Two years after investing $100 million in Nigeria, Kimberley Clark, a manufacturer of sanitary pads and diapers, is about to announce the impending closure of its Ikorodu production site.
The facility has reportedly been generating below capacity from late 2023 into 2024 as a result of the challenging national economic climate, according to people within the corporation who spoke with reporters about this.
Remember that Kimberly-Clark started operations in Nigeria in 2012, halted operations in 2019 owing to adverse economic conditions, and then resumed in 2021?
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The company makes Kotex, Huggies diapers, sanitary pads, and other personal care and hygiene goods. The bulk of the shares in KC, a worldwide company listed on the New York Stock Exchange, are owned by institutional investors, including Blackrock Inc., Vanguard Group, Morgan Stanley etc.
The company reopened operations in 2022 with the opening of a $100 million production facility in Ikorodu, Lagos state, following a similar shutdown in 2019 as a result of a strategic assessment of its operations.
However, the source, who wished to remain anonymous, said that since late 2022, the business has struggled with rising energy and raw material costs as well as decreased client demand as a result of the current economic climate.
According to the source, “Our first two years were fantastic in terms of sales growth and market shares within the diaper industry. Fast forward into late 2022 and 2023 was really bad years for the coy due to economic situation.
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“Running cost is extremely on the high side. Our fixed spent on a monthly basis is above N500 million and we spent about N100 million on just gas consumption for powering the gas engine aside 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 coy 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.
“here 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 revealed.
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