You mentioned future investments in Nigeria, specifically what are these investments?
We have started construction of our new state of the art diaper plant in Agbara, Ogun state. This new plant represents a significant Greenfield investment by P&G in Nigeria. We aim to start production next year. This plant is on over 40 hectares of land which is available for expansion and future investment plans. - We will install Pampers diapers state of the art facility with the latest technology n this site. This investment lends support to many aspects of the President’s Transformation Agenda and will lead to creation of jobs, SME’s and develop human capital in the country
Why are you investing more in Nigeria?
Firstly - Nigeria has a very strong, dynamic and growing population of over 167 million people with over 40% less than 15 years old. By 2050, Nigeria is projected to have the 3rd largest population in the world. This represents a rapidly growing number of consumers that we can serve.
Secondly - Nigeria is among the fastest growing markets in Africa – Sub-Saharan Africa is among the fastest growing economies in the world. The IMF projects Sub-Saharan Africa's economic growth in 2010-2015 to be in the middle of the BRIC countries – faster than Brazil and Russia - the potential is huge.
Thirdly and very importantly - We believe in the future of Nigeria. For over 12 years now, Nigeria has proven to be a politically stable country and has grown to be the economic power house of West Africa.
With political and economic stability, Nigeria’s population is an enormous source of strength and potential wealth – this country is going to be a very big force in the world.
Will you bring in new line of products that will be produced in the plant?
The company is constantly reviewing the market for opportunities. P&G has 50 leadership brands that are among the world's best known household names, and that make up 90% of P&G sales and more than 90% of profit. 25 of these brands each generate more than $1B in sales each year, and our largest brand, Pampers, recently became a $10billion-dollar brand. In Nigeria today, we have only a fraction of this figure. There is a lot of opportunity to grow our business in Nigeria by serving more consumers. As we continue being in touch with our consumers, delighting them and understanding how we can better satisfy their needs, the insights we get would continue to inform our strategic choices to introduce new products and new innovations in our existing products.
Do you intend to throw open the company shares to Nigerians?
The way I look at it is that today anyone can trade in P&G stocks. You can buy P&G stocks because we are listed on the New York Stock Exchange and at this stage we are a global company and we have global shares. People have access to them and that is the position of the company.
What happens to the Ibadan plant? On the existing Ibadan plant, you already have a factory on Ibadan, when this new one is completed, do you intend to continue with the two or will you close one and concentrate your production in a new one?
We are continuing to invest in our plant in Ibadan and growing its capacity. We are increasing production capacity in our laundry plant located in Ibadan. There is no plan to close our Ibadan site.
Our second production site in Agbara will be a state-of-the-art Diaper manufacturing plant. We will have more productions lines there versus what we have today and will bring the latest technology. Agbara also offers us some logistic advantages with nearness to the ports, suppliers and key customers.
What is your expansion profile like?
Globally we have over 50 products which are globally available for the global market. Today in Nigeria, we don’t have the whole range yet but to give you a perspective, Pampers which is one of our brands is the first brand in P&G to cross the $10 billion mark. So it is our biggest brand. The biggest brand actually has the biggest opportunity in Africa so we are starting from there. But the site which we have created is a much bigger site. The land is much bigger. As we try to understand the consumer needs of Africa, trying to be close to what they need so we will be able to decide what we want to bring in. We have an aggressive plan and we want to make sure that the products are relevant to our consumers in Africa and that is what we are working on and we will talk to you as we get more details.
Why is the company focusing on this region now?
P&G‘s growth strategy inspired by our purpose, is to touch and improve more consumers’ lives, in more parts of the world more completely. What does this mean? We are improving more consumers’ lives by innovating and extending our brand portfolios vertically, up and down value tiers, we are improving lives more completely by innovating to improve our products and to expand our product lines into adjacent categories and we are improving more lives in more parts of the world by expanding geographically into new white spaces where we have not been competing. In keeping with this strategy, Africa and more specifically, Nigeria has become a focus area for P&G. Nigeria has a very strong, dynamic and growing population of now over 167 million people with over 40% less than 15 years old. By 2050, Nigeria is projected to have the 3rd largest population in the world. This represents a rapidly growing number of consumers and a wonderful opportunity to serve. The country has been politically stable for more than a decade now and the Government’s transformation agenda has all the elements to propel the country to the next level. Most importantly, P&G has highlighted Nigeria as one of its top 10 emerging markets priority countries for this reason.
Do you have any plan to branching out to other parts of Nigeria?
Our new investment site is located in Agbara Ogun state. We have capacity on this property for future expansion. We will also continue to expand the existing plant in Ibadan.
Are you going to down size or up size?
There are no plans to lay off people. On the contrary, with our investment project we will create thousands of incremental of jobs directly and indirectly from the new plant.
Despite the rather difficult operating environment, you have remained profitable, what is the secret?
Our operations are relentlessly focused on our growth strategy to touch and improve the lives of more consumers, in more parts of the world, more completely.
