Afrigather Kimberly-Clark, producer of the favored Huggies diapers, is reportedly finalising plans to shut its $100 million manufacturing facility in Ikorodu, Lagos.
In line with an nameless supply cited by Nairametics, the plant has been grappling with extreme manufacturing shortages from late 2023 into 2024.
The insider blamed the unfortunately development on excessive prices of vitality and uncooked supplies, coupled with a decline in product demand.
In his phrases:
“Our first two years have been implausible when it comes to gross sales progress and market shares inside the diaper business. Quick ahead into late 2022 and 2023 was actually unhealthy years for the coy on account of financial scenario.
“Operating value is extraordinarily on the excessive facet. Our fastened spent on a month-to-month foundation is above N500 million and we spent about N100 million on simply fuel consumption for powering the fuel engine apart upkeep.
“The corporate has two belongings and for final yr, these belongings didn’t run for like 90 days in three hundred and sixty five days. Earlier this yr, the coy needed to downsize to 2 shifts from 4 shifts.
“We run 24hrs and 7days and three hundred and sixty five days earlier than however at present we don’t run on Friday, Saturday and Sunday anymore due to the financial scenario.
“There may be already an embargo on exterior recruitment. The corporate is on the lookout for methods to cut back value since it isn’t making a revenue.”
The Ikorodu facility was supposed to mark a recent begin after the same shutdown in 2019, however persistent financial difficulties have led to a different untimely closure.
Kimberly-Clark additionally produces Kotex, sanitary pads, and different hygiene and private care merchandise.
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Multinationals’ Exit
In the previous couple of months, main multinationals have shut down their companies in Nigeria as a result of identical harsh financial local weather.
Notably, Procter and Gamble additionally ceased manufacturing in Nigeria final yr after a major funding in Ibadan, and PZ Cussons is reconsidering its dedication to the Nigerian market.
These closures symbolize a blow to the Nigerian authorities’s efforts to draw overseas direct investments and stimulate native manufacturing.
This pattern suggests potential hike in the price of dwelling for Nigerian households.
As these firms shift in the direction of import-based fashions, the depreciation of the Naira might additional inflate the costs of important merchandise like diapers and sanitary pads.
