Nik Ogbulie, who witnessed the inauguration of the Dangote Refinery and Petrochemical Plants in Lagos narrates the benefits and opportunities inherent that can create manufacturing growth for a continent that has suffered the scourge of basic industrial raw materials over the years. Gradually, Africa is geting to terms with the task of processing their huge resources for use by the many small and medium industries across the 54 countries within the continent in realization of the ongoing economic integration efforts. It is a huge industry whose value chain would herald the much awaited economic transition in Africa.
One industrial venture in Africa has eventually become an economic gain too many for the continent. The much talked about manufacturing chain has come home to roost through a chemical plant that would become everything to the African economy. The location of Dangote Petrochemical Plants mid-way into all the African sub-regions has afforded the establishment the opportunity to serve all the countries, using the expedited delivery involving land, air and sea. To the discerning publics, the greatest benefit of the plant to Africans are the chemical raw materials which are the catalysts needed for the deficient industrial progress in Africa, not petroleum and gas. With African financial institutions making frantic efforts to grow the MSME/SME rating of investments in Africa, there is the strong indication that many SMEs will be springing up and they would need the desired chemical raw materials that will not stretch their access to financing, especially with the arrival of the African settlement system which takes away the rigours of sourcing foreign exchange. This will grow such industrial investments in terms of expansion, employment, export and an increase in the aggregate revenue of the continent.
The pre-eminence of industrial chemicals in the Dangote industrial complex is really premeditated because the experiences of the ownership in the various industrial productions over the years have provided the alibi for a massive provision of a sustainable industrial supply chain to ease manufacturing in Africa. This is why the company insisted that innumerable number of industrial raw materials must be the forte of the new plant just like we have in the developed economies where a simple industrial plant or agricultural investment becomes a precursor for other needs. For instance, the highly prized farm animals found in Australia and Argentina are mainly farmed for their meat, but their major attraction has been the very useful soft mohair wool which is in high demand across the world for various uses, especially for nice winter and kiddies wears. So highly prized also is its soft skin.
The major value and attraction are the wool and the soft skin which rule the clothing markets across winter-prone environments. South America, Canada and Indian industries do not have their investment values fully rewarded anymore by their deals on hard and soft woods but the by-products such as pulp, wine corks and tooth picks. These products have become of daily value to people and major sources of operating income to most of the investors. As the wine market share enlarges, so also the demand for cork across the major wine industries in Spain, France, South Africa. The same can also be said of the Scandinavians whose major reason for having Dairy farms has changed from producing milk from cows to one of the beef, tusks , hides and skin markets in the world. These are the very small examples of how value chain and value transition have changed the face of industries and value addition.
Apart from providing the much needed income, industrial ventures that have the potency for discovering the imbedded values they can create, like Dangote Petrochemicals, have become so many things to so many economies. That has been a very new dimension in industrial development. Economies that are quite eager to key into faster pace of development are often very eager to find the next variant their industries can serve other than their major offerings. Modern science and development have attached much importance to derivatives because they are the unseen values from a major investment. These product and service chains have become the powers for which industrial investments transit to enormous values for both owners and users.
For Africans, the major story around the Dangote Petrochemicals marvel seems to be the fuel that would soon flow out of the 650,000 barrels/day capacity refinery. It is a great invention which offers a huge relief considering the difficulties they have experienced from its scarcity syndrome, but that is not the major story of the over $20 billion investment which makes it the biggest manufacturing super-structure in Africa.
The story of Dangote Petrochemicals is not about petroleum which usage does not empower mobility for huge industrial machinery except small engine vehicles and generators, but the series of products which make petrochemical plants the only single industrial outfit that has the capacity of delivering over 100 chemical raw materials from its value chain which also have proven to be adequate for use by over 50 different product brands in the chemical and material engineering family. As a matter of fact, experts believe that the availability of investments as huge as Dangote Petrochemicals connotes the existence of over 50 different big industries for the production of each of the products that would be coming from this single project.
