Singapore’s Indorama to boost Nigeria fertiliser manufacturing capacity

Photo credit: Indorama

Singapore-based chemicals producer Indorama is set to increase its fertiliser production capacity in Nigeria and construct a new port terminal for exports. Indorama Eleme Fertilizer and Chemicals, the company's Nigerian unit, has secured US$1.25bn for the expansion project that is anticipated to significantly enhance Nigeria's fertiliser exports to the rest of Africa and beyond.

The financing, drawn from a mix of development finance institutions and commercial banks – including the International Finance Corporation (IFC), Sumitomo Mitsui Banking Corporation (SMBC), African Development Bank (AfDB), British International Investment, Citibank, India Exim Bank, and the Standard Bank Group – will support Indorama in adding a third nitrogenous urea fertiliser production line. This expansion is expected to elevate its annual capacity by 1.4m tonnes of urea, one of the most widely used fertilisers globally. Furthermore, a shipping terminal, currently under development in Port Harcourt, will supplement the new production facility. The project is expected to generate up to 8,000 direct and indirect employment opportunities.

In the fourth quarter of 2023, urea was Nigeria’s third-largest export, behind crude oil and natural gas, with exports totalling NGN 252bn (about US$191m at the current exchange rate). The primary export markets for Nigerian urea were Brazil (55%), Argentina (17%), Belgium (6%), South Africa (5%), and the US (4%).

In 2006, Indorama entered Nigeria by acquiring a former state-owned plastics resins business. Expanding its footprint, the company later established Indorama Eleme Fertilizer and Chemicals. With a capacity to produce approximately 2.8m tonnes of granular urea, the facility primarily caters to domestic fertiliser demand in Nigeria while also engaging in exports. Urea, produced through a chemical reaction involving ammonia and carbon dioxide, has high nitrogen content that promotes plant growth and enhances crop yields.

The Nigerian fertiliser industry has experienced substantial growth since the launch of the Presidential Fertiliser Initiative (PFI) in 2016. This programme aimed to enhance domestic production of NPK fertiliser, an essential multi-nutrient mix comprising nitrogen (N), phosphorus (P), and potassium (K). Prior to the PFI, Nigeria relied heavily on imported fertilisers, which inflated costs for farmers and put pressure on foreign exchange reserves. The PFI facilitates the acquisition of raw materials for NPK fertiliser production at lower prices. These materials – including locally sourced urea and limestone granules, along with phosphate imported from Morocco and potash from Europe – are then provided to private blending firms producing the final product. Thanks to the PFI, the number of operational NPK blending plants has expanded from four at the initiative's start to more than 40.

Since 2017, Indorama has supplied urea to support the PFI and private blenders. Last year, it also acquired a 51% stake in TAK Agro & Chemicals, a NPK fertiliser producer operating six blending plants throughout Nigeria. This acquisition allows Indorama to sell NPK fertilisers directly to Nigerian farmers.

Centre Director Amit Jain at the Dangote Fertiliser Plant in Lekki.

Industrialist Aliko Dangote is another significant player in Nigeria's fertiliser industry. In 2022, he launched a new urea and ammonia factory in Lagos. With an annual production capacity of 3m tonnes, this plant serves both local and international markets.

Fertiliser usage in Nigeria has risen from 11.2kg per hectare in 2010 to 18.6kg in 2021, yet it remains significantly below the global average of 139.8kg. This discrepancy underscores considerable growth opportunities for producers within the country.

 

References

‘Everything you need to know about the Presidential Fertiliser Initiative (PFI)’, Government of Nigeria, 20 March 2017

‘NSIA implements restructuring of the Presidential Fertilizer Initiative (PFI)’, The Nigeria Sovereign Investment Authority, 27 April 2021

‘Nigerian billionaire Dangote launches $2.5 billion fertilizer plant as prices soar’, Reuters, 22 March 2022

‘Africa needs more, not less, fertilizer’, Foreign Policy, 08 October 2022

‘Fertiliser imports decline as private investments exceed $8b’, The Nation Newspaper, 13 February 2023

‘Petchem Investment Holdings Pte. Limited, acquires 51% shares in TAK Agro & Chemicals Limited (“TAK”) Nigeria, one of the largest NPK producers in Nigeria on 1st April 2023’, Indorama Corporation, 01 April 2023

‘IFC and partners back Indorama in Nigeria with $1.25 billion for fertilizer production, food sector’, International Finance Corporation, 22 March 2024

‘British International Investment commits $65 million to Indorama to support global food security’, British International Investment, 22 March 2024

‘Nigeria: African Development Bank signs $75 million loan agreement to boost Indorama’s fertilizer production and export capacity’, African Development Bank Group, 28 March 2024

‘Foreign trade in goods statistics (Q4 2023)’, National Bureau of Statistics, Accessed 03 April 2024

‘Fertilizer consumption (kilograms per hectare of arable land) - Nigeria, World’, The World Bank, Accessed 03 April 2024

‘Dangote fertiliser plant’, Dangote, Accessed 03 April 2024

‘Overview’,  Indorama Eleme Fertilizer and Chemicals, Accessed 03 April 2024

‘Company background’, Indorama Corporation, Accessed 03 April 2024