Headline: Unilever Halts Production and Exits Homecare and Skin-Cleansing Markets in Nigeria Amidst Challenging Business Environment
In a recent development, Unilever Nigeria has made the decision to cease production and sales of its home care and skin cleansing products, marking a significant shift in the company's operations. This decision comes after Unilever Nigeria's announcement 10 months ago to exit both markets, and has now been confirmed in the company's unaudited interim financial statements for the year ending December 31, 2023, which were published on the Nigerian Exchange Limited (NGX) on Wednesday.
Unilever Nigeria, renowned for brands such as Omo, Sunlight, and Lux, had previously expressed its intention to discontinue the production of these homecare and skin-cleansing products. The company revealed in its earnings report that production and sales officially ceased in December 2023. As part of this strategic shift, Unilever has leased out the factory that was previously used for manufacturing these products to a third party for a period of 10 years, with annual rental payments.
As a result of this decision, Unilever Nigeria will now focus solely on its foods, beauty and wellbeing, as well as personal care product lines. However, prior to exiting the homecare and skin-cleansing markets, the company experienced a decline in revenue and an increase in losses. In 2023, revenue plummeted by 45.1 percent year-on-year to N16.48 billion, compared to the N23.92 billion generated between January and December 2022. Additionally, the company's losses increased to N3.72 billion last year, surpassing the previous year's figure of N1.49 billion.
Unilever Nigeria's decision to withdraw from the homecare and skin-cleansing markets reflects the challenging business environment faced by many manufacturing companies in Nigeria over the past decade. A combination of factors, including foreign exchange scarcity, unreliable power supply, port congestion, excessive taxation, security concerns, and inadequate infrastructure, have taken a severe toll on businesses across the country. Moreover, high energy costs, a slowdown in industrial output, and sluggish demand for products have further exacerbated the challenges faced by the manufacturing sector in Nigeria.
Unilever's strategic shift signifies the company's response to the harsh realities of the business landscape, as it seeks to adapt and concentrate its efforts on other product categories. The move also highlights the pressing need for comprehensive reforms and improved conditions that foster a favorable business environment, ultimately paving the way for sustainable growth and development in Nigeria's manufacturing sector.
