Victor EzejaProcter & Gamble, a major consumer products company, has disclosed plans to close its ground operations in Nigeria and begin to import products into the country’s market.
This was said by the company’s Chief Financial Officer, Andre Schulten, in a speech at the Morgan Stanley Global Consumer & Retail Conference.
Schulten said the current foreign exchange crisis rocking the country and other macroeconomic realities has impacted the company’s operations as an organisation denominated in dollars, hence the decision to restructure its operating model.
He also said the company faces a similar challenge in Argentina.
“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,” Schulten stated.
“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 went on to say that by making this choice, the business would be able to concentrate on its most promising markets.
He further stated that the company’s overall portfolio is worth $85 billion while its net sales business in Nigeria is $50 million. He therefore dismissed any assumption that the restructuring would have any material impact in terms of sales.
The challenging economic situation in Nigeria has negatively affected many companies including GlaxoSmithKline (GSK), a British multinational pharmaceutical company that announced its exit from Nigeria in August.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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