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Another manufacturer Kimberly-Clark to end production in Nigeria

Published

7 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, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

2 days ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

2 days ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.