Unilever is a big player in the Nigeria’s fast moving consumer goods sector has announced its exit from the homecare and skin cleaning market. This resulted in the company stopping the production of Omo, Sunlight and other homecare products and will now channel its energy on the production of beauty, wellbeing, food and personal product.
It was stated in Unilever Nigeria, the local unit of British multinational consumer goods company Unilever Plc, unaudited interim financial statements for the year ended December 31, 2023, published on the Nigeria Exchange Limited (NGX) recently.
The announcement comes 10 months after the company announced changes to its operations which would affect its home care and skin cleansing products categories which include Omo, Sunlight, and Lux.
The two affected categories which form the crux of Unilever’s Home and Personal Care division accounted for the lion’s share of the company’s revenues and profit before tax (PBT) in the last two years.
As of 2021, the categories accounted for 56% (₦39.5 billion) of revenue and 56% (₦1.2 billion) of profit before tax PBT, and has percentage reduction in 2022, while it contributed 51.9% (₦45.9 billion) of revenue and 51.9% (₦4.1 billion) of PBT in 2022.
“These categories are margin dilutive, and the exit is part of the company’s aim to make its operation in Nigeria competitive and profitable,” the document added.
According to Unilever Nigeria, its homecare and skin-cleaning business which was a critical factor reduces the profit margin in its overall financial performance triggered a margin dilution.
It was stated in Unilever financial statement that the factory building will now be leased to a third party for 10 years, with annual rental payments.