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Makers of Huggies to stop production in Nigeria 3 years after $100m investment

Makers of Huggies to stop production in Nigeria 3 years after $100m investment

Kimberly Clark, the manufacturer of Huggies diapers, and other sanitary pads, is set to announce a shutdown of its Ikorodu production facility three years after investing $100 million in Nigeria.

According to sources, the plant has been producing below capacity since late 2023 into 2024 due to the harsh economic environment within the country.

BusinessDay reached out to the company via email on Thursday but the company is yet to respond.

The source stated that the company since late 2022 has battled with high cost of energy and raw materials, along with reduced demand due to the prevailing economic situation.

“This has resulted in downsizing and reduced production time from every day of the week to just Mondays to Thursdays,” the source said.

In 2022, the company inaugurated a $100 million production facility in Ikorodu, Lagos State to restart operations after a similar closure of operations in 2019 following a strategic review of its business.

Kimberly-Clark began operations in Nigeria in 2012 but stopped due to unfavorable economic conditions after five years in 2019 to later restart in 2021.

The company produces Huggies diapers, sanitary pads, Kotex and other hygiene and personal care products. KC is a listed multinational on the New York Stock Exchange with the majority of its shares held by institutional investors like Blackrock Inc., Vanguard Group, Morgan Stanley etc.

The planned closure of operations of Kimberly-Clark from Nigeria is a result of challenges which include high production costs, currency depreciation affecting the import of raw materials, and weak purchasing power of the populace similar to other manufacturers who have exited the country in the past few years.

The high production cost stems from the firm’s increased raw material cost since it is import-based, the source stated.

Kimberly-Clark Corporation is an American multinational personal care corporation that produces mostly paper-based consumer products. The company manufactures sanitary paper products and surgical and medical instruments.