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Business News

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.

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.

Deal book 300 x 250

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.

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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Business

Royal Academy of Engineering invests over £3.5 million in Nigeria, others

The academy has awarded over £3.5 million in 37 projects in Nigeria and across 13 African countries.

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The Royal Academy of Engineering has awarded over £3.5 million to 37 projects in Nigeria and across 13 African countries to promote better training and sustainability and diversify economies.

This was disclosed by the Academy via a statement issued and seen by Nairametrics on Thursday to mark the UNESCO World Engineering Day 2021.

It stated that the Academy’s interest in partnering with partner academic institutions’ projects focused on realizing sustainable development goals.

One of such projects, according to the statement, is the renewable energy project recently embarked on by Engineering students in the University of Abuja, Nigeria.

It stated, “A new awardee of the HEPSSA programme, the University of Abuja, in a project titled “Renewable energy utilization: Accelerating diffusion of solar power systems”, seeks to address the problem of access to affordable and clean energy with a view to enable accelerated diffusion solar power systems.”

Commenting on the progress achieved in Africa, Nigerian born Engineer in the UK, Yewande Akinola MBE, who is also a member of the Royal Academy of Engineering GCRF Africa Catalyst Committee, said:

“While we see immediate improvements in skills and innovation through these programmes, the real win is establishing a framework for lasting change. This will equip communities in Africa to anticipate and plan for the challenges posed by climate change, urbanisation and economic development. The continent is transforming rapidly, and those engineering its future need the skills to think on their feet.”

Stressing the need for strategic partnerships and buy-in of stakeholders, she said, “By developing strong alliances between local partners in sub-Saharan Africa and the UK, we can enable learning, collaboration and sharing of best practice, which in turn will build skills to boost innovation. But there is much more to be done, which needs the continued support of investors and partners.”

She added that the Academy aimed to support the development of a diverse and future fit workforce across the continent.

“It is estimated that fewer than 10% of engineering posts in Africa are currently occupied by women. GCRF Africa Catalyst has worked with Women in Engineering (WomEng) to promote gender diversity across a wide spectrum of professional experience.

“WomEng’s work with Eswatini’s Registration Council for Architects, Engineers, Surveyors and Allied Professionals has resulted in seven registered female members where they initially had none. A HEP SSA project with the Institute of Engineers Rwanda also helped to increase the number of female internship applicants from 5% to 2018 to 25% in 2019,” she said.

Highlights of achievements of the Africa grants:

  • Over 2000 professionals trained by Professional Engineering Institutions across sub-Saharan Africa.
  • Over 530 student industry placements since 2013. Number of students obtaining industry internships increased from 40% to 90% over the course of one project in Zambia
  • Diversity & Inclusion initiatives have driven equal gender participation in programmes. A project from the Institute of Engineers Rwanda helped to increase the number of female internship applicants from 5% in 2018 to 25% in 2019.
  • 50 individual course curricula reviewed and improved as a result of industry-academia partnerships.
  • Almost 50 UK organisations and 400 in-country bodies involved as project partners so far.

What you should know

  • Launched in 2016, with support from the UK government’s Global Challenges Research Fund (GCRF), the Africa Catalyst initiative allows Engineers to focus on issues of specific importance to their relevant jurisdictions while facilitating good governance practices.
  • The Royal Academy of Engineering is showcasing its impact on enhancing collaboration, education, and diversity in engineering in sub-Saharan Africa, delivered through its Africa grants programmes ahead of the second UNESCO World Engineering Day for Sustainable Development on the 4th of March 2021.

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Entertainment

Veteran broadcaster, actor, Sadiq Daba is dead

Daba died on Wednesday evening after losing a battle to leukaemia and prostate cancer.

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Veteran broadcaster and actor, Sadiq Daba, died on Wednesday evening after losing a battle to leukaemia and prostate cancer.

His death was confirmed by filmmaker, Kunle Afolayan, with whom he recently worked with on the 2020 motion picture, Citation.

Afolayan, who said that the ace broadcaster died on the evening of Wednesday, March 3rd, said he spoke with his wife and son who confirmed his passing to him.

Many Nigerians, including billionaire Femi Otedola, had donated money for his treatment abroad and showed massive support on social media.

Daba made waves in the 1980s on Nigerian Television Authority (NTA).

He has featured in several TV series and movies, with “Cock Crow at Dawn” and “October 1st” as notable mentions.

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