120 workers sacked as P&G shut down $300m Nigerian production plant

About one year after the commissioning of its largest Nigerian plant, Procter & Gamble (P&G) will close the $300 million production plant at Agbara Industrial Estate, Ogun State. The shutdown comes just a year after the production line was commissioned by Vice President Yemi Osinbajo and Governor Ibikunle Amosun of Ogun State in June 2017.

Company sources have revealed that about 120 workers are being fired as part of the closure, with some of them already receiving their sack letters while about 30 employees would be outsourced or deployed to the remaining plant in Nigeria.

The company, a multinational FCMG with existing in 180 countries around the world, is the producer of Always sanitary pad, Pampers, Ariel detergent, Oral B toothpaste, Gillette shaver, among other products on the Nigerian market. But just a year after the plant was launched, the company struggled to break even due to a myriad of factors.

Insiders familiar with development also say the company is fighting the challenge of government policies that regulate the importation of raw materials for production. According to them, the cost of importing raw materials became unbearable for the company and they refused to involve in shady business to deceive the system and facilitate the import.

“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 top official of the troubled firm disclosed.

Similarly, another factor said to be responsible for the shutdown was the unhealthy competition being faced by the company.

“Our competitors invested much less in their factory, can maneuver their way in the system, and thus produce and sell for much less. We cannot do that. Our investment in Agbara is arguably the largest single investment by a non-oil firm in Nigeria. But we just have to shut it. The loss is much,” the source said.

In May 2018, Unilever, the largest Fast Moving Consumer Goods player in Nigeria (FMCG), also announced the sale of its spread business, Blue Brand, as the worst performing unit. About 272 manufacturing plants were closed across the country in 2016, according to the Nigeria Manufacturers Association.