Nigeria’s Dangote Refinery Starts up Polypropylene Productio

Wedoany.com Report-Mar 11, Nigeria's new Dangote refinery has commenced the startup of its polypropylene facility in Lagos, market sources told Platts March 10.

Starting up Dangote's 830,000 mt/year polypropylene site was one of the last outstanding milestones for the oil refining and petrochemical complex in its commissioning sequence, which has been taking place since January 2024.

Polypropylene production has now started, with supplies being distributed in 25 kg bags, and has already threatened to upend the domestic market, two market sources told Platts, part of S&P Global Commodity Insights.

One trade source said that the Dangote Group began preemptively offering polypropylene supplies as early as February. A company representative was not immediately available for comment.

Dangote Group CEO Aliko Dangote previously set out hopes that the complex would fully cover some 250,000 mt/year domestic demand for polypropylene, which is commonly used in plastic packaging and textiles.

Once fully operational, the Dangote facility is set to become Africa's largest polypropylene production site, producing from two polypropylene units with capacities of 500,000 mt/year and 330,000 mt/year.

Market participants have warned that the new capacity could quickly capture market share in the existing polypropylene homopolymer market, which has so far been concentrated at Indorama Eleme's Port Harcourt refinery in Nigeria and drawn imports from the Middle East.

In the oil market, the giant privately owned Dangote complex has so far shown an ability to significantly undercut local producers, triggering steep discounts in the gasoline retail market from state oil company NNPC.

Already, the refinery has substantially displaced traditional trade routes for oil products that would typically flow from Europe to West Africa, serving a growing share of the domestic market as NNPC's newly restarted Port Harcourt and Warri refineries have suffered outages.

A Dangote executive told Platts in February that the oil refinery should reach its full 650,000 b/d capacity by mid-March, without providing an updated timeline for the petrochemicals site to reach full utilization.

Platts last assessed the CFR West Africa PP raffia spot price at $1,090/mt March 5, unchanged on the week.