Unilever Nigeria recently announced its exit from the home care and skin cleansing markets in Nigeria to find a more sustainable and profitable business model.
This information was made known by Unilever Nigeria’s
Secretary, Abidemi Ademola, who made the revelation in a corporate notice to
the Nigerian Exchange Limited and signed.
Unilever claimed that by altering its business strategy, it
would be able to expand more quickly and better serve the interests of
customers, shareholders, and staff.
The company also stated that it anticipated that its
withdrawal from these two categories over 2023 will lead to an overall increase
in profitability, business growth, and sustainability.
The statement released reads in part, “this will involve
repurposing the portfolio by exiting the home care and skin cleansing
categories to concentrate on higher growth opportunities.
Strengthening business operations with measures to digitize
and simplify processes; and focusing more on business continuity measures that
reduce exposure to devaluation and currency liquidity in our business model.”
Unilever Nigeria’s home care and skin cleansing brand has a
valuation of N50 billion, however, the company relayed that its profitability in
Nigeria isn’t being maximized enough, as it looks to explore other markets.
Nigeria's beauty and personal care industry is anticipated
to generate $7.87 billion in sales in 2023, according to Statista, a German
company that does market research. Through 2027, this market sector is
anticipated to rise by 16% annually.
Unilever Nigeria Plc has two business segments, which are
food products, and home and personal care. "In 2022, the firm realized
N88.72 billion as revenue out of which the food products segment generated
N42.6 billion or 48 percent while the home and personal care generated N46.09
billion or 52 percent of the company’s revenue. Almost all its revenue was
generated in Nigeria.
The 2022 company-wide revenue was 25.8 percent higher than
the N70.52 billion made in 2021. And by generating N31.01 billion in 2021, the
food products segments accounted for 44 percent of Unilever Nigeria’s revenue
while the home and personal care generated N39.51 billion, representing 56
percent of the company’s total revenue.
Profit before tax in 2022 was N9.86 billion, divided into
N4.74 billion from food products, while home and personal care accounted for
N5.12 billion. In 2021, food products’ profit before tax was N906.26 million
while that of home and personal care amounted to N1.15 billion."