In a dramatic reversal, consumer goods giant PZ Cussons Plc, the parent company of PZ Cussons Nigeria, has announced it will retain its African subsidiaries, shelving earlier plans to divest from the continent.
The decision underscores renewed confidence in Nigeria and Africa’s long-term economic prospects, following months of speculation about the company’s future in the region.
The company, which had previously signaled intentions to sell off its African operations as part of a strategic review, said improved economic conditions and strong revenue growth in Nigeria were key factors behind the U-turn
However, in a report titled: “Conclusion of Strategic Review of Africa” by the company on Thursday, the company noted that it is retaining its Africa business with ambitious growth plans.
“PZ Cussons today announces that it is retaining its Africa business and sets out ambitious growth plans for the business, as part of a wider Group strategy built upon a portfolio balanced between Developed and Emerging markets.
“Furthermore, the Group has identified several guardrails in order to achieve this growth with reduced risk and volatility,” it noted.
Continuing, the group noted that in April 2024, PZ Cussons announced plans to conduct a strategic review of its Africa operations.
“As part of the review, the Group announced the sale of its 50% equity interest in PZ Wilmar Limited, its non-core edible oils business in Nigeria, to Wilmar International Limited (“Wilmar”), its Joint Venture partner for a total consideration of $70 million. The transaction is expected to be completed shortly.
“The Group received significant levels of interest from a number of parties regarding the wider Africa portfolio. The Board has, however, concluded that the offers received did not reflect the inherent value of the business and that the greatest value for shareholders will be created by retaining the business and building a Group portfolio balanced between its Developed markets of UK and ANZ and its Emerging markets of Indonesia and Nigeria”.
The Group disclosed that it is now setting out plans to build a winning portfolio of locally-loved brands, building on the improved momentum achieved in recent years.
It noted that 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 strong, double-digit revenue growth in our Africa business in the first half of the financial year”.
The Board expressed confidence 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. ”
