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P&G set to shut down $300 million Plant in Ogun State 1 Year after Commissioning | UPDATE: Firm says it’s Only Exiting Production & is “Here to Stay”

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P&G set to shut down $300 million Ogun State Production Plant 1 Year after Commissioning | BellaNaija

Only a year after commissioning what is said to be the largest non-oil production plant in Nigeria, P&G is reportedly set to shut it down.

The plant, located in Agbara Industrial Estate, Ogun State, had been commissioned in 2017 by Vice President Yemi Osinbajo, and had cost a reported $300 million.

According to Premium Times, the plant, which produces Always sanitary pads and Pampers diapers, is set to be shut down after running at a loss.

A company source who spoke to Premium Times said, “About 30 staff will be left who may either be outsourced or deployed to our only remaining plant in Nigeria,” with 120 to be laid off.

A top official of the company who spoke to the paper said they were shutting down because of the cost of importing raw materials and their unwillingness to manoeuvre the system.

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.

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.

UPDATE

P&G has released a statement concerning the news above, stating that the correct information is that it is restructuring its operations in Nigeria.

See the statement signed by its Director Global Government Relations & Public Policy, Temitope Iluyemi below:

We are aware of the media publications quoting incorrect information about the closure of the P&G Agbara Plant site and hereby issue the correct facts of the plant restructuring project.

P&G is restructuring its Nigeria manufacturing operations to deliver a more effective business operation for now and sustainably for the future. This will entail an exit from production in its Agbara plant. We will strengthen our manufacturing operations in the Ibadan plant, scale up our contract manufacturing operations, as well as continue to invest in our local talents.

P&G is a foremost global consumer goods providing world class products sold in over 180 countries worldwide. This is purely a business decision for a sustainable and innovative business operation in Nigeria.

P&G is a model investor in Nigeria investing economically and socially and investing in technology transfer in partnership with local suppliers, agencies, contract manufacturers and the Government to deliver key development objectives of inclusive growth. We have been operating with world class standards in Nigeria for over 25years, we believe in Nigeria’s potential and are here to stay for the long haul developing our Nigerian talent.

Photo CreditPremium Times

21 Comments

  1. Radiant

    July 4, 2018 at 2:08 pm

    I am saddened by this. Let’s get our PVCs and then find leaders that can solve Nigeria’s problems including issues of what to or not to import and eliminating bribery in the importation sector.

    • Fleur

      July 7, 2018 at 4:41 am

      This is an unfortunate story and a testament to Buhari’s inability to secure even the smallest economic success for the common man.

  2. Gina

    July 4, 2018 at 2:36 pm

    Really Sad. I have no idea what goes on in the mind of our leaders. How can we grow with the way things are going!

  3. Anon

    July 4, 2018 at 3:13 pm

    This is very sad. Procter & Gamble for that matter.

  4. Bowl

    July 4, 2018 at 4:01 pm

    This hurts somewhere deeper than my bones.
    Nigerians arise for the country you say love !

  5. x-factor

    July 4, 2018 at 4:08 pm

    I do not absolve leadership of irresponsibility. However,from a business perspective, maybe looking at cost optimization options would have been some possible way forward. What is Molfix’s and other competitors’ cost structure, I don’t believe in price wars but then, may be there are ways to manage overheads to bring the cost of production lower than it currently is

    Secondly, what about investing in R & D on possible local content for raw materials? P& G have some of the brightest minds……

    All in all, we need to do better with ease of doing business….. and we must NOT allow this shut down to happen, otherwise it sends the wrong message to the international community that this country is not a viable investment option @ Governor Ibikunle Amosun,, Okechukwu Enelamah, Kemi Adeosun ,Col. Hameed Ibrahim Ali (Rtd),Senate and House committees on trade and investment

    In another light, this may just be an opportunity for innovation for local players to expand their market. ( One man’s meat is another man’s poison after all) ….

    • Radiant

      July 4, 2018 at 4:26 pm

      Good points right there.as well.

