P&G shuts down $300 million factory in Nigeria

Front from Left: Yetunde Oni, Ag Director-General, National Agency for Food and Drugs Administration and Control; Professor Yemi Osinbajo, Ag President, Federal Republic of Nigeria; George Nassar, Managing Director, P&G Nigeria; Senator Ibikunle Amosun, Governor, Ogun State and Otunba Bimbo Ashiru, Commissioner for Trade and Investment, Ogun State at the site tour and commissioning of P&G's new Always line. [Photo credit: Financial Nigeria]

The Procter and Gamble $300 million production plant which was expected to contribute to Nigeria’s economic and social development through localization of its products has been shut down. The company expanded its footprint in Nigeria in June 2017 with the commissioning of the state of the art production plant.

Sources at the firm said about 120 workers are being laid off as part of the shut down with some of them already receiving their disengagement letters which is to commence next month.

“About 30 staff will be left who may either be outsourced or deployed to our only remaining plant in Nigeria,” a company source told Premium Times.

The company, a multinational FCMG with stakes in about 180 countries of the world, is the producer of Always sanitary pad, Pampers, Ariel detergent, Oral B toothpaste, Gillette shaving stick, among other products in the Nigerian market. The shutdown is coming barely a year after the production line was commissioned by Vice President Yemi Osinbajo and Governor Ibikunle Amosun of Ogun State.

A source explained that the cost of importing raw materials was becoming unbearable for the company, which has refused to involve in shady deals in order to cheat the system and ease importation.

“It is so expensive to import these raw materials which are not produced in Nigeria. Other companies take the shortcut by manoeuvring the system, but we cannot,” a top official of the troubled firm disclosed.

Similarly, another factor said to be responsible for the shutdown was the unhealthy competition being faced by the company.

“Our competitors invested much less in their factory, can manoeuvre their way in the system, and thus produce and sell for much less. We cannot do that. Our investment in Agbara is arguably the largest single investment by a non-oil firm in Nigeria. But we just have to shut it. The loss is much,” the source said.