The Manufacturers Association of Nigeria has called on the Federal Government to ensure consistent crude supply to refineries and petrochemical plants and invest massively in gas supply infrastructure following the Dangote Petroleum Refinery deal with Honeywell UOP to expand petrochemical production.

In an interview with Sunday PUNCH, the Director-General of MAN, Segun Ajayi-Kadir, said the deal would strengthen Nigeria’s petrochemical industry, establish a stronger local value chain, and position the country as a net exporter of petrochemical products.

Dangote refinery announced on April 20 that it had agreed with Honeywell UOP to deploy Oleflex technology, enabling the production of an additional 750,000 metric tonnes of propylene annually. The refinery also plans to produce 400,000 metric tonnes yearly of Linear Alkyl Benzene used in detergent manufacturing.

Reacting to the development, Ajayi-Kadir said government policies and infrastructure support would be critical to sustaining growth in the petrochemical sector.

“To sustain the growth of the petrochemical sector, government is to ensure consistent supply of crude to refineries and petrochemical plants, invest massively on gas supply infrastructure like pipelines and processing plants, promote tax incentives to attract more investors, provide infrastructural facilities like efficient ports, adequate power supply and logistics to aid production and encourage the patronage of Made in Nigeria products by restricting importation of locally produced inputs,” Ajayi-Kadir said.

He described the Dangote-Honeywell partnership as a major boost for the chemical, packaging, and plastics industries.

“The Dangote/Honeywell deal to expand production and produce higher value petrochemicals is a good initiative to boost the performance of the chemical, packaging, and plastics industries,” Ajayi-Kadir said.

“The major aim of the initiative is to increase the production of propylene, which is a key input for the production of plastics, packaging, and industrial goods, to 750,000 tonnes/year and production of linear alkylbenzene, a critical input for the production of detergents and cleaning products.”

Ajayi-Kadir added that the association had consistently advocated the development of primary industries capable of supplying raw materials to secondary manufacturers.

“The association is impressed with the development because over the years, our requests have been the development of primary industries that will provide input for secondary industries, thereby boosting the performance of the sector,” Ajayi-Kadir said.

“So, the affected subsectors will be able to source the major raw materials locally with only a few inputs and machinery to import. This will reduce the cost of production and prices of finished products in the industry.”

According to MAN’s Manufacturing State of Affairs report, the domestic and industrial plastic and rubber, as well as chemical and pharmaceutical groups, recorded improvements in 2025. Ajayi-Kadir said the impact of the deal on the petrochemical industry and the wider economy would be extensive.

“There are lots of products in the petrochemical industry that can serve as inputs to other subsectors like plastics, packaging, textiles, and fast-moving consumer goods. This deal will establish the value chain, thereby making access to raw materials and intermediate products easy for the industries,” Ajayi-Kadir said.

He noted that the arrangement would reduce dependence on imports and conserve foreign exchange.

“Currently, Nigeria imports large volumes of fuels, plastics/resins, raw materials for detergent production, and industrial chemicals. Having the products locally will reduce the volume of importation, thereby reducing the cost expended on importation and pressure on available forex,” Ajayi-Kadir said. “It will also strengthen the local supply chain and increase direct and indirect employment of labour.”

The MAN DG further stated that the project would stimulate downstream industries such as packaging, construction materials, consumer goods, and automotive components.

“The deal will lead to the development of different products and downstream industries with consequent effect on job creation, exportation, and growth of SMEs. Availability of raw materials locally for production in those industries will reduce the cost of production and prices of finished products,” Ajayi-Kadir said.

He added that increased refining and petrochemical output would create export opportunities for Nigeria. “Increasing the capacity of the refinery and propylene expands the production and supply of petrochemical products in Nigeria. This output will surpass the demand and give room for exportation, making Nigeria the net exporter of petrochemical output and increasing the earnings from exportation,” Ajayi-Kadir said.

Ajayi-Kadir also said the collaboration would improve technological standards and create jobs. “The collaboration between the two companies involves engaging in advanced technology to ensure efficiency, reliability and improved standards, making the refinery one of the best in the world,” he said.

“The complex and other emanating companies and businesses will generate thousands of direct and indirect jobs, reducing the rate of unemployment in Nigeria. The export potential in the industries will also have a positive impact on the economy.”

Earlier, The PUNCH reported that members of the Organised Private Sector also commended the deal and urged the government to provide further support for the petrochemical industry.

The Deputy National President of the National Association of Small-Scale Industrialists, Segun Kuti-George, described the development as long overdue. “It is a welcome development. Normally, what we had was a situation whereby you have a refinery that is doing only petroleum, that is doing only oil, which is abnormal. A refinery is a multi-product setup,” Kuti-George said.

He added that Nigeria’s heavy dependence on imported petrochemical inputs had continued to put pressure on foreign exchange. “As of the last time I checked, Nigeria imports resins worth several billion dollars in one year because resin is a multipurpose product used in paint manufacturing, plastic manufacturing, and several other industries. Nigeria spends a lot of money on the importation of resin annually, which should not be,” Kuti-George said.