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Dangote Fertilizer has ramped up urea exports to about 77% of current output, with the rest sold domestically in Nigeria, as it prepares for an initial public offering (IPO) scheduled for 2026.
The 77% of output that is exported demonstrates the company’s dual strategy: securing foreign exchange revenue for Nigeria and leveraging global market pricing power for its urea production.
“Nigeria consumes only about 12kg to 15kg of fertilizer per hectare of farmland, compared to the average of 50kg per hectare in other developing countries,” Aliko Dangote, President of the Dangote Group told MoneyCentral at a recent news briefing in Lagos.
Dangote said that by 2028 the Dangote Fertilizer plant will ramp up its Urea output to 12 million tons per annum.
By exporting a large portion of its output, the company benefits from dollar-denominated pricing, insulating its revenues from the volatility of the Nigerian Naira and local market controls.
This is highly attractive to potential investors ahead of its listing.
Expansion
Dangote Fertilizer, a $2.5 billion plant is Africa’s largest granulated-urea fertilizer complex and currently has the capacity to produce 3 million metric tonnes per annum (MTPA), of the crop nutrient.
Dangote Group recently announced a series of strategic technical partnerships to support the next phase of expansion of its fertiliser operations.
Through these strategic partnerships, Dangote Group will increase its urea production capacity in Nigeria from the current three million metric tons to twelve million metric tons annually.
The existing facility operates two trains with a combined capacity of three million metric tons.
The expansion will introduce four additional trains, enabling the Group to meet the rising demand for high quality fertiliser across Africa and global markets.
Thyssenkrupp Uhde Fertilizer Technology (UFT), a subsidiary of thyssenkrupp Uhde, entered into a strategic agreement with Dangote Fertiliser Limited (DFL) to license its advanced UFT Fluid Bed Granulation Technology for four new urea granulation units in Nigeria.
The agreement includes the provision of the technology license, a comprehensive Process Design Package (PDP), and the supply of proprietary equipment such as granulators and scrubbers.
Each of the four new units will have a nameplate capacity of 4,235 metric tons per day, significantly boosting DFL’s annual urea granule production from approximately 2.65 million tons to over 8 million tons.
These units will be constructed in Lekki, adjacent to DFL’s existing fertilizer complexes, which have been operating with UFT technology since 2021 and produce 3,850 metric tons per day each.
Dollar yield-IPO
Dangote has explicitly stated plans to list the fertilizer plant on the Nigerian Exchange (NGX) and possibly a dual listing, with IPO plans set for early 2026.
The focus on dollar-earning potential and ambitious expansion plans (quadrupling output to 12 MTPA) are key factors being highlighted to attract institutional investors.
The Dangote Group projects that fertilizer exports alone could generate up to $20 million daily in revenue within two years, positioning the company as Nigeria’s top private source of foreign exchange.
Dangote assured shareholders that those investing in Dangote Fertiliser Limited would not need to worry about the value of the local currency, as the company operates within a dollarised business framework.
“So, what are we aiming to do to bring about a major revolution in the capital market? The main challenge is that many investors are hesitant, thinking, ‘If I invest my naira now, by the time I receive dividends in ten years, the naira will have lost value.’ However, we are entering the market with a dollarised business model,” he explained.
Dangote further disclosed that the company targets dividend payment to shareholders exceeding $3 billion.
“In the next 40 months, our fertilizer business should generate $20 million in revenue per day. We are pushing hard. We expect to reach over $70 billion in revenue and possibly pay dividends of $3 – 4 billion. Our philosophy is to always think big,” he said.
Dangote Fertilizer pricing power
Exporting to global markets (like the US, Brazil, and India) positions Dangote Fertilizer as a major international player. Unlike domestic sales which can be subject to government price caps or local competition, global markets allow the company to command international prices (urea sales are reported in the mid-$320/t FOB Nigeria), optimizing margins.
“We expect further margin expansion over the next 18 months, driven by operational efficiencies and pricing power in key markets,” GCR Ratings said in a report.
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