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How rejection in 2007 inspired me to build $18.5bn petrochemical refinery, Dangote

How rejection in 2007 inspired me to build $18.5bn petrochemical refinery, Dangote

Africa’s richest man and the Chairman of the Dangote Group, Aliko Dangote, said that 650,00,00 barrels per day refinery will begin the export of crude oil products by the end of August 2023.

The billionaire however recounted how the revocation of the Port Harcourt and Kaduna refinery license won under Olusegun Obasanjo by the Umar Musa Yar’Adua’s government back in 2007 motivated him to spend over $18.5bn to build the world’s largest single-train refinery.

The Forbes billionaire narrated this at the commissioning of his 650,000 barrels per day refinery in Lagos.

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Bluestar, a consortium led by Dangote had bought controlling stakes in the Port Harcourt and Kaduna refineries in the last days of the administration of President Olusegun Obasanjo.

The consortium paid a total of $721 million for the refinery 210,000 barrels per day (bpd) Port Harcourt refinery and the 110,000 bpd Kaduna refinery.

But Yar’Adua refunded Dangote after revoking the license.

Dangote said, “Initially we thought to enter into the industry by acquiring the brownfield refineries under the Federal Government privatisation programmes in 2007. Regrettably, the outcome of the exercise was reversed and our payment was returned. This motivated us to rethink our market entry strategy and business model.

“We subsequently committed to entering the market boldly with a vision to invest in a greenfield refinery that will transform the industry in Nigerian and Africa as a whole and that was why we went for the biggest refinery ever built in the world.

“We have built the refinery with the capacity of 650,000 barrels per day of crude oil plus 900,000 metric tonnes of polypropylene in a single train which is the largest built ever.

“We have selected the best plant and equipment and the latest technology from across the world. our cluster location and offshore loading and offloading facility with the capacity to receive all our crude oil supplies and evacuate up to 75 per cent of our liquid product- giving us direct access to the rest of Africa and the global market for export. In addition, 80 per cent of our production can also be discharged through trucks to go around Nigeria.

“Our huge investment of over $18.5bn in this industry has been prompted by our desire to support and contribute our quota to the Federal Government’s sustained efforts to transform our economy and properly position our country as a leading nation in Africa. “

The Kano-born businessman also said that he would replicate his successes in cement and fertilizer manufacturing.

He said, “It is our firm commitment that we will replicate in this sector, what we have actually achieved in the cement and fertilizer market where Nigeria will transit from being the largest importer of crude products to a net exporter by the end of August this year.

“We intend to ensure that our plants run at the highest capacity utilisation and the highest efficiency to enable us to export competitively to other markets, especially in the ECOWAS and the wider region in which 53 countries out of 55 are dependent on imports to meet their petroleum products demand.

“This is a clear opportunity for Nigeria given the African Union’s commitment to the creation of the African common market through the recently established AfCFTA regime.

“Beyond the availability of high-quality fuel for our transportation sector, the refinery will also make available for our industries the vital materials for a wide range of manufacturers in the plastics, pharmaceuticals, food, beverages, construction and many other industries.

“Second, both the refinery’s operations and ancillary businesses will generate massive job opportunities. The downstream value chain will equally provide far more absorptive capacity for labour in hundreds of thousands.

“Third, once our plants are fully commissioned and it is onstream, we expect that at least 40 per cent of the capacity will be available for export and this will result in significant foreign exchange earnings into the country.”

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