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Stiff competition shuts down P&G’s $300m diapers plant

Procter & Gamble (P&G) is in the process of shutting down its multi billion Naira Agbara plant.

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The competition in Nigeria’s diapers industry is set to ease up as one of the industry’s strongest competitors, Procter & Gamble (P&G) is in the process of shutting down its multi-billion naira plant located in Agbara, Ogun State.

This development is coming barely one year after the leading American fast-moving consumer goods (FMCG) leader decided to expand into the Nigerian market.

As we reported, Procter & Gamble last year (June) commissioned the production facility after spending the whopping sum of $300 million to construct it. The state of the art production plant sits on some 40.2 hectares of land; producing diapers and a range of sanitary pads, including the notable Always brand.

Note that even though Procter & Gamble has yet to issue any official statement regarding the shutdown speculations, sources close to the situation confirmed that it is happening, even as some 120 employees are gradually being laid off in preparation for the eventual closedown.

“About 30 staff will be left who may either be outsourced or deployed to our only remaining plant in Nigeria.” – Anonymous Source

A curiously surprising development

This is a surprising development considering that nobody saw it coming. Asides the fact that P&G had splashed millions of dollars on this project, the company was also at a more advantageous position to compete in a market where the demand for diapers is huge.

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Everybody seemed to have high hopes in P&G’s full expansion into Nigeria. Even the country’s Vice President, Professor Yemi Osinbanjo, had expressed delight in the project following its commissioning, while also expressing optimism that the multinational would help transform the FMCG sector. It, therefore, raises questions why the impending shutdown is even happening.

Interestingly, it turns out that Procter & Gamble has struggled to break even over the past one year due to challenges ranging from government regulations, stiff competition, and inadequate access to raw materials. Not long ago, a top management official of the company lamented that:

“it is so expensive to import these raw materials which are not produced in Nigeria. Other companies take the shortcut by maneuvering the system, but we cannot.”

A look at competition in the diapers industry and how it affected P&G

As stated above, one of the major challenges that is forcing P&G out of business is competition. There are currently more than a dozen brands of diapers and sanitary pads in the country, including Pampers, Molfix, Always, Nice Baby, Angel, Dry Love, Huggies, etc.

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Recall that Nairametrics‘ previous research into the prevailing competition in the pampers industry found that Hayat Kimya Group, makers of Molfix, is leading the market with 44% market share.

Procter & Gamble came in second with 37.3% market share, with the rest of the brands were however relegated to a little corner in the market where they now share 18.4% market share.

Much like P&G, Hayat Kimya Group last commissioned a $100 million production plant in Agbara which still operates.

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Now in view of P&G’s impending divestment moves, Hayat Kimya Group is at a greater advantage of taking over greater position of the market share.

Procter & Gamble is a multinational company with operations in at least 180 countries around the world. Its fast and moving (FMCG) products include toothpastes, detergents, shaving stocks, etc.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

3 Comments

3 Comments

  1. Frank

    July 4, 2018 at 11:47 am

    This is very bad news, a company in over 180 countries failing in Nigeria, it doesn’t say good about us.

  2. Toju Daniels

    July 5, 2018 at 11:08 am

    It’s like saying BBM folded up because of Nigeria. Pampers has been existing due to lack of competition. The diapers is rubbish and leaks, people were only buying because they could not afford foreign diapers. Molfix changed all that because its excellent quality yet cheaper than pampers. Molfix and Pampers are not mates at all quality-wise and no mother whose child does not react to molfix will use pampers. Check nairaland thread for new mothers and see complaints about pampers, yet the company’s customer care refused to react. I’m loving the competition, we need more of this to counter medicrity.

  3. Nguhi

    July 5, 2018 at 5:49 pm

    I am suprised that all those problems were not put into consideration before that lump sum was invested,Knowing that the raworld materials were not made in Nigeria.

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FEATURED

Official: Imo State is unemployment capital of Nigeria

According to NBS, 75.1% of the total employable people in Imo State are either underemployed or unemployed.

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Ogun, Imo States give free hand sanitizers

Data from the National Bureau of Statistics reveal Imo State, located in the South-Eastern part of Nigeria has the highest unemployment rate in the country.

In contrast, Anambra State is the state with the least unemployment in the country with 13.1% unemployment rate. The national average for the unemployment rate is 27.1%

Imo State has an unemployment rate of 48.7% as at the second quarter of 2020, by far the highest when compared to any other state in the country.

According to the data, 75.1% of the total employable people in the state are either underemployed or unemployed.

READ MORE: Nigerians react as Anambra lawmakers reject Prado SUVs for Innoson SUVs

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See highlights

  • Total number of employable people – 2.48 million
  • Fully employed people – 618, 481
  • Unemployed people in the state – 593. 347
  • Underemployed – 656, 394

Imo State is largely a civil service town and has been unlucky with state governors over the last 20 years. Private sector jobs are hard to come by in the serene state with most industries setting up show in nearby cities like Aba, Port Harcourt, and Onitsha.

The city was once notorious for ritual motivated murders and kidnappings but has since overcome these challenges.

READ MORE: Ride-hailing: Uber says industry guidelines are inconsistent, unclear

States Unemployment Rates – Q2 2020

Other States

Akwa Ibom State is next on the list with an unemployment rate of 1.14 million people. The state’s underemployed population is about 551k people while the unemployment and underemployment rates combined is 66.9%.

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The best: The state with the lowest unemployment rate in Nigeria is Anambra State with 13.1% out of the total working population of 2.25 million people. The state was 37 out of 37 states in the ranking of unemployment by state. About 1.9 million people in Anambra State are either fully employed (1.57 million) or under-employed (384k) in the state.

