Procter & Gamble (P&G) may be shutting down its production plant situated in Agbara Industrial Estate, Southwest, Nigeria, exactly one year after launching the $300 million factory, Premium Times reports.
P&G, one of the leading FMCG (fast-moving consumer goods) manufacturers, commissioned the production line in June 2017 with Nigeria’s Vice President Yemi Osinbajo and Governor Ibikunle Amosun of Ogun State in attendance.
Why P&G is shutting down the Agbara plant
An insider familiar with the development disclosed to Premium Times that “the company is battling with the challenge posed by government policies that regulate the importation of raw materials for its production.”
Another source said the cost of importing raw materials was becoming unbearable for the company, which has refused to involve in shady deals in order to cheat the system and ease importation.
“It is so expensive to import these raw materials which are not produced in Nigeria. Other companies take the shortcut by manoeuvring the system, but we cannot,” a top official of the firm told the online newspaper.
Another source said the factor responsible for the shutdown was the unhealthy competition being faced by the company.
“Our competitors invested much less in their factory, can manoeuvre their way in the system, and thus produce and sell for much less. We cannot do that. Our investment in Agbara is arguably the largest single investment by a non-oil firm in Nigeria. But we just have to shut it. The loss is much,” the source said.
The report about the shut down is expected to affect closed to 120 employees who are gradually being laid off in preparation for the eventual closedown. An anonymous source said “about 30 staff will be left who may either be outsourced or deployed” to the Ibadan plant.