Following the recent announcement made by the Consumer goods giant, Procter & Gamble to dissolve on-ground operations in Nigeria and turn the country into an import market, many consumers have expressed great anxiety and fears over possible job losses and escalating prices of essential items such as diapers, sanitary pads, and other household goods.
While announcing the exit the exit, the Chief Financial Officer of the group, Andre Schulten during his presentation at the Morgan Stanley Global Consumer & Retail Conference 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.
According to Mr. Schulten, “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” he added.
While expressing concern about the exit on social media, @StephAdamu said “The potential exit of Procter & Gamble in Nigeria is going to deal with us terribly. It’s already expensive to buy sanitary pads and pampers then imagine when they leave, we can all see the result of the prices of drugs after GSK left. How are we going to handle purchases of products like Always sanitary towels, pampers, Ariel, and co? When will Nigeria as a country grow beyond importing everything and manufacturing our own products locally? The coming year is going to be a tussle”
Another concerned citizen @Mavisikpeme also wrote, “P&G living Nigeria means 5,000 Nigerians have lost their jobs. This was a company producing the likes of Ariel detergent, oral B toothpaste, always pad, and pampers to mention but a few. Renewed shege promax !!”
SportsDokita underscored the potential rise in job insecurity and the discouraging effect on foreign investors, stating “P & G is the latest company to close down its operations in Nigeria and will now revert to IMPORTATION which will make their products more expensive. In case you don’t know what they produce, they produce Ariel, pampers, batteries, shaving sticks, etc. Now imagine the number of Nigerians that have lost their jobs just because these guys are leaving. Tinubu keeps making the economy unbearable and say you’re looking for foreign investors when the ones here are freaking LEAVING!!!!!”
The company 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.