The business operating environment in Nigeria has remained challenging, particularly for the FMCG sector of the economy, due to issues with weak logistics, insecurity, and other high operating costs caused by subpar infrastructure. PZ Cussons, a well-known brand for hygiene, baby, and beauty products in Nigeria, once battled to survive alongside other brands in this unfavorable business climate marked by competition. Despite these obstacles, the business is quickly returning to profitability.
Analysts believe that this progress is largely due to PZ Global’s 2019 announcement that it would restructure its Nigerian business by simplifying operations and exiting non-core businesses and brands in order to improve overall profitability. For example, in September 2020, the company had to sell Nutricima, its Nigerian milk business, and in the first half of 2020, it had to close its Coolworld retail electrical stores, along with a review of the product portfolio, route to market, organizational design, and infrastructure.
About PZ Cussons
PZ Cussons is a global consumer goods company of British origin that promotes the welfare of individuals, families, and communities. Under the name Paterson Zochonis (PZ), the company was established in 1884 as a commodity trading firm in the Sierra Leone Colony and Protectorate by George Zochonis and George Paterson. Before the end of the nineteenth century, it expanded its operations to Nigeria.
The company is currently headquartered in Manchester, UK, and has operations in Europe, North America, Asia-Pacific, and Africa, employing approximately 3000 people worldwide. The company is viewed as multi-local, not just multinational, with its four main markets accounting for the majority of the company’s revenue and regarded as its priority. The company is also listed in the FTSE 250 Index and is listed on the London Stock Exchange. PZ Cussons Nigeria Plc is the publicly traded subsidiary of PZ Cussons Holdings, which owns the majority of the company.
Interestingly, Nigeria is PZ Cussons’ largest and most diverse single market, operating in Personal Care, Home Care, Food and Electricals PZ has a joint venture with PZ Wilmar (Food & Nutrition) and its subsidiary is HPZ (Electric goods).
Products
Globally its product portfolio is in two parts: Must Win Brands and Portfolio Brands. Must Win Brands are the company’s main focus for investment. Some of its products are: Cussons Baby oil, Joy soap, Morning Fresh, Premier anti-bacterial bar. Overall, its products are categorized into the following:
Hygiene brands: Joy soap, Carex handwash, Imperial Leather, Morning Fresh dishwashing liquid, Canoe detergent, Robb ointment.
Baby brands: Child’s Farm baby moisturizer, Cussons Kids, Cusson’s Baby oil etc
Beauty: St. Tropez, Sanctuary Spa, Venus, Chalres Worthington Fudge Urban
Other brands: Mamador vegetable oil, Devon Kings
Electrical: Haier Thermocool
Some of PZ competitors are Unilever, Dufil Prima and Grand cereals. This is based on some select products in each of PZ’s categories.
For example, Unilever’s Omo and Vaseline brands are in competition with PZ’s detergent and baby range such as Canoe detergent and Cussons baby range. However, Unilever’s brands are perceived to be more popular but slightly more expensive than PZ’s.
Speaking further to this, PZ’s cooking oil range (Mamador and Devon Kings) are in competition with Dufil Prima’s Power oil and Grand cereals Grand pure soya oil.
Board and Management
- Panagiotis Katsis– Chief Executive Officer, MD & Director: He is a Greece national and has an MBA from the University of Warwick, and degree at INSEAD and University of Salford. He has been with PZ since 2002 till June 2020 when he became the Regional Managing Director. He is experienced in managing complex businesses in demanding geographies with over 15 years of working experience acquired across West Africa, China and Europe.
- Zuber Momoniat– Chief Financial Officer & Executive Director: Zuber is an experienced Financial Director with a demonstrated history of working in the consumer goods industry. He studied Accounting at University of the Witwatersrand in South Africa and he is a strong finance professional skilled in Budgeting, Internal Controls, Report Writing, Technical Accounting Research, and Financial Accounting.
- Gbenga A. Oyebode- Non-Executive Chairman
- Joyce Folake Coker- Executive Director & Director-Human Resources
- Elizabeth Ngozi Ebi- Independent Non-Executive Director
- Ifueko Marina Omoigui-Okauru- Independent Non-Executive Director
- Paul Usoro- Non- Executive Director
- Jacqueline Ezeokwelume- Secretary & Legal Adviser
- Jitesh Himatlal Sodha- Non-Executive Director
- Evans Eghosa Enabuele- head- Financial Reporting & Accounting
Business Model
According to the company, its business model is founded on innovation, responsible sourcing and manufacturing, creative advertising and marketing, and strong customer partnerships and channels. The business makes profits from sales and distribution.
Performance
The company’s 2021 annual report indicates that globally, its revenue was £603.3m, while profit before tax is £63.2m.
As a listed company on the Nigerian Stock Exchange (NGX) under the ticker symbol “PZ”, its market capitalization is NGN 32.6 billion with its current share price being NGN 8.20.
Achievement
- Despite the high inflation rate the country experienced, the Q1-Q4 2022 results shows that the company reported a profit of N6.40 billion, reflecting an increase of 277.45% compared to the corresponding period of 2021.
- Its share price was 6.10 NGN at the start of the year and has since gained 34.4% on that price valuation.
- The company’s sustainability report indicates that its Palm Oil Policy initiative set out to ensure the oil (used in its personal care products), is responsibly sourced in order to protect the environment, has yielded positive results. The report states, “Today, 100% of our palm oil and palm kernel oil suppliers and 99.6% of our palm oil derivative suppliers have NDPE commitments to ours. Additionally, 99.5% of our palm oil and 97.9% of our palm oil derivatives are fully traceable to mill”.
In 2019, the company had to debunk a rumour that surfaced on social media that it had exited the Nigerian market. This came after PZ Cussons had disclosed that its financial performance for 2019 was bad due to sluggish demand and a number of other economic challenges in the country combined. However, with the positive result which the Q1-Q4 2022 indicates, it is hoped that the brand will continue to deliver on its brand promise and exceed consumers expectations.