A few months after global biopharma company, Glaxo-SmithKline Beecham (GSK) closed its operation in Nigeria, consumer goods giant Procter & Gamble has disclosed that it plans to dissolve on-ground operations in Nigeria and embrace an import market.
The company cited difficulty in doing business in Nigeria as a dollar-denominated organisation and the macroeconomic reality in the country as factors responsible for its latest strategic decision.
The situation means many direct staff and indirect support workers of the company in Nigeria will be thrown into the unemployment market. Reports emerged in 2021 that the firm had paid off about 120 of what they described as the “final set of workers” in its largest Nigerian plant in Agbara, Ogun State indicating an uncertain future in Nigeria.
The Chief Financial Officer of the group Andre Schulten who spoke this during his presentation at the Morgan Stanley Global Consumer & Retail Conference on December 5, 2023, said “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.
“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 stated.
He further explained 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, the CFO explained that Nigeria is a $50 million net sales business.
According to him, 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.
