Nigeria’s Dangote refinery to expand downstream petchem portfolio with major LAB facility

Nigeria’s Dangote Petroleum Refinery is advancing plans to build a Linear Alkylbenzene (LAB) production facility with a capacity of 400,000 tonnes per year, marking a major expansion of its downstream petrochemicals portfolio.

The refinery, owned by billionaire Aliko Dangote, is targeting commissioning within 30 months, positioning the project as one of the largest LAB developments globally and a significant addition to Africa’s limited production base.

Africa currently hosts only two LAB plants — operated by Sonatrach in Algeria and Egyptian Petrochemicals Company in Egypt — each with a capacity of around 100,000 tonnes per year. Dangote’s planned facility alone would therefore double the continent’s existing LAB output, potentially reshaping regional supply dynamics for detergent feedstocks.

The project builds on the broader integration strategy of the 650,000 barrels per day (bpd) oil refinery, which aims to reduce import dependence while expanding into higher-value petrochemical derivatives.

Dangote and Petrochemicals FZE have partnered with Honeywell International  Inc (NASDAQ:HON) to support the development. The US-based firm will provide process technologies and catalysts for both the LAB unit and a separate 750,000 tonnes per year propylene production facility. The Nigerian refinery previously announced it would use Honeywell’s technology to more than double its refining capacity to 1.4mn bpd.

Africa currently consumes an estimated 600,000–800,000 tonnes of LAB annually, a structural supply deficit largely met through imports from Europe, the Middle East and Asia. The addition of Dangote’s 400,000 tonnes per year facility would therefore position Nigeria to supply around 50–67% of current African LAB demand, assuming full utilisation, significantly reducing the continent’s reliance on imports.

The addition of LAB and propylene capacity would also strengthen Nigeria’s position in the regional chemicals market, where demand for detergents and plastics inputs is rising in line with population growth and urbanisation.

“The market opportunity underpinning this investment is substantial. Africa’s detergent chemicals market is projected to expand to $85.6bn by 2031 from $58.9bn in 2025, representing a compound annual growth rate (CAGR) of 6.4%,” CSL Stockbrokers Limited, Lagos (CSLS) commented in a note to clients on April 22.

“This growth is being driven by rapid urbanisation, rising hygiene awareness, and a structural shift towards branded and higher-quality consumer products. At the country level, demand dynamics are equally compelling,”  the brokerage said.

“Nigeria, Africa’s largest consumer market, is experiencing sustained growth in detergent consumption, supported by population expansion, rising incomes, and increased penetration of household cleaning products. Despite this demand, the continent remains structurally dependent on imports for key inputs such as LAB and other surfactant intermediates.”

According to CSLS, Africa’s soap and detergent market was valued at around $40.5bn in 2024, with “significant volumes” of finished products and upstream chemical inputs sourced from international markets, with the import reliance exposing African economies to supply chain disruptions, currency volatility, and external pricing shocks.

“The Dangote Petroleum Refinery benefits from a high degree of vertical integration, combining refining, petrochemicals, fertiliser production, and distribution within a single industrial platform. This integrated model can deliver meaningful cost efficiencies and supply chain control that few regional competitors are currently positioned to match,” CSLS said.

“If delivered on schedule, the LAB facility would not only strengthen the refinery’s revenue diversification and margin resilience but also position Nigeria as a leading regional supplier of a critical detergent feedstock, one that African markets have historically relied on imports to secure.”

Aliko Dangote, Africa’s richest person, is also investing in fertiliser and plans to build a port in Lagos, as disruptions in the Strait of Hormuz owing to the US-Israel war against Iran threaten global supplies.

Earlier in April, he unveiled a $40bn expansion plan to drive growth of his conglomerate over the coming five years, which includes would quadruple fertiliser output, building potash and phosphate plants in the Democratic Republic of Congo (DRC).

Beyond refining, its Dangote Cement Plc subsidiary has also signed a $1bn agreement with Sinoma International Engineering to build new plants and expand existing facilities across seven African countries.