Kimberly-Clark, the manufacturer of Huggies diapers and sanitary pads, is set to announce the shutdown of its Ikorodu production facility in Nigeria.
Gatekeepers News reports that This comes just three years after investing $100 million in the country. According to reports, sources within the company revealed that the plant has been producing below capacity since late 2023 due to the harsh economic environment.
The company began operations in Nigeria in 2012 but stopped in 2019 due to unfavourable economic conditions. It restarted operations in 2021, but has since battled with high energy costs, raw materials, and reduced demand from customers. This has resulted in downsizing and reduced production time.
According to a source, “Our first two years were fantastic in terms of sales growth and market shares within the diaper industry. But late 2022 and 2023 were really bad years for the company due to the economic situation.”
The source added, “Running costs are extremely high. Our fixed spend on a monthly basis is above N500 million, and we spend about N100 million on gas consumption for powering the gas engine aside from maintenance.”
The planned closure of Kimberly-Clark’s operations in Nigeria is similar to other manufacturers who have exited the country in recent years, citing high production costs, currency depreciation, and weak purchasing power.
The baby diaper industry in Nigeria is estimated at $920 million, with a CAGR of 11% between 2024 and 2028. However, it is a highly competitive industry with about 15 brands competing for market share.