This simple purpose has enabled us to become one of the world’s leading consumer products companies – and will continue to guide us as we seek to improve consumers’ lives, now and for generations to come. We recognize the need to stay close to our consumers and we design our operations to meet their different needs. With our superior consumer understanding backed by our leading innovative brands, superior go to market approaches, insightful branding, comparable scale and the highly skilled P&G people in Nigeria; we are able to have a rapidly growing and vibrant business in Nigeria.
In maintaining our position as the leading FMCG Company, globally we are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines.”
One of the ways P&G is achieving these objectives is by prioritizing investments in our 10 biggest emerging countries. Nigeria has been identified as one of these top 10 emerging market in which we’re putting additional focus and investment to win for the future. Winning in Nigeria, the largest country on the continent, is critical to winning in Africa. We are pleased that our business here is expanding allowing the communities we live and work in to prosper.
What are your CSRs in Nigeria?
Our community programs are guided by our global corporate cause Live, Learn & Thrive (LLT), focused on development of children in need. P&G believes is creating and nourishing partnerships with external organizations that have the necessary expertise as well as scale. Some of our well known programs include our Always Care program provides Feminine Hygiene/Puberty Education Program to over 800,000 Nigerian girls every year and 50 education grants this year; the Pampers Baby Care hospital Program and Mobile Clinics, touches the lives of about 2 million young Nigerian mothers and their babies annually. In addition our Pampers/UNICEF program has provided over 7.5 million tetanus vaccines to mothers and their babies in Nigeria. “Building Futures" donated clothes, P&G products and provides learning facilities to orphanages across Nigeria.
P&G’s employee Volunteering program lets P&G people give back to the communities we live and work, and the Safe Water for Nigerian Children has provided over 30 million litres of safe drinking water in Nigeria.
Additionally P&G has supported people in emergencies and natural disasters In Nigeria, including the cholera epidemic in 2010, P&G worked with local non-profit organization and provided 480,000 liters of safe drinking water to rural dwellers in affected parts of Nigeria. Also for the 2011 floods in Ibadan, Nigeria, P&G provided essential hygiene products and other basic needs to the flood victims at the relief camps in Ibadan.
How much are you investing in the new plant?
We are investing hundreds of millions of dollars in the new manufacturing facility and are bringing in the latest product technology. The property P&G acquired in Agbara, on which the new plant would be built is a massive over 40 hectares. The area needed for the plant currently under construction just 16 hectares. This gives us room for even more expansion to accommodate increasing P&G manufacturing operations in the coming years. In addition to this, P&G would continue investing massively in distribution and marketing.
How do you intend to achieve your strategy of serving low income consumers?
P&G’s growth strategy, inspired by our purpose is to touch more consumers’ lives in more parts of the world more completely through our benefit-driven brands that improve everyday lives of our consumers. We’re committed to delivering superior consumer value – which is defined differently by different consumers. Our objective is to win across a broad spectrum of consumers by offering the right performance for the right price and our approach in serving developing markets starts with an in-depth understanding of local consumer needs and this is what informs our product portfolio in these markets. For example, in certain markets, to satisfy local consumer spending and usage habits, we may create smaller sizes of our current products while also still marketing larger sizes for those consumers with larger cash outlay to satisfy local consumer spending and usage habits. Or, we may create products that address the availability of certain resources, such as a dish soap that works effectively in cold water. Overall, our approach is to delight consumers and because deep consumer understanding is one of our major strengths, we are continually innovating to meet the needs of a wide range of consumers. This has led us to become the number 1 consumer products company in seventeen developing markets, including Russia, China and Mexico.
What is your stand on the removal of most import prohibition by the current Government?
P&G has always supported Free trade. We see import ban and removals as a positive sign for the consumers-they will have more choice, for the government and for the industry. It will certainly bring competition into the Market but importantly will push the local industry to modernize and become more competitive.
This is precisely why we are investing in Nigeria. The government can aid this by putting in place economic measures to encourage local manufacturers and help them to be more competitive. These could be for instance through reduction of customs duties on materials and equipments, low energy cost Duties & tax leave, consistent export grants, and infrastructural development.
Do you have any issues that you think the government should address to improve macro- economic environment?
The Government has taken some bold economic decisions. For instance, by allowing some importation the Government is opening up the market which is good for the consumer, for the Industry and the economy as a whole.
We recognize the good work the government is doing to make investments in the country more attractive. While we are investing billions of Naira in Nigeria, we still need the Nigerian government to improve the competitiveness of doing business in Nigeria. We we would want to see the government respond more by lowering material duties, reducing taxes to enable the products to be affordable to more people and by quickly resolving the energy and other infrastructural issues in the country. This would greatly help companies such as P&G who are manufacturing in Nigeria to have a rewarding business in the country and would further encourage local investment and the perception of Nigeria as a favorable production destination.
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