The largest single investment by a non-oil firm in Nigeria is shutting down temporarily

On Wednesday morning one of Nigeria’s foremost news platform, Premium Times reported that Procter & Gamble (P&G) is set to shut down its largest Nigerian plant located in Agbara Industrial Estate Ogun state. This news comes a year after the Vice President Yemi Osinbajo and Governor Ibikunle Amosun of Ogun State commissioned the $300 million state of the art production line on a 40.2 hectares of land owned by the leading American fast-moving consumer goods (FMCG) company. This plant is used for the production of its popular Always sanitary pads and Pampers brand of diapers which is competing with other brands that seem more affordable. The Agbara plant has been described as the largest single investment by a non-oil firm in Nigeria.

“We are shutting down our Agbara facility to enable us to restructure because we want to have a more effective and sustainable business. However we are not shutting down immediately as we still need to produce to ensure that we have more products on the shelves that will last until we come back,” a source in P&G told TheNerve Africa.

It was also reported that P&G had also divested from one of its plants in Oluyole Estate, Ibadan, Oyo State where it produces Vicks lemon plus and Ariel detergent.

“Our plant in Ibadan is still functioning we are not shutting down that plant. We are not leaving Nigeria after operating for over 25 years,” the source said further.

In the same article, it was reported that P&G has been facing stiff competition from other sanitary pads and Diapers brands available in Nigeria. This is because it is so expensive to import raw materials which are not produced in Nigeria and other companies take the shortcut by manoeuvring the system to do so.

Is P&G really facing stiff competition in Nigeria?

From all indications, one of the problems P&G which has been in the Nigerian market for about 25 years, needs to look into unarguably is the stiff competition that its Sanitary Pad and Diaper brands are facing. A lot of Nigerians have switched from using the popular Always sanitary pad to using Ladycare and Ladysept pads. Most hospitals around the country now demand that expectant mothers come with Ladysept pads as opposed to Always or Ladycare for delivery.

Both Expectant and Nursing mothers have switched to buying Molfix instead of Pampers brand because Pampers is more expensive. From all indications, it looks like the Molfix brand which just hit the market a few years ago is taking over the spot of Always brand. You can hardly walk pass three shops without seeing the Molfix brand on display.

According to a market report of AC Nielsen, Molfix has taken over 44 percent diaper market share totally eclipsing Pampers. Over the two years since its introduction into the Nigerian market, Molfix consistently challenged Pampers’ hold on the title of ‘market-leader’. Pampers fell far behind, holding on to only 37.3percent market shares. The other brands were however relegated to a little corner in the market where they now share 18.4percent market share. Hayat Kimya Group owners of Molfix commissioned a $100 million production plant in Agbara in 2017, and it is still functional.

If P&G intends to restart the Agbara plant, they will need a better cost, pricing, and marketing strategy because, from all indications, it will not be business as usual for them.