Procter & Gamble (P&G), a US consumer goods powerhouse is withdrawing from manufacturing its products in Nigeria. To this disclosure, the company announced that it would focus on import-only activity.
The multinational corporation expects $2.5 billion in charges over the next two years from reorganising operations in some of its markets and noting down the value of its Gillette business.
The corporation is well-known for manufacturing iconic brands such as: Pampers, Gillette, Ariel, Always and Oral-B.
Its exit could sustain charges anywhere between $1 billion to $1.5 billion after-tax from restructuring its operations in Nigeria and Argentina, –the two markets where the business has been difficult for the corporation.
Andre Schulten, the chief financial officer, had said at Morgan Stanley Global Consumer & Retail Conference in New York that it was problematic for the company to operate due to the macroeconomic environment in both countries.
The move is coming at a time when notable foreign companies, particularly manufacturers and energy firms have been exiting the country in folds.
A lot of them had cited the current foreign exchange crises and devaluation of the Naira, which equals to lower earnings for foreign companies in dollar terms.
Back in March, Unilever announced their withdrawal from producing its home-care and skin-cleansing products in the country. This was due to a “margin dilutive” and the need to make its Nigerian operation profitable.
Again in August, British pharmaceutical heavyweight, GlaxoSmithKline– GSK announced it was ending its manufacturing operations in Nigeria and opting for a third-party distribution model.
P&G has been operating in Nigeria for 30 years and had run two manufacturing plants in Ibadan, Oyo State and Agbara, Ogun State. Before this announcement, the company had been scaling back operations through job cuts and fragmentally running of its factories in recent years.
A company source in 2021 had disclosed that it was only the P&G plant in Ibadan that was presently being run by the company. This plant only manufactures Ariel detergent. All other P&G goods were either being shipped in or produced by another company and licensed by P&G.
The company’s CFO had previously revealed that Nigeria contributed $50 million in net sales to P&G’s global business.
