Dangote Group Inks $400 Million Construction Equipment Deal with XCMG to Double Refinery Capacity
The Dangote Group has officially signed a substantial $400 million construction equipment agreement with XCMG Construction Machinery Company Limited, a major Chinese manufacturer. This strategic partnership is specifically designed to support the ambitious expansion of the Dangote Petroleum Refinery & Petrochemicals complex located in Lagos, Nigeria. The core objective of this deal is to facilitate the acquisition of advanced construction machinery that will be deployed across ongoing and future projects within the group's diverse portfolio, which includes refining, petrochemicals, agriculture, and large-scale infrastructure development.
Refinery Capacity Set to Soar from 650,000 to 1.4 Million Barrels Per Day
The most significant impact of this agreement will be on the refinery's production capacity. Currently operating at its nameplate capacity of 650,000 barrels per day (bpd), the facility is poised for a massive upgrade. The expansion project, bolstered by this new equipment, aims to increase the refinery's output to an impressive 1.4 million barrels per day. This move is expected to solidify Nigeria's position in the global energy market and further reduce the nation's reliance on imported refined petroleum products. The group has stated that this expansion is projected to be completed within a three-year timeframe.
According to company statements, the new equipment from XCMG will complement the existing assets already dedicated to the refinery expansion. This investment is described as a strategic step towards strengthening Dangote's overall construction capabilities and advancing its long-term goal of building a $100 billion enterprise by the year 2030. "The additional equipment we are acquiring under this partnership will significantly enhance execution across our projects. With this investment, we are positioning ourselves to become the number one construction company in the world," the group noted in its official disclosure.
Major Increases in Petrochemical and Fertilizer Production
Beyond the dramatic increase in crude oil refining capacity, the expansion programme encompasses significant boosts in the production of key petrochemicals and fertilizers. These increases are critical for both domestic industrial supply and export potential.
- Polypropylene Production: Capacity is set to rise from 900,000 metric tonnes per annum to 2.4 million metric tonnes per annum.
- Urea Production: Nigerian urea production capacity is expected to jump from 3 million to 9 million metric tonnes per annum. This is in addition to the group's existing 3 million metric tonnes per annum capacity in Ethiopia, which will reinforce Dangote's position as the largest urea producer globally.
- Linear Alkyl Benzene (LAB): Production capacity for LAB, a key raw material for detergents and cleaning products, will be expanded to 400,000 metric tonnes per annum. This expansion aims to position Dangote as the largest producer of LAB in Africa.
The broader expansion plan also includes provisions for additional base oil production capacity. The Dangote refinery has already made a substantial impact on the domestic market, recently announcing it had reached its current 650,000 bpd capacity and can produce up to 75 million litres of petrol daily. In January, the refinery supplied over 40 million litres of petrol per day, capturing an estimated 62% of the Nigerian market share.
Strategic Market Positioning and Future Goals
This $400 million equipment deal is a cornerstone of Dangote Group's aggressive growth strategy. The group is actively accelerating regional market development as it works towards its long-term targets. The refinery's expansion is not only about scale but also about deepening Nigeria's industrial capabilities and creating a more resilient and self-sufficient energy and petrochemical sector. The recent reduction in the price of Automotive Gas Oil (AGO) to N880 per litre by the Dangote refinery is cited as an example of how increased domestic production can help ease operating costs for factories and small businesses across the country.