What this development on the African soil means is that there will be high availability and lower costs for resins considered as the most vicious hydrocarbon for the manufacturing of quality pains in large quantity for local use and export, especially within the African region. For a continent that is suffering from a very high housing deficit there is the tendency that the high cost of paints and the poor access of it could be part of the reason for the widening gap across all the regions of Africa. With an estimated population growth of about two billion in 2030, demand for materials useful for housing , construction and other structural engineering finishing will be very high and a corresponding import of such materials from outside the African region will continue to widen the gap.
With African countries importing as much as 30 million tons of urea and some 100,000 tons of polypropylene annually, the tendency for expedited economic growth will be far postponed even as costs will continue to rise in line with global trends.
Much as these products are basic agricultural and industrial needs by the local industries in Africa, its availability within the region will be able to reduce the cost by a very significant degree. Already, the fertilizer plant has been on and running and that is an opportunity for African countries to increase agricultural production capacity in a struggle to return a very large part of the African regions to food efficiency.
This will also offer the various Small and Medium Scale industries the capacity to source their polypropylene raw materials for the various products ranging from assorted household plastics, polystyrene, polyplastics most of which can be used in heavy industries like car assembly plants, pharmaceutical packaging, furniture, textiles, electronic, various packaging demands, roofs, bags, shoes and other foot wears, vehicle tyres and other materials fit for machineries and instruments. According to Aliko Dangote, President/ Chief Executive of the company, the availability of these derivatives necessary for use by African industries would immediately encourage African industrialists and venture enthusiasts to look inwards so as to stop importing poverty into Africa by spending a lot of their foreign exchange in the venture, thereby exporting jobs by not being able to use the money to create new jobs.
In the just concluded 30th Anniversary ceremony of African Import Export Bank (Afreximbank)in Ghana, the development finance institution indicated that the very major approach to industrialization in African must begin with the existence of investments that would create a multiplier support to medium scale industrialization which can discourage the indigent investors from spending much money from importing materials such as propylene and other allied petrochemical products which could be transported, using the opportunities being created by the various guidelines being provided by the African economic integration policy now in place. Behind the bouquet of a good number of major products such as gasoline, diesel, kerosene, aviation fuel which will be produced in several million liters, the other components which are mainly coming out as industrial raw materials are where the real multiplier benefit of the huge industry lies, because of the ability to extend availability to anywhere in Africa in huge supply.
As a matter of fact Dangote Petrochemical Plant can target African industrial growth, looking at the availability of attractive manufacturing sub-chemicals such as thermoplastic polymers, ethylene, propylene, polypropylene, polyethylene, KB Resins, Polyethylene Sulphide, alpha olefins, polyalphaolefins, aromatic compounds and a wide range of other industrial speciality compounds that can become a range of chemicals and allied products such as cassettes, fluids, synthetic rubbers, catalysts, lubricants and fibres. These would be in demand by a wide range of industries, especially within the tropics where good heat-resistant products are in demand for industrial and household products. With this, it is obvious that Dangote Petrochemical Plant is not just a company but a development institution where every aspect of chemical product for any industry could be seen. There are strong indications that Dangote Petrochemical Plant can create multiple chemical products which could force down the ravaging import demands while assorted manufacturing feeds become readily available in the hands of manufacturing homes. With a heavy industrial plant like a Petrochemical plant, the African economy could save enough foreign exchange for industrial expansion with the view of providing new jobs every year.
Because of the non-availability of Petrochemical plant that takes care of the huge raw material consumption needs of the African economy. Africans have continued to focus on fuel as the only prominent and beneficial product from petroleum exploration. This is why the real dividends of a rich petroleum endowment have not really trickled down to the African economy with about four major oil producer in the World. To many Africans, the only thing its oil-rich soil harbours is gasoline which it has no capacity to refine except it is exported in its crude state.
Now that a refinery is available, let the millions and one of the derivatives that make industrial growth begin to manifest. This will happen if Africans are ready with the structures that are needed to absorb the by-products which are the essential industrial raw materials. As a matter of fact, with the availability of a full bouquet of chemical raw materials huge enough to supply multiple demands, the stage for real industrial revolution may have begun in Africa.