    • Physio Tinu

      July 5, 2018 at 12:11 am

      @x-factor, so do you think people who invested $300million USD do not know all this theory you typed here? What we ought to be asking is what do they mean by “manoeuvring the system” looks like big grammar for kick backs or corruption

      This is so sad. The more things change, the more they remain the same. This time it’s VP osinbajo and P&G factory, a few years ago it was Obasanjo and Virgin airlines. Who is our saviour in this country?

    • Ovadje

      July 5, 2018 at 3:45 pm

      @x-factor, thank you! Manufacturing in Nigeria should involve value-addition and not just simply importing “raw materials” and packaging them locally. How can P & G not be able to figure out how to source raw materials locally in a petrochemical-based economy? SMH.

  6. Jude

    July 4, 2018 at 4:38 pm

    Any other sane country, and this will be treated as a huge seismic event. The govt will be running helter skelter to make sure this company finds a way to do keep their business viable in the country. But Nigeria is not a sane place! An investment of 300m dollars wants to be allowed to just fold up like that!! This is an indictment on this govt that keeps saying it wants to move away from too much focus on the oil industry. A huge shame. There is huge unemployment in Nigeria. Do not understate the allied industries that will be affected by this.

  7. zzzzzzzzzzz

    July 4, 2018 at 5:16 pm

    The truth is some of these companies use raw materials sourced from their parent companies abroad to manufacture finished products in Nigeria. For instance potato is grown in Nigeria but during the forex crunch 2 years ago some foreign chicken fast food outlet did not have chips for sale because they could not import potato chips packaged by the parent company. I suggest procter looks inward and source for materials from within so that the plant would not go to waste.

    • slice

      July 4, 2018 at 10:28 pm

      But that’s to keep all products the same. If you want McDonald’s fries, naija potatoes won’t do cause all these fries have their unique taste. I’d think the state government would be all over whatever can be done to keep this plant open. When they say they can’t maneuver, are they talking about bribes. I know american law strongly forbids bribes even overseas. The workers should be protesting to their local and state government. Why is this the first we are hearing of it. Is this a cry for help

  8. tunmi

    July 4, 2018 at 6:39 pm

    Nigerian parents on BN, how is your experience with pampers diapers?

    from what I hear, they’re too expensive to be as ineffective as their counterparts.

    Also, you couldn’t source locally? Now that’s just your fault. Currency risk is a

  9. THE MUMMY

    July 4, 2018 at 9:56 pm

    @zzzzzzzz, THE FACTORY WILL CERTAINLY NOT GO TO WASTE, it will be taken over by RCCG or Winners chapel. The poverty in this nation in the next few years will touch everybody, the rich cannot sleep/rest when overrun by the poor!

  10. Joseph

    July 5, 2018 at 12:14 am

    So Sad and our Government can not ask to know how to help

  11. JaySol

    July 5, 2018 at 4:06 pm

    What are those raw materials that get sourced from abroad?
    Can they help jumpstart the economy by throwing out a challenge or something to look inwards and see if they can be manufactured here?

    The competition from importers of foreign Always is a problem of theirs.

    This is room for smaller companies to produce sanitary towels for women in Nigeria and possible exportation.

  12. Kach

    July 5, 2018 at 4:30 pm

    Please do they still have some of their product that are not expired yet in the factory? we need to pack them before they shut down

  13. varojollofusa

    July 6, 2018 at 9:45 am

    This seems like a cry for help from the government…and considering how close the Ogun State Governor is to Buhari, it is safe to assume that the issues raised will be looked into…but amicable resolution is another case entirely…

  14. Tracy Edward

    July 7, 2018 at 1:03 am

    Complainers. You guys cannot read. They are not closing down but restructing their business here in Nigeria, like other business that what to grow, will restructe itself. Hey!!! Nigeria stop complaining and leave the Goverment alone. The goverment are doing a wounderful Job. God bless Nigeria in Jesus Name Amen-

    • Corolla

      July 7, 2018 at 1:11 am

      Yes ke. They are doing a “wounderful” job of wounding the citizens.

    • Elle

      July 7, 2018 at 5:52 am

      Tracy, anytime I read your comments, I just shake my head.

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