PZ Cussons Plc, a British soap-making company with a 140-year history in Sierra Leone, is contemplating an exit from Africa due to a substantial decrease in its Nigerian sales.
The decision comes under the government of President Bola Tinubu in Nigeria, where the company’s sales have significantly declined.
The company is mulling over a strategic shift away from its birthplace, as reported by Bloomberg.
The proposed move is designed to prioritize investments in other ventures and to alleviate debt, despite the fact that nearly 30% of the company’s sales still come from Africa. Despite a 48% drop in African sales over the past year, PZ Cussons, with an annual revenue of around £500 million ($622 million), maintains operations in various regions and product categories, including Europe, the Americas, and the Asia-Pacific region.
Jonathan Myers, the CEO, stated, “We need to look towards the future while honoring our past. The final decision could take many forms, including a change in ownership. Our decision-making process will be objective and unemotional.”
The board has concluded after a strategic review that the company is overly complex for its size, in addition to the challenges in Nigeria. It noted in a financial update that the company’s financial and human resources are spread too thinly to yield consistent returns.
In Nigeria, PZ Cussons offers a variety of products, including Morning Fresh dishwashing liquid, refrigerators, and cooking oil. The devaluation of the naira has led to a sharp drop in sales when converted to pounds and has fueled inflation, impacting consumer purchasing power.
In March, regulators turned down PZ Cussons’s bid to acquire the remaining 27% of its Nigerian subsidiary that it doesn’t already own, with the aim of delisting it. The regulator deemed the offer price of N23 per share as unfair.
