Nigerian industrialist Aliko Dangote has announced plans to quadruple his group's fertiliser production capacity to 12 million tonnes a year, with six new production lines expected to be completed between the end of 2028 and early 2029.
Dangote made the announcement on Tuesday while speaking to Kenyan and East African institutional investors during discussions on the initial public offering of the Dangote refinery.
The group currently has the capacity to produce three million tonnes of fertiliser annually. Dangote said the planned expansion would involve constructing six production lines at the same time, raising total output to 12 million tonnes.
“And that is why we are working to expand our current three-million-tonne capacity by building six additional production lines simultaneously. All six lines are expected to be completed by the end of 2028 or the beginning of 2029, bringing our total production capacity to 12 million tonnes and 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 plans come after major changes in the global fertiliser market following Russia's invasion of Ukraine in February 2022. Russia and Belarus were key suppliers before the war, with the World Bank saying in April 2022 that the two countries together accounted for about 20 per cent of global fertiliser exports.
The World Bank also said 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.
On October 26, 2022, 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.
The FAO said fertiliser prices had increased by as much as 150 per cent in some countries in the region. The World Bank had also warned in April 2022 that rising fertiliser costs could affect food production if farmers could not obtain or afford the inputs required for upcoming planting seasons.
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 said the group had already obtained a licence for potash and was waiting for approval for phosphate. He said the plans include production of 2.1 million tonnes of diammonium phosphate (DAP).
“We are opening lending plants in 20 African countries. We are doing potash and phosphate from Congo Brazzaville. We've already gotten the license of the potash last week. We are waiting for the phosphate, and we are going to do DAP 2.1 million tons.”
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.
“Africa is going to be 2.5 billion people by 2050. 2050 is just 24 years from now. So 24 years from now, 24 really is not a very, very long time because if you look at it today, this today is almost gone. We are looking now for tomorrow. So we have no time to wait.”
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.
The fertiliser expansion is part of Dangote's wider plans to build agricultural and industrial supply chains within Africa. Increased production on the continent is expected to help reduce dependence on international markets and improve access to fertiliser for farmers.