Newsonspot reports no fewer than 1800 direct staff and a further 3,000 indirect employees will be thrown into the job market as top consumer goods giant Procter & Gamble (P&G) has disclosed that it plans to dissolve on-ground operations in Nigeria and embrace an import market.
This development is coming a few months after global biopharma company, Glaxo-SmithKline Beecham (GSK) similarly closed its operation in Nigeria.
This news platform understands that the Chief Financial Officer of the group Andre Schulten stated this during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
Already, a check by our source on the website of the company showed that Nigeria has been removed from the company’s list of partners leaving only Egypt, Morocco and South Africa as the African countries.
The company explained that it is difficult to do business in Nigeria as a dollar-denominated organisation and the macroeconomic reality in Nigeria is responsible for its latest strategic decision.
Mr Schulten stated, “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 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.”
It further explained that the decision will 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. 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.
P&G are the producer of popular products like Ariel, Bonux, Pampers, Always Sanitary pad and Vicks in Nigeria.
Backstory
The current macroeconomic conditions in Nigeria have negatively affected foreign USD-denominated companies in Nigeria. In August, drug maker GSK announced it’s ceasing operations in Nigeria and appointing a third party to take over distributions.
These companies have often cited difficulty in sending back U.S. dollars outside Nigeria. The Central Bank has acknowledged it has a forex backlog to the tune of around $7 billion.
President Tinubu has instituted reforms aimed at attracting foreign investment into Nigeria, but it seems in the short term it has only brought more hardship.
