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Dangote’s $2.5bn Fertiliser Plant Expected to Generate Over $400m Annual Foreign Exchange

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Aliko Dangote - Investors King

Days of persistent forex scarcity may be coming to an end in Nigeria as Dangote’s $2.5 billion fertiliser plant is projected to realise more than $400 million in foreign exchange every year.

The plant scheduled for launching on Tuesday, 22nd March 2022, occupies 500 hectares of land in Lekki Free Trade Zone, Lagos Nigeria.

According to the Dangote Group, President Muhammadu Buhari will visit Lagos for the inauguration of the plant.

Buhari will be joined by the Lagos Governor, Babajide Sanwo-Olu as well as the Minister of Agriculture and Rural Development, Dr. Mahmouds Abubakar, the Minister of Industry, Trade and Investment, Adeniyi Adebayo and Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, for the inauguration ceremony of what has been described as Africa’s largest granulated urea fertiliser complex.

Although arguably rich in agriculture and blessed with fertile lands, Nigeria’s dependency on fertiliser is growing by the day and this is also important for the mass production of certain food products across the country. The Dangote fertiliser plant is also coming up at a time when stakeholders have expressed the need to create an even better Nigeria where food security is assured.

According to Dangote, Nigeria is estimated to need about five to seven million metric tonnes of fertilisers per annum. However, the current level of fertiliser utilisation in Nigeria is 1.5 million metric tonnes. The company also went ahead to disclose that it has been positioned to produce over three million metric tonnes per annum of urea fertiliser in phase one of operations. Dangote also revealed that the company will work with agriculture stakeholders and development partners with state governments across Nigeria, as well as across Africa – provided that they are looking for a sustainable approach to improve soil and farm yields.

Investors King also gathered that plans are already on the way for expanding production to provide more than the plant’s three million metric tonnes per annum capacity and to produce multiple grades of fertilisers to meet soil, crop and climate-specific requirement for the African continent.

Dangote is one of the few Nigerian-owned enterprises that has made strong commitments to providing sustainable solutions across a number of sectors and the diversification of the business to the agriculture sector in Nigeria is also one that has been welcomed across boards. Over the years, Dangote has created sustainable environmental management practices, and products through a proactive approach that addresses the challenges of climate change and global warming.

While Dangote is also making a commitment to the sustainability of the environment, the establishment of this fertiliser plant will also lead to employment opportunities for Nigeria and reduce the country’s importation of fertilisers.

Also, the plant is expected to generate over $400 million annual foreign exchange from export to other African countries.

During the visit by the president, the unveiling of the plaque, a facility tour of the fertiliser plant and an inspection tour of the 650,000 oil refinery and 900,000 polypropylene plant as well as the Lekki Deep Sea Port is also expected to be undertaken.

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Merger and Acquisition

Otedola Moves to Sell Part of Geregu Power Plc to FEDA

Afreximbank to acquire part of Geregu Power plant

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Geregu Power

Billionaire Femi Otedola-owned energy company, Geregu Power Plc is in talks with the Fund for Export Development in Africa (FEDA) for the acquisition of part of the energy company.

The company stated in a statement signed by Akinleye Olagbende, Company Secretary and made available on the Nigerian Exchange Limited (NGX).

Geregu Power hereby notifies “Nigerian Exchange Limited (the Exchange) and the investing public of its discussions with the Fund for Export Development in Africa (FEDA) for the acquisition of a portion of Geregu Power Plc shares. FEDA is the impact development arm of the Africa Export and Import Bank (Afreximbank),” the company stated.

According to the energy firm, talks are presently ongoing and “where these talks progress to a more advanced stage, the company will notify the Exchange and the investing public in line with the rules of the Exchange.”

In October, Geregu Power listed 2.5 billion shares at N100 a unit on the Main Board of the NGX. This puts the company’s market value at N250 billion and also in a better position it to raise capital to bid for Geregu II as it is presently doing.

Speaking on the listing, the Chairman, Board of Directors, Mr. Femi Otedola, CON, said “the listing of the company was the actualization of a vision to bring world-class standards in governance sustainability, and business processes to the Company and the Nigerian electricity sector.”

He added that “listing on the Main Board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders”.

Otedola is the largest shareholder in FirstBank and also holds a 99% stake in Amperion Power, the owner of the Geregu Power Plant.

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Merger and Acquisition

Access Bank Acquires Indirect Stake in Sigma Pensions

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Access bank

Access Holdings on Friday announced it has completed the acquisition of an indirect equity stake in Sigma and the merger of its subsidiary, First Guarantee Pension Limited (FGPL) with Sigma.

According to the bank, following the sanction of the Scheme of Merger between Sigma and FGPL by the Federal High Court on December 1, 2022, FGPL has been dissolved without winding up leaving Sigma as the surviving entity, according to Access Holdings.

Commenting on the transaction, Dr Herbert Wigwe, Group Chief Executive of the Corporation, said “Following the successful completion of the merger, our plan is to leverage the synergies of these entities, as well as the Corporation’s expansive distribution network, strong risk management culture and best-in-class governance standards to create a formidable pension funds administration business.”

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Company News

Dangote Group Dismisses Rumours of Plan to Rise Cement Price

Dangote Cement says no price increase

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Africa’s leading cement producer, Dangote Cement Plc has dismissed the rumor that it plans to increase the price of its products.

The clarification became necessary following a recent publication that Dangote Cement plans a fresh increase.

Recently, there has been some publication (Not Investors King) about a potential increase in the price of cement. The publications noted that the increase will be a result of the high cost of fuel among other prevailing issues. 

According to the Senior Manager, branding and communication, Dangote Industries Limited, Mr Sunday Esan, “Dangote Cement is not embarking on a price increase”, stating that the increase is mere speculation.

Meanwhile, Dangote Cement in the third quarter of 2022, recorded an increase in the overall volume of cement sales by 6.2 percent to 20.8 metric tons in the third quarter of 2022.

According to the company’s Chief Executive Officer, Michel Puchercos, this was achieved, despite the elevated inflation caused by a very volatile global environment.

Similarly, while speaking on the increase in the price of fuel, Puchercos said “to mitigate the impact of the significant increase in energy and AGO costs, we are strengthening our efforts to ramp up the usage of alternative fuels”.

“We are on track to commission our Alternative Fuel feed system at Obajana lines I and V, and Ibese line II in November. In addition, we are ramping up our investment in Compressed Natural Gas (CNG), to reduce our AGO usage,” he added. 

Investors King understands that Dangote Cement is Africa’s leading cement producer with nearly 51.6Mta capacity across Africa. Although it has a few competitors which include BUA Cement, the company supplies most parts of Nigeria.

In addition, Dangote Cement has operations in 10 African countries. 

Its production plant in Obajana, Kogi state, is the largest in Africa with 16.25Mta of capacity across five lines while the Ibese plant in Ogun state has four cement lines with a combined installed capacity of 12Mta.

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