With Unilever’s €150 million investments in Nigeria in the last three years, the potentials of the Fast-Moving Consumer Goods (FMCG) segment is no longer in doubt. FMCG or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, over-the-counter drugs, toys, processed foods and many other consumables, according to Wikipedia.
Last Friday, Paul Polman, global CEO, Unilever, revealed that a total of investments worth €150 million were made in the country by his 91-year-old firm, formerly known as Lever Brothers.
According to him, this is a demonstration of the firm’s confidence in the country’s economic prospects and an indication that it would continue to contribute to the economy by creating jobs and wealth.
Unilever is the foremost manufacturer of major products that fall within the category of FMCG. Its high-quality products include Close-Up, Omo detergent, Lux soap, Vaseline, Lipton, Pears, Royco, Lifebuoy, Knorr, Blueband, among others.
In the recently released series by the Nigerian Bureau of Statistics (NBS), it was revealed the manufacturing sector now contributes 9 percent to Nigeria’s gross domestic product (GDP). Half of the now $46 billion contribution of the sector is made by FMCG, notably food, beverages and tobacco, Real Sector Watch has found.
The rising growth in Nigeria’s middle-class with strong purchasing power, spike in disposable income, population of 170 million and high number of young people, among others, have provided a solid basis for the growth of the FMCG, analysts say.
“We believe Nigeria’s large population of upwardly mobile consumers, particularly in the South West, coupled with investments in power, implies the strong growth of manufacturers, including food producers and breweries, is sustainable,” said Renaissance Capital (RenCap) in its recent report, while explaining the FMCG contribution to the manufacturing sector.
Apart from Unilever, Dangote Group, one of the most diversified conglomerates in Africa, is expanding operations in its sugar, flour, salt, packaging, food and beverages, among others. Procter & Gamble (P&G) recently announced investment of $300 million in an ultra-modern plant at Agbara, Ogun State, making it the largest non-oil investment in the country by a United States-based firm. The company manufactures FMCG such as diapers, detergents and inhalers for the treatment of common colds, among others.
“The size of the plant at Agbara is 400,000 square metres, and we are expanding by bringing in businesses that will be locally produced,” said Yannis Skoufalos, global product supply officer, P&G, Cincinnati, in a recent interview with Real Sector Watch.
The expanding consumer class for FMCG may have informed McKinsey Global Institute’s (MGI) projection that consumption could more than triple, rising from $388 billion a year today to $1.4 trillion a year in 2030, an annual increase of about 8 percent. The large consuming class has the potential to reach 160 million by 2030, more than the current populations of France and Germany combined, says the consulting firm.
Odinaka Anudu
