The Nigerian polymers market will be largely fulfilled by imports, with domestic capacities remaining small and operating well below capacity. Growth will be strong but from a low base as far as per capita consumption is concerned.
In 2016, Nigeria had olefins production capacities of 550,000 tonnes per annum (tpa) ethylene and 125,000tpa propylene, with thermoplastic resins capacities of 240,000tpa linear low density polyethylene (LLDPE) and 95,000tpa polypropylene (PP). Additional capacity came onstream in 2016 with Indorama Eleme Petrochemical (IEPL) commissioning a mega-sized fertiliser project comprising 1.4mn tpa of urea, a gas pipeline and jetty projects. The fertiliser plant's main project components involve 2,300 tonnes per day (tpd) ammonia, 4,000tpa urea and 4,000tpd urea granulation plant.
The long-term outlook is clouded by the difficulties of transition to a growth model that is not driven by oil, be they fiscal or political. The naira has depreciated, which could restrain import growth somewhat, while a hike in interest rates could curtail consumption. Part of our long-term optimism on Nigeria's headline growth depends on more efficient and wider-reaching electricity supply. Our baseline assumption is that improving power delivery will unlock productivity gains for the non-oil sector. Development of the manufacturing sector in particular will help Nigeria's petrochemicals consumption with construction, the automotive sector, packaging and agriculture taking the lead in the local market growth story.
There is a steady rise in the non-oil component of growth as well as greater political certainty under the Buhari administration, both of which should support the performance of the Nigerian petrochemicals market. Moreover, growth activity is likely to strengthen over our five-year forecast to 2021.
A crucial development for Nigeria's downstream sector is Dangote's 650,000b/d refinery, which will be online by 2019. This could enable the country to become a net refined fuels exporter by the second half of our forecast period, eradicating the need for refined fuels imports. Dangote is also planning a fertiliser plant that would produce 2.8mn tpa of urea and ammonia and a PP plant with capacity of 650,000tpa.
Nigeria comes in at 10th place in BMI's Risk/Reward Index (RRI) for the Middle East and Africa this year with 38.0 points - up from 11th place in 2016, despite losing 0.3 points. The decline in the score is related to a 5.9-point decline in country risk, which is partly offset by a 10.0-point increase in market risk. Nigeria's score could rise if all projects come onstream as expected, but bearing in mind past disappointment, BMI remains circumspect about Nigeria's ability to deliver capacity growth in a highly challenging investment environment.
The Nigeria Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Nigeria Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Nigerian petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Nigerian petrochemicals market.
- Target business opportunities and risks in the Nigerian petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Nigeria.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.