Dangote contracts Saipem to build biggest Fertilizer Plant in Africa
Category: Investors NewsBeat
Friday, July 08, 2011
The President of Dangote Group, Aliko Dangote and the Saipem Group’s Nigeria Country Manager, who is also the Managing Director of Saipem Contracting Nigeria Limited, Mr. Giuseppe Surace, have signed an agreement relating to engineering works for infrastructure that will launch the construction of the biggest fertilizer project in Africa.
The plant, located in Edo State will be an excellent example of how to utilize a substantial amount of the country’s significant gas resources, as a raw material in the Ammonia-Urea fertilizer process. Ultimately, the project, when completed will make the country self-sufficient in fertilizer production, thereby saving it the huge foreign reserves presently spent on importation of fertilizer.
With the agreement, Saipem is to build for the Dangote Group a fertilizer plant for the production of 7.700 MTPD of granulated Urea, (two trains with a production capacity of 3,850 metric tons each per day), and it is expected to start production in 2014.
The Plant will be the largest in Africa as its closest competitor has installed capacity of only 1,000 metric tons per day of Ammonia and 1,500 metric tons per day of Urea compared with the Dangote plants of 2,200 metric tons per day for Ammonia and 3,850 metric tons per train per day of Urea.
The project, which will create thousands of direct and indirect jobs in construction and related fields, will provide a major boost to the agricultural sector by significantly reducing the importation of fertilizer in Nigeria and ultimately removing the need for imports when plant is in full production.
After the official signing ceremony, Dangote said he strongly shared the view of President Goodluck Jonathan that the country should not be importing those things we have the raw materials and natural advantage for producing locally and fertilizer is one of such products.
Dangote said: “There is no reason why Nigeria should be importing fertilizer, I am happy that with this agreement, by the time our plant is completed and commissioned, the country will become self sufficient in fertilizer production and even have the capacity to export the products to other African countries. Right now, farmers are forced to utilize whatever fertilizer that is available as they have no choice, but we need to know that the fertilizer that will work in Jigawa State may not be suitable in Adamawa State, as they may not have the same soil type and composition. The same fertilizer you use for sorghum may not be the fertilizer you will use for sugar cane.”
In addition, he said that: “There is no way we can on an annual basis be able to import over one million tons of fertilizer through the ports. There are issues of the capabilities of the Ports and transportation and the capability of the ports. But where are the ports? Even where you have the ports where are the modern equipment for their operations? We don’t have a good network of roads for evacuation anytime you have two or three ships of fertilizer docking, transporters will capitalize on the situation and continually increase the freight charge. Most time, the fertilizer ship arrives late and out of season. By the time we have the Dangote fertilizer plant on the ground, all these distortions will be removed and our economy will boom, because, since the agriculture that is already contributing 46-47 per cent to the GDP, will drastically increase its output and contribution to GDP.”
With an assurance that importation of fertilizer will be a thing of the past in Nigeria after the commissioning of the plant, Mr. Surace of SAIPEM said: “With the agreement signed, we will start the project immediately and by the beginning of 2012, we should start seeing physical construction of structures at the site. I can confidently assure you that the plant will be ready for commissioning in July 2014.”
The Government of Edo State also lauded the project, describing it as a great initiative that will further enhance the developmental efforts of the government in the area of growth and massive employment generation.
Speaking on behalf of Edo State Government, Senior Special Assistant to the Governor, Amanokha Mika, said the people of the state will be the greatest beneficiary of the project, in terms of employment generation, with an assurance that the government will continue to provide the enabling environment needed for industries to grow and prosper in the state.
According to him: “The government of Edo State is highly delighted with this project. We are happy because the infrastructural development we are putting on the ground in Edo State is what attracted the Dangote Group in to citing the Plant in Edo State. Our people will be the major beneficiary of the initiative because we have seen from the blueprint that thousands of both direct and indirect jobs will be created in Edo State and our Comrade Governor, Adams Oshiomole, being a Labour man to the core, will always support projects geared towards job creation in his state.
Dangote Group is one of the most diversified business conglomerates in Africa with a hard - earned reputation for excellent business practices and products’ quality.
Saipem, after more than 44 years in Nigeria, has emerged as the leader in the provision of engineering, procurement, project management and construction services with distinctive capabilities in the design and the execution of large-scale projects, in the petrochemical sector.