News & Events
Procter & Gamble Halts Nigerian Manufacturing, Shifts to Import Model Amid Economic Challenges
- December 8, 2023
- Posted by: Admin
- Category: News update
Procter & Gamble (P&G), a prominent American consumer goods company, declared its cessation of manufacturing operations in Nigeria, opting for an import-centric strategy, revealed in an announcement on Tuesday.
The multinational anticipates incurring significant expenses of around $2.5 billion within the next two years as part of a comprehensive overhaul of its operations, encompassing reorganisation efforts in select markets and revaluation of its Gillette business.
P&G disclosed potential charges between $1 billion and $1.5 billion after tax for restructuring operations in Nigeria and Argentina, both challenging markets for the company. The company’s CFO, Andre Schulten, highlighted the complexities of sustaining value in markets like Nigeria due to its U.S. dollar-denominated operations and the formidable macroeconomic conditions.
This decision echoes a trend of international corporations facing setbacks in Nigeria, attributed to the prevailing foreign exchange constraints and the devaluation of the naira, leading to reduced dollar-based earnings for foreign entities.
The move follows similar actions by other multinational firms in Nigeria, with Unilever discontinuing the production of specific product categories and GlaxoSmithKline opting to terminate its manufacturing operations in favor of a third-party distribution model.
Despite operating in Africa’s largest economy for three decades and previously running manufacturing plants in Ibadan and Agbara, P&G has gradually scaled down operations, now primarily operating its Ibadan plant, producing Ariel detergent while importing or licensing other products in Nigeria.
P&G’s CFO emphasised that the strategic shift in these challenging markets is driven by the company’s belief that altering their approach will yield more favourable outcomes, highlighting a transition intended to enhance their market approach and overall performance in these geographies.
For inquiries, story sharing, advertising, or publicity needs on National Health Magazine, contact via email: globalmastersinstitute@gmail.com or WhatsApp only on +234-902 681 2248.