About a year after commissioning its largest Nigerian plant, Procter & Gamble (P&G) is set to shut the plant.
The leading FMCG (Fast-moving Consumer goods) is set to shut the production plant situated in Agbara Industrial Estate, Ogun State, Premium Times reports.
The company expanded its footprint in Nigeria in June 2017 with the commissioning of the state of the art production line which reportedly cost the firm about $300 million to complete.
The plant is for its ‘Always’ and Pampers brand of sanitary pads and diapers.
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 was quoted as saying.
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, Gillete 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.
Recall that while speaking at the launch of the plant in June 2017, Osinbajo had said that the Federal Government of Nigeria was delighted about the investment. According to him, “this investment is in tandem with the drive of the current administration for manufacturing companies to produce locally and invest in human capital development.”
The vice president also encouraged other FMCGs to emulate P&G by investing in all the areas of the country as it will aid the growth of the economy.
Similarly, Amosun, the governor of Ogun State, commended P&G for locating the factory in Agbara, Ogun State.
“Ogun State is fast becoming a global destination for investment. We look forward to embracing innovations, initiatives and more companies willing to support the vision of the federal government through local production,” the governor had said.
But barely a year after the launch of the plant, the company has found it difficult to break even due to a myriad of factors.
Insiders familiar with the development reportedly told Premium Times that the company is battling with the challenge posed by government policies that regulate importation of raw materials for its production. 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 short cut by maneuvering the system, but we cannot,” a top official of the troubled firm disclosed.
Follow us on Twitter at @thesignalng
Copyright 2018 SIGNAL. Permission to use portions of this article is granted provided appropriate credits are given to www.signalng.com and other relevant sources.