Dangote commissions US$2 billion fertilizer plant at opportune time

NIGERIA – Nigerian Industrial conglomerate, Dangote Group, has inaugurated a US$2.5 billion fertilizer plant targeting both the domestic and international market, contributing to global supply of the commodity.

Agriculture is a lifeline for Nigeria’s economy, contributing 25.8% of its 173 billion dollars gross domestic product in 2021. However, farmers are sometimes constrained with limited supplies such as fertilizer and improved seedlings.

With the new fertilizer plant having a production capacity of 3 million metric tons annually of urea fertiliser in phase 1, it is expected to meet the local demand and drive utilization of the input.

Nigeria’s fertilizer utilization is set at 5 to 7 million metric tonnes per annum with the current level of consumption in the country totalling about 1.5 million metric tonnes.

The country has a low fertilizer utilization rate compared to other countries as according to the World Bank, with the West Africa nation consuming around 20 kg of fertiliser per hectare of arable land in 2018, compared with 73 kg in South Africa and 393 kg in China.

‘‘We expect the rise of a new breed of agropreneurs who will add value to farming and make the nation self-sufficient in food production,’’ said Nigeria Central Bank Governor Godwin Emefiele, inviting many Nigerians to “now take up agriculture as a business.”

The opening of the facility has happened at an opportune time when the global fertilizer market has been jolted by the Ukraine-Russia war.

Fertilizer from the plant located in an industrial zone in Lagos will be exported to many countries including the U.S., Brazil, India and Mexico, said Aliko Dangote, Africa’s richest man and owner of the plant.

Across the world, high fertilizer costs already threaten farmers amid sanctions on Russia, a major global supplier of fertilizer, where authorities in March urged domestic producers to temporary halt exports.

Fertiliser prices have been rising at a time when planting usually picks up around the world, especially after Russia, the world’s biggest exporter of fertiliser, invaded Ukraine last month. The war has also disrupted shipping.

“The new plant will make Nigeria self-sufficient in fertilizer production with excess capacity to export to other African markets and the rest of the world.

“Our goal is to make fertilizer available in sufficient quantity and quality for our teeming farmers, assuring greater agricultural output,” said Dangote.

With the new facility, Dangote has heightened competition in the sector currently served by players such as OCP Africa currently establishing a new blending plant, Notore, which has the capacity to produce 500,000 metric tonnes per annum of urea, and Singapore-owned Indorama Eleme Petrochemicals Ltd, which plans to double its annual output of urea fertilizer to 2.8 million tonnes.

Algeria partners with China beef up fertilizer production

Meanwhile in Algeria, the government has partnered with Chinese investors to develop the country’s first integrated mining and fertilizer production project.

The project worth US$7 billion, is undertaken by the state owned Asmidal and Manal companies in collaboration with Wuhuan Engineering and Yunnan TIAN’AN Chemical, two Chinese companies specializing in production of nitrogen and phosphate fertilizers.

Dubbed the Algerian Chinese Fertilizers Company (ACFC), the new joint venture company is 56% owned by Algeria and 44% by the two Chinese entities.

Once fully operational it will have an annual processing capacity of 5.4 million tons, primarily focused in meeting the national demand for fertilizers for the agricultural sector.

“This project will mobilize a lot of financial, human and technical resources. It will have social and economic impacts, particularly in the east of the country. It concerns four wilayas, but it will indirectly affect up to seven wilayas,” said Mohamed Tahar Heouaine, CEO of Asmidal, a subsidiary of the oil and gas group Sonatrach.

Around 12,000 jobs are thus expected during the construction phase, 6,000 direct jobs during the operation phase in addition to 24,000 indirect jobs.

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