The Dangote Refinery is set to begin polypropylene production by the end of October 2024, effectively curbing Nigeria’s imports of the product which is a crucial raw material in various industries, including packaging, textiles, and automotive parts.
Chairman of Dangote Group, Aliko Dangote, announced that as the refinery edges closer to full operational status, it will meet the local demand for polypropylene, previously reliant on imports valued at approximately $267.7 million annually.
This shift is expected to significantly benefit various industries, including packaging, textiles, and automotive manufacturing, which have faced challenges due to foreign exchange issues and long shipping times.
Dangote emphasised that the refinery is prepared to supply the market fully, alleviating the struggles of local manufacturers who have had to stockpile due to import delays.
The production of polypropylene will not only reduce costs associated with importation but also enhance the stability of the Nigerian economy by decreasing reliance on foreign products. With this development, Nigeria aims to become self-sufficient in polypropylene production, marking a significant milestone in its industrialisation efforts.
“Let me assure you of one thing, Nigeria from October will not import any more polypropylene, which used to be about a quarter of a million tons,” he said. “No more imports of polypropylene.”
Polypropylene, a versatile plastic used in a wide range of applications from packaging and textiles to automotive parts and medical equipment, is currently imported in large quantities by Nigerian manufacturers.
Annual polypropylene import into Nigeria is estimated at $267.7 million, according to TradeMap, which peaked at $407 million in 2022.
The latest data by the National Bureau of Statistics (NBS) revealed that the country brought in the product valued at N99.6 billion in the first quarter (Q1) of this year, placing it at number 12 on the top 15 products imported by Nigeria from the rest of the world.
“We will satisfy the market 100 percent,” said Dangote. “This is so because these industries that are struggling and having to go and look for FX that they will not get and still have to keep stock for four or five months because it’s not easy shipping, clearing, and whatever, can buy as they need.”
He noted that the refinery is determined to do this because it will reduce the cost of importation and scramble for foreign exchange.
“We are also in the business. And our demand also as Dangote is huge. We have Dangote Packaging and are one of the biggest demand users of polypropylene,” he added.
Saudi Arabia, South Africa, South Korea, China, and Vietnam were the top importers of polypropylene into Nigeria in the first quarter of 2024, covering 90 percent of Nigeria’s demand.
Polypropylene is a versatile plastic used in a wide range of packaging applications. It’s often preferred over materials like cellophane, metal, and paper due to its flexibility, durability, and cost-effectiveness.
It is used in food and confectionery, tobacco, and clothing industries in flexible form while in rigid form, polypropylene can be found in caps, closures, pallets, crates, bottles, JIT storage solutions, and containers for products like condiments, detergents, toiletries, and yoghourt.
Polypropylene’s versatility and benefits make it a popular choice for packaging across many industries.
“The polypropylene market is growing rapidly owing to the rising demand from the packaging industry. This high demand is associated with the increasing consumption of packaged food and beverages,” said Fortune Business Insights, a research firm.
“It also helps in reducing the possibility of food deterioration and quality loss.”