There are indications that PZ Cussons may consider exiting Africa following a significant decline in sales, particularly in Nigeria. Bloomberg reports that the company is reevaluating its presence in Africa, shifting away from a region where it historically invested in its operations and debt reduction.
Established in Sierra Leone 140 years ago, PZ Cussons has long relied on Africa for nearly 30% of its sales, despite experiencing a substantial 48% decrease in the past year alone.
Operating across multiple continents, including the Asia-Pacific, Europe, and the Americas, PZ Cussons boasts of an annual sales figure of £500 million ($622 million).
Addressing the issue, Jonathan Myers, Chief executive officer said; “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 are going to be objective and not emotional in how we make this decision.”
Although the company’s shares rose by 5% on April 24, 2024, it has dropped by 50% over the past year.
The company also plans to sell St.Tropez, a label that has grown since it was acquired in 2010.
Myers revealed that in Nigeria, the company’s “financial and human resources spread too thinly to generate consistent returns.”
Some of PZ Cussons products sold in Nigeria include Morning Fresh, refrigerators and cooking oil.
The Naira’s devaluation affected sales and the inflation has greatly influenced customer’s purchasing power.
Olubukola Olonade-Agaga, PZ Cussons Nigeria company secretary said in an official statement, “It notifies the Nigerian Exchange Limited and the investing public that the Securities and Exchange Commission (SEC) has declined the Company’s request for its No Objection to PZ Cussons (Holdings) Limited’s (the majority shareholder) intention to acquire the shares held by all the other shareholders of PZCN at an offer price of N23 per share.”
Some of the challenges faced by both local and multinational manufacturers in Nigeria include harsh government policies, forex availability, power challenges and constant devaluation of the Naira.
Unilever also declared the exit of PZ Cussons skin cleansing and home care products from Nigeria.
Recall in July 2023 GlaxoSmithKline exited Nigeria and Sanofi declared its decision to leave Nigeria. In November of the same year, Equinor Nigeria Energy Company (ENEC) which holds a 53.85% ownership in oil mining lease (OML) 128, including a 20.215 share in the Agbami field operated by Chevron sold its Nigerian operations.
Not forgetting Procter & Gamble (P&G) and some other international manufacturing firms who shut down their operations in the country.