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By our African Marketing Confederation News Team | 2024
PZ Cussons, which has a 140-year history in West Africa, is doing a ‘strategic review’ which could have significant market implications.
Nigeria’s well-documented economic difficulties may force yet another international FMCG player to exit the market, sell off assets, or switch to an import-only operating model.
UK-based PZ Cussons, which has had a West African presence for 140 years, is in the process of a ‘strategic review’ of its brands and the locations in which it operates. The company started its African business in Sierra Leone and has a small presence in countries such as Ghana, but its core focus in Africa has long been the Nigerian market.
The Imperial Leather soap brand has helped PZ Cussons build a strong West African presence.
Photo: Jni, Wikimedia Commons
The company sells well-known and established brands like Imperial Leather soap, Morning Fresh dishwashing liquid and Mamador cooking oil. It also manufactures home appliances products under the brand Haier Thermocool and operates the Coolworld electrical retailer.
In recent times, a long line of big global FMCG players have had to radically change their business models in Nigeria due to factors such as the weak naira, high inflation, foreign exchange problems, and declining consumer spending power.
Procter & Gamble and GlaxoSmithKline both announced last year that they would switch to an import-only model and close their manufacturing operations in Nigeria. Unilever has exited household care and skincare in the country, leasing out its factory.
Company is keeping its options open
According to PZ Cussons CEO, Jonathan Myers, “nothing is ruled out” as far as its operations in Africa are concerned.
“The macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business,” he said in a statement.
“As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive.
“We have to have an eye on the future as well as a respect for the past. There could be many permutations of the outcome, which could include a change in ownership. We’re going to be objective and not emotional in how we make this decision.”
Comments Trentype, the London-based emerging markets consultancy: “The reality is that its Nigerian business, which includes cooking oil and home appliances is an outlier. We think PZ Cussons is likely to want to sell these outright to give it strategic focus on its core strengths in baby products, hygiene and beauty.
“But its personal care brands are strong in West Africa and highly regarded by consumers. PZ Cussons could sell the assets and the rights locally, which are the most likely options. Or it could sell its assets and switch to an import only model, the major problem of which is that any buyer would use the assets to create a competitor.”
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