As Nigerians complain about the expensive prices of pharmaceuticals like Augmentin as a result of GSK’s exit from the country, it appears that more problems are on the way as Procter & Gamble (P&G) is also planning to leave.
Procter & Gamble (P&G) has announced plans to discontinue its on-ground operations in Nigeria.
Andre Schulten, the group’s Chief Financial Officer, stated this during his presentation at the Morgan Stanley Global Consumer & Retail Conference.
The company claimed that doing business in Nigeria as a dollar-denominated organisation is tough and that the macroeconomic reality in Nigeria is to blame for its current strategic move.
Mr Schulten stated, “The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create U.S dollar value. So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.”
“So with that in mind, we are announcing a restructuring program with the intent to adjust the operating model and adjust the portfolio to ensure that we maintain the portfolio discipline that has brought us to this point. The restructuring program will largely focus on Nigeria and Argentina. We’ve announced that we will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground in Nigeria and reverting to an import-only model.”
It went on to say that the decision will allow the corporation to focus on markets with the greatest potential.
In response to queries concerning the impact of the company’s planned restructuring in Nigeria and Argentina on the portfolio of the entire group, the CFO stated that Nigeria is a $50 million net sales operation.
In comparison to its whole portfolio of $85 billion, the company does not expect any major impact on the group’s balance sheet in terms of sales or profitability.
The current macroeconomic difficulties in Nigeria have harmed international USD-denominated enterprises in the country. GSK said in August that it was ceasing operations in Nigeria and appointing a third party to handle distribution.
These companies have frequently stated that it is impossible to send back US cash outside of Nigeria. The Central Bank has revealed that it has a $7 billion FX backlog.