BY: Maduabuchi Efegadi
Indorama Eleme Petrochemicals Limited’s (IEPL) planned $3 billion expansion of its multi-billion-dollar petrochemicals plant at Eleme near Port Harcourt, Rivers State, is set to position Nigeria as, perhaps, one of Africa’s largest petrochemicals hubs by 2026, Manish Mundra, Indorama’s managing director, said at the plant’s site.
Mundra, while explaining to Ibrahim Gambari, chief of staff to President Muhammadu Buhari, and Zainab Ahmed, minister of finance, budget and national planning, said last year, with its total investment at about $4 billion, Indorama would increase its investment portfolio in the country to $6.4 billion by 2025.
He informed that the company’s future expansion plan of $3 billion investment will make Nigeria the largest petrochemicals hub in Africa by 2026.
IEPL has so far made investment in petrochemicals, fertiliser, gas pipeline, port development and allied utilities put at more than $3.5 billion. The planned $3 billion petrochemicals expansion would take the company’s Nigerian investment accretion to $6.5 billion by 2025.
As at 2013, IEPL had an annual installed capacity of 300,000 metric tonnes of olefins, 250,000 metric tonnes of polyethylene and 80,000 metric tonnes of polypropylene. But these require absolute upgrades considering astronomic rise in domestic demand for petrochemical-based products.
The expansion will certainly increase the production capacity of the company’s present 3.06 million metric tonnes per annum (mtpa) petrochemicals plant, which sits side-by-side with a 3.0 million metric tonnes per annum urea fertiliser plant. The two high precision engineering industrial complexes would have seen total investment by Indorama in Nigeria of $6.5 in the next three years.
However, the incoming petrochemicals expansion is only about 10 percent of Nigeria’s petrochemicals potential, which has been estimated at more than $20 billion.
Globally, Nigeria’s peers in the midstream petroleum industry, Iran, Iraq, United Arab Emirates (UAE), Qatar, among others, have attracted in excess of $90 billion in investments in the last 10 years.
A top expert in the petrochemicals industry told Business A.M. recently, that Nigeria should be talking of its fourth petrochemicals plant. So far, apart from Indorama’s singular effort, the country’s other capacities are still under construction, such as the ones by Dangote and BUA Group.
Egypt, a North African economic giant, in July last year began the construction of its Red Sea petrochemicals complex with a total investment of $7.5 billion. The effort will place it on top of countries in the world producing high-quality petrochemicals. The country, Africa’s third largest economy, signed a contract for engineering works with French energy solutions giant, Axens Ink, relating to manufacturing licences of the Red Sea petrochemicals complex.
Meanwhile, Gambari, the chief of staff to President Buhari, and Ahmed, the minister of finance, budget and national planning, commended Indorama Nigeria for its immense contributions to the presidential fertiliser initiative (PFI) in the last five years.
He also said that Indorama Fertilisers & Chemicals Limited has been a major supporter of President Buhari’s agricultural revolution with its production of three million metric tonnes of urea per annum through its two world-class fertiliser plants in Port Harcourt, Rivers State.
Gambari’s visit to Indorama was with Uche Orji, the managing director and chief executive of Nigeria Sovereign Investment Authority (NSIA).
The chief of staff noted that Indorama’s vision was in line with President Buhari’s economic diversification agenda, adding that they were impressed with Indorama’s vision to build Africa’s largest petrochemicals and fertiliser hub in Nigeria.
“The government will support all genuine initiatives at industrialising the country and supplying fertilisers to millions of farmers across the country,” he said.
He said the federal government was happy that Indorama Nigeria has in the past few years become a major exporter of fertilisers to earn foreign exchange.
The Indorama MD and other top management team took the chief of staff and their entourage on a facility tour of the massive Indorama industrial complex at Eleme.
Mundra noted that despite the spiralling price of fertiliser in the international market, Indorama was ensuring that Nigerian farmers get the commodity at the cheapest prices in the world.
“Indorama has been at the forefront of supporting the Presidential Fertiliser Initiative by supplying urea on a timely basis,” he said.