African Chemical Industry Shifting from Raw Material Export to Local Processing

Dangote’s latest facility at the Lekki Complex extends far beyond the scope of conventional oil refining. In addition to its 400,000‑ton‑per‑year LAB plant, Dangote will also deploy Honeywell UOP’s Oleflex methodology to add 750,000 tons per year of propylene capacity, supporting regional demand in the plastics packaging, consumer goods, and manufacturing applications sectors. Linear alkylbenzene (LAB) is a key raw material applied in the production of domestic and manufacturing detergents as well as surfactants. Currently, Africa lacks extensive LAB production facilities, leaving the region heavily reliant on imports to this product. The African detergent chemicals market is valued at approximately US$85.6 billion, and Dangote aims to tap into this untapped segment.

Furthermore, this strategic arrangement is underpinned by the ongoing capacity expansion of the Lekki Refinery. The refinery has increased its crude processing capacity from 650,000 barrels per day to 700,000 barrels per day through performance testing, exceeding its nameplate capacity. Dangote plans to increase its total refining capacity to 1.4 million barrels per day by 2028, creating the world’s largest single-site refinery. Meanwhile, the group is advancing its fertilizer capacity expansion. The African Finance Corporation has approved $600 million in financing to increase Nigeria’s urea production capacity from 3 million tons per year to 9 million tons per year and to build a new 3-million-ton-per-year urea plant in Ethiopia. The LAB project has enabled Dangote to establish a third high-value‑added product line beyond fuels and fertilizers, driving the Lekki Complex’s transformation from a single‑refining operation into a diversified chemical‑items cluster.

The chlor-alkali plant project secured by Nuberg EPC is located in the Mlandizi District of Tanzania’s Coastal Region. With a designed daily capacity of 45 tons, the primary items are chlorine and caustic soda, while co-items include hydrogen, hydrochloric acid, sodium hypochlorite, fluid chlorine, and solid caustic soda. These items are broadly applied in aquatic environments treatment, papermaking, textiles, mining, and disinfection, among other fields. Chlor-alkali is a fundamental raw material to numerous manufacturing processes, and its availability immediately influences the cost structure and competitiveness of downstream manufacturing industries. In East Africa, chlor-alkali production capacity is currently extremely limited, and basic chemicals such as caustic soda and chlorine have long been reliant on imports. Tanzania boasts abundant natural soda ash resources, yet its chlor-alkali processing capacity has long remained undeveloped. Once the plant is commissioned, it will fill this gap and provide a critical supply of raw materials to the region’s manufacturing sector.

As an Indian EPC contractor, Nuberg has been steadily expanding into the Middle East and African markets in recent years, with this project marking the latest measure in its African strategy. The project employs cutting-edge process technologies and is scheduled to commence production in January 2027. In terms of scale, a daily production capacity of 45 tons places this chlor-alkali plant in the mid-range; however, its strategic significance lies in establishing East Africa’s first modern chlor-alkali production facility, providing both technical validation and a pool of skilled personnel to support future capacity expansion. Upon completion, the project is expected to meet a significant share of the demand to basic chemicals in Tanzania and neighboring countries, minimize reliance on imports, and reduce raw material costs across relevant industries.

Market participants consider that the two investments share the same underlying rationale: import substitution. Africa imports substantial volumes of chemical items each year, ranging from detergent raw materials to caustic soda and chlorine. This results in long supply chains, high costs, and heightened vulnerability to external market fluctuations. Dangote’s LAB project targets Africa’s $85.6 billion annual detergent chemicals market, while the Tanzania chlor-alkali plant aims to meet the rigid demand to basic chemicals in East Africa’s manufacturing sector.

Dangote Group has pledged to invest $22.6 billion in its capital expansion program, with operations spanning multiple countries including Nigeria, Ethiopia, and Kenya. A report by the African Finance Corporation points out that the dysfunction between supply and demand to refined petroleum items in Africa highlights an imbalanced energy mix. to years, the region has exported crude oil at low prices while importing refined items at high costs, thereby constraining regional value creation. Investment in the chemical sector is reshaping the landscape, shifting from crude oil exports to the localized production of fuels, fertilizers, detergent raw materials, and basic chemicals, thereby keeping greater value within Africa.

The two investments are located in different parts of the value chain, however together point in one direction: Africa's chemical sector is transforming from raw material export to regional processing. The speed of this process will depend on the continuous improvement of the regional integration process, infrastructure support and policy ecological stability.