By Adedapo Adesanya
Consumer goods company, Procter & Gamble (P&G), has revealed plans to dissolve its on-ground operations in Nigeria and substitute it with an import market, erasing several value chains in the business.
This was disclosed by the Chief Financial Officer of the group, Mr Andre Schulten, during his presentation at the Morgan Stanley Global Consumer & Retail Conference, where he explained that the double whammy of US Dollar needs and macroeconomics challenges was hampering its business operations in Nigeria.
He said the restructuring move in the country is similar to what it is doing in Argentina, which is undergoing a series of economic challenges, noting that this has informed its strategic decision.
Mr Schulten stated, “The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create US dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.”
“So, with that in mind, we are announcing a restructuring program with the intent to adjust the operating model and adjust the portfolio to ensure that we maintain the portfolio discipline that has brought us to this point.
“The restructuring program will largely focus on Nigeria and Argentina. We’ve announced that we will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground in Nigeria and reverting to an import-only model”
He further explained that the decision would help the company focus on markets that have the highest potential.
In 2018, P&G shut down its then-newly commissioned production plant in Agbara Industrial Estate, Ogun State, Nigeria.
The factory, which gulped about $300 million to complete and was commissioned in June 2017 by former Vice President Yemi Osinbajo, operating at a loss since it started operations, and due to the frustrations, the management sold off the plant and sacked 120 workers.
P&G produces popular products like Always sanitary pad, Pampers, Ariel detergent, Oral B toothpaste, and Gillette shaving stick, among other products in the Nigerian market.
Dipo Olowookere