Dangote Refinery holds promise for Nigeria’s cosmetics, detergent brands
By addressing the issue of limited access to vital raw materials, the Dangote refinery launch offers detergent and cosmetic brands a chance to thrive. Writes Joseph Ekeng.
In a major development for Nigeria, the highly anticipated Dangote oil refinery, a monumental $18 billion project, was officially launched just days ago. This ambitious endeavour aims to reduce the country’s reliance on oil imports by up to 36 percent, transforming Nigeria into an oil refining nation rather than merely an oil exporter. Beyond the oil sector, the refinery’s impact is expected to extend to other industries, potentially breathing new life into the cosmetics and detergent sector.
During the launch, Aliko Dangote, the founder of Dangote Group, hinted at how the refinery may affect the cosmetic and detergent segment. He stated, “The refinery’s completion will not only create direct and indirect jobs but also lead to skills transfer and technology acquisition opportunities that will benefit the downstream sector. Moreover, the refinery’s production of critical products like naphtha and polypropylene will stimulate the development of other industries, such as cosmetics, plastics, and textiles.”
The potential implications for local cosmetic and detergent brands are significant. Currently, Nigeria imports most of its detergent powder from India, Indonesia, and Turkey. Petrochemicals, derived from the oil and gas industry, play a crucial role in the production of beauty and personal care products. Substances like mineral oil, petrolatum, and sodium lauryl sulfate (SLS) are utilized as emollients, surfactants, emulsifiers, and thickeners. These ingredients contribute to the effectiveness of skincare products, offering properties such as skin smoothing, foaming, and thickening. For Nigerian companies in the beauty and home care industry, limited access to these vital raw materials has been a persistent challenge.
Many manufacturers, both domestic and international, have suspended the production of detergents and cosmetics due to difficulties in sourcing these materials. Unilever, one of Nigeria’s oldest manufacturing companies, recently halted operations of its home and skincare brands in the country. The company faced challenges in scaling its operations due to heavy reliance on imports for essential raw materials. The establishment of an operational refinery within the country offers a potential solution by enabling local sourcing of these materials, reducing costly imports, and facilitating manufacturing processes.
While the Dangote refinery offers hope, relying solely on it may not be without complications. The refinery is already burdened with high expectations due to its potential impact on Nigeria’s economy. Moreover, the use of fossil fuels as raw ingredients in beauty and home care products is facing increasing scrutiny. Many brands are transitioning away from fossil fuels and adopting bio-based ingredients to promote sustainability. Nigeria has also taken steps to reduce its carbon footprint, implementing a Carbon Tax policy and aiming to decrease greenhouse gas emissions. However, alternatives to fossil fuel ingredients are still in development, often at higher costs and with inferior performance. Petrochemicals remain the preferred choice due to their reliability and ubiquity in the industry.
Regardless of the refinery’s specific impact on the cosmetics and detergent industry, it is clear that Nigeria’s beauty industry is in need of a boost. Market projections indicate a growth rate of 16.48% for beauty and personal care products from 2023 to 2027, with a market volume expected to reach US$14.49 billion. This growth is driven by the increasing disposable incomes of the continent’s expanding middle class. Although challenges exist, harnessing available resources can foster growth and sustainability in the industry, ultimately contributing to Nigeria’s economic development.
As Nigeria takes a significant stride towards becoming an oil refining nation, the potential benefits for the cosmetics and detergent sectors are undeniable. By addressing the issue of limited access to vital raw materials, the Dangote refinery launch offers local brands a chance to thrive, enhance their manufacturing processes, and contribute to sustained growth.
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