Nigeria: Price hike, Job losses loom as Huggies plans exit over cost of operation

Another round of massive job losses and price hikes looms as Kimberly-Clark, the producer and manufacturer of the popular diaper brand ‘Huggies’ and various sanitary pads, is set to announce the closure of its production facility in Ikorodu, Nigeria, after several years of investing $100 million in the country.

An inside source who preferred anonymity told Nairametrics that Kimberly-Clark has been struggling and operating below capacity since late 2023 due to Nigeria’s challenging economic conditions.

This marks the second closure for the company in Nigeria; it had previously shut down operations in 2019 following a business review but resumed in 2022 with the launch of the $100 million facility in Ikorodu, Lagos State.

“Running cost is extremely on the high side. Our fixed spend every month is above N500 million and we spent about N100 million on just gas consumption for powering the gas engine aside from 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 company 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 source said.

The development comes as more than 15 multinational companies including Procter & Gamble, GlaxoSmithKline (GSK) and others announced an exit from Nigeria between last year and May this year.

Experts have raised concerns over the continued exit of multinational companies from Nigeria.

Consequently, the Nigeria Employers’ Consultative Association said 2,000 jobs have been lost to the exit of 15 multinational companies in Nigeria.