READ ALSO: Ekeh, Zinox boss, intervenes in Imo State with N1 billion

Lagos State, Nigeria’s commercial capital and where most graduates rush to for jobs currently has an unemployment rate of 19.5% and sits at 27 in the state by state unemployment ladder. The data shows about 6.8 million people make up the labour force population in Lagos State out of which 3.99 million people are fully employed and another 1.5 million people are underemployed. About 870k Lagosians who are employable did absolutely nothing.

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Concentration: In terms of the concentration of unemployed people, Rivers State came first with a whopping 1.7 million people out of jobs in the state. The state as a working population of 3.9 million. Rivers State unemployment rate is 43.7 and ranks third as the worst. 21.7 million Nigerians are unemployed.

Lagos State had the most employed persona with about 3.99 million people out of a total of 35.5 million.

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Economy & Politics

Nigeria’s unemployment rate jumps to 27.1% as at 2020 Q2

Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1% meaning about 21.7 million Nigerians remain unemployed.

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unemployment

Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1% indicating that about  21,764,614 (21.7 million) Nigerians remain unemployed.

Nigeria’s unemployment and underemployment rate (28.6%) is a combined 55.7%. This means the total number of Nigerians who are unemployed or underemployed as at 2020 Q2.

This is contained in a recently released unemployment data report published by the National Bureau of Statistics. Nigeria’s unemployment rate was 23.1% in Q3 2018 confirming it increased by 4% points between then and the second quarter of 2020.

READ MORE: Nigeria attracts more Bitcoin interest than any country globally

Key highlights

  • The number of persons in the economically active or working-age population (15 – 64 years of age) during the reference period of the survey, Q2, 2020 was 116,871,186.
  • The number of persons in the labour force (i.e. people within ages 15 -64, who are able and willing to work) was estimated to be 80,291,894. This was 11.3% less than the number persons in Q3, 2018. Of this number, those within the age bracket of 25-34 were highest, with 23,328,460 or 29.1% of the labour force.
  • The total number of people in employment (i.e. people with jobs) during the reference period was dwellers, it rose to 31.5% from 22.8%, while the rate among urban dwellers rose to 23.2% from 58,527,276.
  • Of this number, 35,585,274 were full-time employed (i.e. worked 40+ hours per week), while 22,942,003 were under-employed (i.e. working between 20-29 hours per week). This figure is 15.8% less than the people in employment in Q3, 2020
  • The unemployment rate during the reference period, Q2, 2020 was 27.1%, up from the 23.1% recorded in Q3, 2018. The underemployment rate increased from 20.1% in Q3, 2018 to 28.6%.
  • For the period under review, Q2, 2020, the unemployment rate among young people (15-34years) was 34.9%, up from 29.7%, while the rate of underemployment for the same age group rose to 28.2% from 25.7% in Q3, 2018. These rates were the highest when compared to other age groupings.

The data is coming after nearly two years when the last data was published. The bureau last published jobs data in the third quarter of 2018 citing funding as a major challenge.

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READ MORE: Dangote moves to reduce unemployment rate with investments in agriculture 

Key Take-aways

  • Nigeria’s youth remain the hardest hit by unemployment with over 13.9 million people aged between 15 and 34 years unemployed.
  • The data also shows 7.6 million of this subset did nothing.
  • Women also continue to bear the brunch of bad economy with about 12.2 million out of jobs from the 27 million currently unemployed.
  • Graduates and post graduates combined made up about 2.9 million of the total Nigerians that are unemployed.
  • In a surpising data, out of the 35.5 million Nigerians that are fully employed, 28.8 million of them never attended school (6.29 million) or did not have a tertiary education (22.5).
  • In fact, most fully employed people in Nigeria with SSS (Senior Secondary School certificates) are a whopping 13.2 million.

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Coronavirus

COVID-19: Nigeria, 6 other African countries to start antibodies tests next week

These countries are the first set of countries to commit to the testing.

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COVID-19: Nigeria, 6 other African countries to start antibodies tests next week

Nigeria and 6 other African countries will start conducting coronavirus antibodies tests as early as next week, as part of efforts to understand the extent of the outbreak on the continent.

Apart from Nigeria, the other African countries that will benefit from this include Sierra Leone, Zambia, Zimbabwe, Cameroon, and Morocco.

While making the disclosure in Addis Ababa, the head of the African Centres for Disease Control and Prevention, John Nkengasong, said that these countries are the first set of countries to commit to it.

READ MORE: British Airways pilots accept 20% pay cut to end job losses dispute

Western countries have been using antibody tests to discover how many of their citizens have been infected by the coronavirus disease, with the expectation that will help them reopen their economies.

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This new development is coming some days after the Nigerian Government started negotiations with prospective COVID-19 vaccine distributors to the country ahead of their availability.

READ ALSO: FG: Why there is no hurry to resume train operation, Lagos blue rail line ready 2022 

The Vice President, Yemi Osinbajo, who kick-started the negotiation on behalf of the Federal Government, in a virtual meeting with representatives of the vaccine candidate, told the co-discussants that Nigeria must be given priority when COVID-19 vaccine is ready for distribution.

Nkengasong said that Africa has so far conducted 9.4 million coronavirus tests, a 10% increase over last week. These tests show whether people currently have the coronavirus disease.

Experts said that the low levels of testing in many countries mean that Africa’s infection rates could be higher than being reported.

He said that 25 African countries still have full border closures, with 23 imposing tests at entry points. He also stressed on the need to harmonize border testing and recognize certificates in order to facilitate travel.

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