As multinationals exit, these Nigerian companies are spending billions on expansion projects in 2024 

Nigeria has witnessed a significant exit of companies in the last 18 months from the beginning of 2023.

This follows significant reforms in the energy and foreign exchange market which upended the business climate in the country resulting in economic shocks that negatively affected the profitability of companies.

An analysis by Nairametrics revealed that major Nigerian companies listed on the NGX recorded a cumulative forex loss of N1.7 trillion- although, some of these losses are unrealised. Companies in the consumer goods industry were the major casualty of these macroeconomic shocks.

The Manufacturers Association of Nigeria (MAN) had earlier reported that 767 manufacturing companies shut down in 2023 and up to 365 experienced distress in the year due to economic difficulties resulting from rising inflation, interest rate problems, exchange rate volatilities etc.

The Association further disclosed that capacity utilisation in the manufacturing sector has declined to 56% in 2023 and the value of inventory of unsold goods has risen to N350 billion.

Despite the economic malaise bedevilling the nation, some companies are weathering the storm and carrying out expansion of their production, storage or distribution facilities. Furthermore, new companies are also rising across the country as evidenced by the 67.69% increase in Foreign Direct Investment (FDI) inflow to the sector in 2023.

In this article, we will share a list of companies executing expansion projects or starting out afresh in 2024.

Dangote cement factory in Itori, Ogun state– In February 2023, Dangote Industries Limited (DIL) entered into an agreement with China Sinoma International Engineering to build a 6 million tons per annum cement plant in Itori, Ogun State.

• The plant is projected to feature two production lines, each with a capacity of 6,000 tons per day (TPD) of clinker, resulting in a total installed daily production capacity of 12,000 TPD.
• According to the company, the new plant will expand its production capacity in Nigeria to 42 million tonnes per annum and its total African capacity to 57.6 million tonnes.
• The project will cost Dangote Industries Limited up to $585 million and will be completed by the second quarter of 2025.

Nestle distribution centre, Sagamu- Despite recording losses in 2023, Nestle is currently building a distribution centre for Milo and Golden Morn at its Flower Gate factory in Sagamu, Ogun state.

• The company is also carrying out expansion of its production lines in Sagamu and Agbara in Ogun state and its Abaji production site. The project is being executed by Vita construction
• According to details from the company’s annual report for 2023, it is projected to cough out up to N60 billion for these expansion projects.

The report states, “Further, the company invested 61 billion in the expansion of its lines at the three factories located in Agbara, Sagamu and Abaji. We also invested in the enhancement of our distribution centre (DC) operations at Sagamu, Ogun State.” 

• Beyond that, the company is also building an LNG plant for its Agbara facility which will cost almost N815 million.

Emzor Pharmaceutical, Sagamu – Earlier this year, Emzor Pharmaceuticals announced plans to build a $23 million Active Pharmaceutical Ingredients (API) facility in Shagamu, Ogun State.

• This facility aims to address the widespread challenge of malaria in Nigeria and across Sub-Saharan Africa. The company already has over factory/offices mainly in Lagos, Nigeria and others across West Africa.
• The company in 2023 secured €14 million from the European Investment Bank to establish Nigeria’s and Africa’s first active pharmaceutical ingredient (API) manufacturing plant dedicated to accelerating malaria treatment.
• The partnership is a significant milestone in the fight against malaria, laying the foundation for a groundbreaking API production facility on the continent.

BUA cement factory in Sokoto, Okpella – BUA cement is carrying out expansion of its production facilities to increase its output and share of the Nigerian market and West Africa. In Sokoto, the company

• The company has also made significant investments in its Sokoto production plants and noted that its current increase in the country’s cement production will bring its production capacity to 17 million metric tonnes per day
• In mid-2023, BUA Cement was the recipient of a $500 million loan from the International Finance Corporation (IFC) for its Sokoto production facility.

Eraskon Lubricant Blending Plant – in 2022, Erakson Nigeria announced the construction of the ERASKON lubricant and chemical blending plant in Bayelsa, Nigeria, with a production capacity of 64,000 litres per day.

• The $50 million Eraskon Lubricant Blending Plant, which is currently under construction in Gbarain, Yenagoa, Bayelsa State, had reached over 70% completion as of May 2024.

Transcorp Hotel- according to the company’s 2023 financial statement, it had commitments to the tune of N1.8 billion for building a new event centre in its facility.

• Beyond that, the company stated earlier in the year that it is finalising financing for a new 25-storey Transcorp hotel in Ikoyi Lagos.