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Another manufacturer Kimberly-Clark to end production in Nigeria

Published

6 months ago

May 31, 2024

Two years after investing $100 million in Nigeria, Kimberley Clark, a manufacturer of sanitary pads and diapers, will soon announce the impending closure of its Ikorodu production site.

Sources within the company revealed that the factory had been operating below capacity from late 2023 into 2024 due to the challenging national economic climate. The company reopened operations in 2019 after a similar shutdown due to a strategic assessment of its business, and in 2022 it opened a $100 million production plant in Ikorodu, Lagos state.

After five years, in 2019, Kimberly-Clark halted operations in Nigeria owing to unfavourable economic conditions. The company plans to resume operations in 2021.

The company makes Kotex, Huggies diapers, sanitary pads, and other personal care and hygiene goods. The bulk of the shares in KC, a worldwide company listed on the New York Stock Exchange, are owned by institutional investors, including Morgan Stanley, Blackrock Inc., and Vanguard Group.

The insider, who wished to remain anonymous, claimed that the company has been struggling since late 2022 with rising energy and raw material costs as well as decreased client demand as a result of the current economic climate. As a result, there have been layoffs and a reduction in production hours from Monday through Thursday.

Aside from maintenance expenses, the company now spends about N100 million a month on power generation, and its fixed monthly expenditure on operations has increased to over N500 million.

He said, “Our first two years were fantastic in terms of sales growth and market shares within the diaper industry. Fast forward into late 2022 and 2023 was really bad years for the coy due to economic situation.”

“Running cost is extremely on the high side. Our fixed spent every month is above N500 million and we spent about N100 million on just gas consumption for powering the gas engine aside maintenance. The company has two assets and for last year, these assets didn’t run for like 90 days in 365 days.”

“Earlier this year, the coy had to downsize to 2 shifts from 4 shifts. We run 24hrs and 7days and 365 days before but currently we don’t run on Friday, Saturday and Sunday anymore because of the economic situation. There is already an embargo on external recruitment. The company is looking for ways to reduce cost since it is not making a profit.”

The insider also mentioned that because the industry is import-dependent, the high manufacturing costs are a result of the rising cost of raw materials. The company predicted that when it started operating roughly three years ago, it would need to set aside some funds for operations for five years, after which Nigerian revenue would be able to support the business.

Related Topics:Featured Kimberly-Clark Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

36 minutes ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.