Procter and Gamble to shut down operation in Nigeria
By Kingsley Odii
Consumer goods giant Procter & Gamble has recently disclosed plans to dissolve its on-ground operations in Nigeria and transition to an import-only business model.
The decision was announced by Andre Schulten the Chief Financial Officer of P&G, during his keynote address at the Morgan Stanley Global Consumer & Retail Conference.
Schulten explained that the rationalre behind the move is the perennial challenges faced by a dollar-denominated organization in the Nigerian market.
“The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create U.S dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment, he said.
Speaking about the dynamics of the restructuring program, Schulten emphasized that the focus would primarily be on Nigeria and Argentina.
He said, “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.”
P&G revealed that the strategic decision would enable the company to concentrate on markets with the highest potential.
In response to inquiries about the impact of the restructuring on the overall group’s portfolio, Schulten made it crystal clear that Nigeria contributes $50 million in net sales to the company, representing a fraction of its $85 billion overall portfolio.
Hence, P&G expects no significant material implication on the group’s balance sheet in terms of sales or profitability.
The macroeconomic conditions in Nigeria have had adverse effects for foreign USD-denominated companies, with P&G joining the likes of drug maker GSK in revising its operational strategy in the country.
GSK had earlier announced the cessation of operations in Nigeria, appointing
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