PZ Cussons Plc may leave Africa following a significant decline in sales in its Nigerian operations.
The British soap manufacturer, established in Sierra Leone 140 years ago, is considering reviewing its Africa business, potentially redirecting its focus away from the region where it originated.
As reported by Bloomberg, this move aims to prioritize investment in its remaining ventures and reduce debt.
Despite experiencing a 48% sales drop in Africa over the past year, the company still generates nearly 30% of its sales from the continent. With an annual revenue of approximately £500 million ($622 million), PZ Cussons operates across various regions and product categories, including Europe, the Americas, and the Asia-Pacific region.
The chief executive officer, Jonathan Myers, said: “We have to have an eye on the future as well as a respect for the past. There could be many permutations of the outcome, which could include a change in ownership. We are going to be objective and not emotional in how we make this decision.”
Following a strategic review, the board has decided that on top of the difficulties in Nigeria, the company is too complicated for its size. In a financial update, it cited “financial and human resources spread too thinly to generate consistent returns.”
In Nigeria, the company sells a range of products including Morning Fresh dishwashing liquid, refrigerators and cooking oil.
The devaluation of the naira means sales fell sharply in pound terms. It also stoked inflation which has hit consumers’ purchasing power.
In March, regulators rejected PZ Cussons’s application to buy out the 27 per cent of its Nigerian arm that it does not own, in order to delist it. The regulator said the offer price of N23 per share was unfair.
