PZ Cussons has decided to retain its Africa business, citing improving economic indicators in Nigeria and strong population growth projections across the continent.
The decision was disclosed in a statement published on its website on Thursday following the conclusion of a review of its Africa operations.
The report by Punch newspaper on Thursday said that PZ Cussons had announced in April 2024 that it would conduct a strategic review of its African business.
In its latest statement, the company confirmed that it would keep its Africa operations and outlined ambitious growth plans as part of a broader group strategy aimed at balancing its portfolio between developed and emerging markets.
“As part of the review, the Group announced the sale of its 50 per cent equity interest in PZ Wilmar Limited, its non-core edible oils business in Nigeria, to Wilmar International Limited, its joint venture partner, for a total consideration of $70m. The Group received significant levels of interest from a number of parties regarding the wider Africa portfolio.
“The Board has, however, concluded that the greatest value for shareholders will be created by retaining the business and building a Group portfolio balanced between its developed markets of the United Kingdom and Australia/New Zealand and its emerging markets of Indonesia and Nigeria,” the statement said.
Explaining its rationale, PZ Cussons highlighted Africa’s and Nigeria’s projected population surge as a key factor.
The strategy is based on the significant long-term opportunity in Africa, where the population is forecast to grow by over 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 double-digit revenue growth in our Africa business in the first half of the financial year.
“The Board is confident 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 in a competitive landscape that has seen a number of multinationals exit the market in recent years. Nearly 80 per cent of Nigeria’s revenue is generated from brands holding #1 or #2 positions in their categories,” the statement added.
PZ Cussons added that it is now working to build a winning portfolio of locally loved brands, building on the improved momentum achieved in recent years.
GIK/APA