Cynthia Ezekwe
PZ Cussons, an international consumer goods manufacturer, has announced intentions to strategically review its business operations in Africa, including the possibility of exiting the continent. This consideration stems from the unfavorable economic conditions in Nigeria, such as naira devaluation and inflation, which have markedly affected the company’s sales and operations, leading to a substantial 48 per cent decline in sales.
Due to persistent foreign exchange shortages in Nigeria, several consumer goods groups, including PZ Cussons, have been reevaluating their strategies in the country. These shortages have created challenges for multinational corporations in repatriating their earnings, prompting a reassessment of their options.
Jonathan Myers, CEO of PZ Cussons, noted that the macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business.
“As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive. In addition to the challenges of the significant exposure to Nigeria, the group is too complex for its size, with financial and human resources spread too thinly to generate consistent returns,’’ Meyers said.
The PZ Cussons CEO stated further that the situation has led to constraints on the company’s competitive advantages when compared to both larger multinational corporations and some smaller, more focused entities.
“We have to have an eye on the future as well as a respect for the past. There could be many permutations of the outcome, which could include a change in ownership. We’re going to be objective and not emotional in how we make this decision,” he noted.
Myers maintained that the group would uphold a clear vision for the future and maintain objectivity in its decision-making processes to ensure the ongoing advancement of the company.
Having faced a similar scenario, some consumer goods and healthcare companies have struggled to maintain operations in Nigeria. Unilever ceased production of homecare and skin-cleansing products, a significant contributor to their sales in the country, a year ago. Also, GSK’s Nigerian affiliate downsized its operations last year, discontinuing the distribution of its own medicines and switching to third-party Nigerian companies.
