Pampers, Always to cost more as P&G exits Nigeria

PAMPERS, Ariel, Always, Oral B, Gillette, and other products of Procter & Gamble (P&G) will cost more in Nigeria as the firm plans to exit Nigeria.

The firm, has announced plans to transition its Nigerian operations to an import-only model, citing concerns of Nigeria’s foreign exchange unpredictability.

Consequently, the company has dissolved its on-ground presence in the country, with thousands of jobs at risk.

According to the firm, the decision stems from the challenging business environment in Nigeria, primarily attributed to dollar-denominated operations and unfavourable macroeconomic conditions.

Procter & Gamble’s chief financial officer, Andre Schulten, during his presentation at the Morgan Stanley Global Consumer and Retail Conference in Lagos, noted that operating in certain markets, such as Nigeria and Argentina, had become increasingly difficult due to their macroeconomic realities.

He said the company was implementing a restructuring programme to optimise its operating model and portfolio, focusing on markets with greater potential.

“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,” Schulten said in a statement containing his address at the Lagos conference on Wednesday, December 6.

“So with that in mind, we are announcing a restructuring programme 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 programme 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,” Schulten said.

He noted that the decision would help the company focus on markets that have the highest potential.

Reacting to questions bothering on the effect of the company’s planned restructuring in Nigeria and Argentina on its overall group’s portfolio,  Schulten explained that Nigeria was a $50 million net sales business.

    He said compared to its overall portfolio worth $85 billion, the company does not anticipate any material impact on the group’s balance sheet from a sales or profitability standpoint.

    With over three decades of operations in Nigeria, the firm has invested millions of dollars in the manufacturing sector.

    The firm noted that at the 2014 plant launch, it provided over 5,000 jobs directly and indirectly through its offices, suppliers and distributors and has created over 200 SME jobs.

    The exit is coming months after drug manufacturer GSK announced it was ceasing operations in Nigeria and appointing a third party to take over distributions, which has made price of key medications – Augmentin and Ammoxil to go out of reach of an average Nigerian.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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