The Manufacturers Association of Nigeria (MAN) has stated that the Dangote Petroleum Refinery & Petrochemicals’ production of polypropylene will revive Nigeria’s struggling textile industry and save the country $267 million in import costs.
In an interview on the Channels Business Incorporated Programme, the Director-General of MAN, Segun Kadir-Ajayi, highlighted the struggles of the textile industry, which was once thriving and employed over 25,000 workers aged between 18 and 40 in the northern region alone. He explained that many companies have been forced to shut down due to the absence of local polypropylene production and the scarcity of foreign exchange required for imports.
He further stated that the production of polypropylene by Dangote Petroleum Refinery & Petrochemicals will ensure that Nigeria, which currently imports 90% of its annual polypropylene requirements (amounting to 250,000 metric tonnes), will now become a net exporter, generating foreign exchange to strengthen the economy.
“For us in the manufacturing sector, this is a welcome development. It covers more than 250,000 metric tons, which constitutes our national demand, which has been severely lacking. You can imagine the sectors it will impact—the textile industry, the plastic industry, the furniture industry. We are looking at an amount in the region of $267 million being saved. This is the amount spent every year in scarce dollars to import these materials. It is a welcome development for manufacturers, as it will incentivize investment in the sector,” he said.
Kadir, who lamented how the collapse of the textile industry led to widespread unemployment, stated that with the local production of polypropylene, manufacturers will no longer need to rely on imported polypropylene. This, he added, will help reduce their costs and improve efficiency.
“We have seen the global trend of the textile industry relying on the petrochemical industry. So, you can imagine what boost this is going to bring to the sector.
“And that it is now available locally and does not require that we continue to look for foreign exchange to be able to meet our demands. It is actually cheering news for manufacturers,” he said.
He urged the federal government and other stakeholders to support the local production of polypropylene through incentives, stating that this would attract more investment into the sector and increase manufacturing’s contribution to GDP.
He added that this would significantly aid the government’s goal of achieving a $1 trillion economy.
“If the economy is going to save $267 million in imports at a time when the current government is striving to create a $1 trillion economy, this is a significant saving, especially considering the scarcity and inadequacy of foreign exchange supply. When we see champions like this blazing the trail, showing that we can even become a net exporter, it is certainly worthy of support. The NNPC has a capacity of 13,000 metric tons. When you add this to what Indorama has, along with the massive supply we will have from Dangote, we will become a net exporter. This means all our imports from Saudi Arabia, South Africa, South Korea, China, and India will be completely eliminated. We can now aim for self-sufficiency and even export for foreign exchange,” he added.
Kadir stated that polypropylene production, with its far-reaching impact, will extend beyond the Dangote Refinery, resulting in significant job creation, increased tax revenue for the government, higher investment in the sector, foreign exchange earnings, and supporting the manufacturing sector in making a substantial contribution to the country’s GDP, among other benefits.
“I believe that what we should then be looking forward to is the government’s deliberate efforts to incentivize more investment in that sector and looking for support that will allow us to patronize what is made in Nigeria. We are able to earn the respect for the patronage of made-in Nigerian products in terms of price and quality of delivery,” he stressed.
Dangote’s $2 billion Petrochemical Plant in Ibeju-Lekki, Lagos, is designed to produce 77 grades of polypropylene.
With a capacity of 900,000 metric tonnes per year and a turnover of $1.2 billion, it aims to meet the growing demand in plastic processing industries both in Africa and globally.
The plant is expected to boost investment in downstream industries, create jobs, increase tax revenues, reduce foreign exchange outflow, and contribute to the country’s GDP growth.
