Nigerian industrialist Aliko Dangote has announced plans to quadruple his group's fertiliser production capacity to 12 million tonnes a year. The expansion, expected to be completed by the end of 2028 or early 2029, will involve constructing six new production lines. Dangote made the announcement while speaking to Kenyan and East African institutional investors during discussions on the initial public offering of the Dangote refinery.
The current production capacity of Dangote's fertiliser plant stands at three million tonnes annually. The planned expansion will increase total output to 12 million tonnes, making it the largest fertiliser plant in the company’s history, surpassing Qatar. Dangote said the decision to increase production was driven by the need for Africa to strengthen its own supply of fertiliser and reduce its reliance on imported farm inputs.
The global fertiliser market has experienced significant changes following Russia's invasion of Ukraine in February 2022. Russia and Belarus, key suppliers before the war, accounted for about 20 per cent of global fertiliser exports. The World Bank noted that the two countries supplied 38 per cent of global potassic fertilisers, 17 per cent of compound fertilisers and 15 per cent of nitrogenous fertilisers.
The war disrupted international trade and pushed up energy costs, placing additional pressure on fertiliser producers and farmers. Fertiliser production depends heavily on natural gas, making higher energy prices another challenge for the industry. The Food and Agriculture Organisation warned that the war in Ukraine, effects of the Covid-19 pandemic and climate change had made fertilisers less affordable and harder to access for vulnerable smallholder farmers in Africa.
Dangote said the disruptions showed why African countries need to increase their own fertiliser production. Beyond the expansion of existing capacity, the group plans to establish fertiliser plants in 20 African countries. It is also pursuing access to raw materials such as potash and phosphate to support production across the continent.
Dangote revealed that the group had already obtained a licence for potash and was waiting for approval for phosphate. The plans include production of 2.1 million tonnes of diammonium phosphate (DAP). He linked the expansion to Africa's growing population and the rising need for food, saying the continent would have about 2.5 billion people by 2050.
Dangote also said the group intends to list its fertiliser business sometime next year. The listing would give members of the public an opportunity to buy shares in the business and receive dividends. He said the plan could allow dividend payments to reach as many as 10 million shareholders.
Key points
- Dangote aims to quadruple fertiliser production capacity to 12 million tonnes by 2029.
- The expansion will involve constructing six new production lines.
- Dangote plans to establish fertiliser plants in 20 African countries.
