In a strategic move, consumer goods giant Procter & Gamble (P&G) has revealed its intention to dissolve on-ground operations in Nigeria and transition the country into an import market. The announcement was made by the Chief Financial Officer of the group, Andre Schulten, during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
Mr. Schulten highlighted the challenges of operating as a dollar-denominated organization in Nigeria, citing the macroeconomic realities of the country as a key factor influencing P&G’s decision. He stated, “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 portfolio, ensuring that we maintain the discipline that has brought us to this point.”
The restructuring program will primarily focus on Nigeria and Argentina. P&G plans to transform Nigeria into an import-only market, effectively dissolving its on-ground footprint in the country and reverting to an import-only model. The company believes this strategic decision will enable it to concentrate on markets with the highest potential.
Responding to questions about the impact of the restructuring on P&G’s overall portfolio, the CFO explained that Nigeria represents a $50 million net sales business. Considering the company’s overall portfolio worth $85 billion, P&G anticipates no material impact on the group’s balance sheet from a sales or profitability standpoint.
P&G, operating in approximately 180 countries globally, supplies a range of products to the Nigerian market, including Always sanitary pads, Pampers, Ariel detergent, Oral B toothpaste, and Gillette shaving sticks.
This move follows the challenging business landscape in Nigeria in 2023, marked by economic struggles and the implementation of reforms such as the removal of the fuel subsidy and the naira float. Several companies have faced difficulties, leading to downsizing or closures in the country. Unilever Nigeria previously announced its exit from the home care and skin cleansing markets in Nigeria as part of efforts to find a more sustainable and profitable business model.
