and regions over the last four decades.
Starting out as a bulk commodity trading concern in the 1970s encouraged by the liberalized commodity import regime of the then Government of Nigeria, by the late 1990s its strategy had transformed to a focus on manufacturing for import substitution.
The early 2000s saw the Group’s approach further adjust to strategic asset acquisition in line with the then Government’s privatization policies. This set the stage for the next phase in our strategic plan for the next decade; expansion and backward integration.
Executive Leadership
The leadership team of Dangote Industries Limited, parent company of Dangote Refinery, comprises 10 members, led by Aliko Dangote, President/Chief Executive.
Aliko Dangote is the founder and president/chief executive of the Dangote Group, the largest conglomerate in West Africa.
The Group currently has a presence in 17 African countries and is a market leader in cement on the continent. One of the Group’s subsidiaries, Dangote Cement Plc, is the largest listed company in West Africa and the first Nigerian company to join the Forbes Global 2000 Companies list.
Internationally, Dangote sits on the board of the Corporate Council on Africa and is a member of the Steering Committee of the United Nations Secretary-General’s Global Education First Initiative, the Clinton Global Initiative, the McKinsey Advisory Council, and the International Business Council of the World Economic Forum.
He was named Co-chair of the US-Africa Business Center, in September 2016, by the US Chamber of Commerce. In April 2017, he joined the Board of Directors of the Clinton Health Access Initiative, which is helping countries build the systems necessary to provide health services to their people.
A dedicated philanthropist, Dangote made an initial endowment of $1.25 billion to the Dangote Foundation in March 2014, enabling it to scale up its work in health, education and economic empowerment. In addition, he is collaborating with the Bill and Melinda Gates Foundation to fight polio. He is also on the Board of ONE, the anti-poverty group, co-founded by Bono.
A graduate of Al-Azhar University in Cairo, Egypt, Dangote began his business career in 1978, trading in rice, sugar and cement, before he ventured into full-scale manufacturing. In 2013, Forbes listed him as the ‘Most Powerful Man in Africa.’ In April 2014, TIME Magazine listed him among its 100 ‘Most Influential People in the World.’ He also made the list of CNBC’s ‘Top 25 Businessmen in the World’ that changed and shaped the century.
“It is envisaged that the refinery will significantly reduce fuel imports, save foreign exchange, and will contribute to stabilising the naira, lowering inflation, and reducing the cost of living among others”
The new inclusion
The new subsidiary of the Group is the petrol chemical plant sited in the Lekki Free-Zone in Lagos, Nigeria.
The petrochemical plant comprises Fertilizer plant, Oil refinery and a power generating plant. The oil refinery is 650,000 barrels per day (BPD) integrated refinery project which is currently Africa’s biggest oil refinery and the world’s biggest single-train facility.
The Pipeline Infrastructure at the Dangote Petroleum Refinery is the largest anywhere in the world, with 1,100 kilometers to handle 3 Billion Standard Cubic Foot of gas per day. The Refinery alone has a 435MW Power Plant that is able to meet the total power requirement of Ibadan DisCo.
The Refinery will meet 100 percent of the Nigerian requirement of all refined products and also have a surplus of each of these products for export. It is a multi-billion dollar project that will create a market for $21 billion per annum of Nigerian crude. It is designed to process Nigerian crude with the ability to also process other crudes.
Dangote Fertiliser Plant is Africa’s largest Granulated Urea Fertiliser complex. The plant occupies 500 hectares of land in Lekki Free Trade Zone, Lagos Nigeria. It was built at a cost of $2.5 billion.
With Nigeria estimated to need about 5 to 7 million metric tonnes per annum of fertiliser and with the current level of fertiliser consumption in the country which is 1.5 million metric tonnes, Dangote Fertiliser complex was established to produce 3 million metric tonnes per annum of urea fertiliser in phase 1.
Dangote Fertiliser works with Farmer Associations, Corporate Farms, NPK Blenders, NGO/development partners and State Governments all over Nigeria, as well as governments across Africa and beyond who are looking for a sustainable approach to improve soil and farm yields. The coming on stream of Dangote Fertilizer would surely make Africa self-sufficient in food production and a net exporter of food to the world.
Impact on economy
It is envisaged that the refinery will significantly reduce fuel imports, save foreign exchange, and will contribute to stabilising the naira, lowering inflation, and reducing the cost of living among others. The refinery would lead to the protection of forex revenue of around $20bn a year at current market prices and saving of $14bn a year through domestic supplies of petroleum products.
It would also create a minimum of 100,000 indirect employment through retail outlets and ease availability of petroleum products in the country.
Beyond its role in petroleum refining, the Dangote Refinery also represents a significant boost to Nigeria’s industrial and manufacturing sectors.
It will produce crucial petrochemicals such as polypropylene, polyethylene, base oil, and linear alkylbenzenes that will grow in many sectors, including the agricultural sector.
Previously, some players in the packaging industry had to shut down due to the difficulty in accessing foreign exchange to import polypropylene.
This issue is expected to become a thing of the past as Dangote proudly declared, “We are committed to ensuring that starting in October, there will be no need to import polypropylene. Our petrochemical plant will be fully capable of meeting all local demands.”
The availability of these raw materials is set to revive related sectors and industries that had nearly vanished due to the prohibitive costs of importation.
While importation provides immediate, short-term gains, it rarely supports sustainable growth. In contrast, industrialisation fosters long-term economic development by creating jobs, boosting productivity, driving innovation, and improving infrastructure.
