PZ Cussons halts African exit plan as Nigeria’s economic outlook brightens

PZ Cussons has announced the suspension of plans to sell its African subsidiaries on the back of an improvement in Nigeria’s economic fundamentals.

In a statement seen by BusinessDay on Thursday, the consumer goods company said it is retaining its Africa business and has sets out ambitious growth plans for it, as part of a wider Group strategy built upon a portfolio balanced between developed and emerging markets.

In April 2024, PZ Cussons had announced plans to conduct a strategic review of its Africa operations. As part of the review, the Group announced the sale of its 50 percent equity interest in PZ Wilmar Limited – its non-core edible oils business in Nigeria – to Wilmar International Limited, its joint venture (JV) partner for a total consideration of $70 million.

The Group received significant levels of interest from a number of parties regarding the wider Africa portfolio. The statement said the board has, however, concluded that the greatest value for shareholders will be created by retaining the business and building a Group portfolio balanced between its developed markets of United Kingdom and Australia/New Zealand and its emerging markets of Indonesia and Nigeria.

“The Group is now setting out plans to build a winning portfolio of locally-loved brands, building on the improved momentum achieved in recent years,” the company said.

This, the Group said, will be delivered through three key pillars.

One is the core business, which encompasses growing the core business in Nigeria, Kenya and Ghana through consistently delivering fundamentals of brand-building, distribution expansion, revenue growth management, in-store execution and use of digital. “These factors, including the fact that the Nigerian business has, since FY22, more than doubled the number of stores which it serves directly, have been major contributors to the business’ growth in recent years,” the group noted.

Two is the category side, involving the expansion into new category adjacencies, including a focus on men’s grooming and beauty, with the existing brands of Venus, Imperial Leather and Premier.

Three is the pan-Africa growth, which incorporates the expansion in other African markets, which will be served from the existing footprint in Nigeria and Kenya.

“The strategy is based on the significant long-term opportunity in Africa where population is forecast to grow by more than 900 million over the next 25 years, representing over half of total global population growth.

“Nigeria’s population alone is forecast to increase by over 100 million further benefitting from urbanisation and rapidly growing middle classes. Recent economic and currency trends have been more favourable, supporting double-digit revenue growth in our Africa business in the first half of the financial year.”

The statement further said the board is confident that PZ Cussons is well placed to succeed through leveraging local insights and its brand heritage.

“The business will continue to benefit from its scale in manufacturing and route-to-market expertise, particularly against a competitive landscape which has seen a number of multi-nationals exit the market in recent years. Nearly 80% of Nigeria revenue is generated from brands holding #1 or #2 positions in their categories.”

Source: By Odinaka Anudu, Business Day