The Digest:
Consumer goods group PZ Cussons has reversed its decision to exit the African market, opting instead to retain and expand its operations in Nigeria, Kenya, and Ghana. The board concluded that potential sale offers undervalued the business and that greater shareholder value lies in capitalizing on Africa's demographic and economic potential.
Key Points:
- The decision follows a strategic review initiated in April 2024, which initially included the sale of its 50% stake in PZ Wilmar for $70 million.
- The company cited Nigeria's direct store reach has more than doubled since FY22 as a key driver of recent growth.
- Favorable recent economic and currency trends in Nigeria contributed to double-digit revenue growth in Africa during the first half of the financial year.
- PZ Cussons plans to expand into men’s grooming and beauty categories using established brands like Imperial Leather and Premier.
- The strategy leverages Africa's forecasted population growth of over 900 million in the next 25 years, with Nigeria alone adding an estimated 100 million people.
- The company noted its competitive advantage as several other multinationals have exited the Nigerian market in recent years.
- Operational guardrails have been established to mitigate risks from currency volatility and market disruption in Nigeria.
Sources: PZ Cussons, Channels TV
