Unilever Nigeria, the local unit of British multinational consumer goods company Unilever Plc revealed this in its unaudited interim financial statements for the year ended December 31, 2023, published on the Nigerian 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, while it contributed 51.9% (₦45.9 billion) of revenue and 51.9% (₦4.1 billion) of PBT in 2022.
Most of the time, the Nigerian FMCG sector has a characteristically thin profit margin due to the very high competition which leads to a sensitive pricing system.
“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-cleansing businesses triggered a margin dilution and was a critical factor which reduced the profit margin in its overall financial performance.
The company’s statement further said the factory buildings will now be leased to a third party for 10 years, with annual rental payments.
With the company’s exit from the homecare and skin-cleansing markets, Unilever will now concentrate on the foods, beauty and wellbeing, and personal care product categories.
