Claim: Facebook user, Iffy Chika on the 30th of January 2019, stated: “PZ is pulling out of Nigeria after 120 years. APC and Buhari killing this country, 4,520 jobs going. Osinbajo why?”
Evidence: Through a press release, PZ denies rumours that it is leaving Nigeria
Because PZ Cusson, an international, entrepreneurial conglomerate dealing in household consumer goods has a long history of association with Nigeria, social media platforms were awash with the news that the firm would be leaving Nigeria. Many people latched onto the news and were giving reasons why they believe PZ was taking such an unprecedented action. At the time Dubawa got wind of the claim, the Facebook post had been shared 501 times, liked 95 likes and 56 comments were recorded by people who seized the opportunity to lambast President Muhammadu Buhari and his administration.
VERIFYING THE CLAIM
This claim was made after Leadership newspaper published a report on the same day titled: “Nigeria PZ Cussons to Withdraw amid Tough Conditions”.
The report by Leadership newspaper was based on the half-year report published on the London Stock Exchange website on January 29. The Report stated that a weak Naira and forex regime was tough on its Nigerian businesses.
Chairman of PZ Group Caroline Silver stated in a Guardian Newspaper report on the 31st of January 2019 that “The negative currency impact was caused by both the move to use the NIFEX exchange rate rather than the CBN rate to translate Nigerian results from 1 June 2018 (as indicated in the Group’s full-year results to 31 May 2018), as well as an underlying weakening of the Naira during the period.
“The macroeconomic conditions in Nigeria remain extremely challenging and continue to have a significant negative impact on overall group performance.
“Reflecting this, we now expect Group adjusted profit before tax for the year to be towards £70 million.”
She also added that the company will, “limit exposure to volatility in Nigeria, with more information to be provided in due course,” while emphasising that PZ will maintain “strong market shares” in the areas it is doing well. “Whilst these conditions prevail, we will maintain our strong market shares in key product categories in Nigeria until growth returns to the market.“
After the false news gained significant momentum, the Chief Executive Officer of PZ Cussons Nigeria PLC, Christos Giannopoulos, sent out a press release as published in the Nation newspaper titled: PZ CUSSONS IS NOT LEAVING NIGERIA.
In the press release, he stated: ” It has come to our notice that a headline is circulating within social media claiming that ‘PZ Cussons is leaving Nigeria as a result of the tough condition’. This headline is totally false and misleading and creates the impression that PZ has decided to leave Nigeria.
“The trading statement issued to the London Stock Exchange was clear on our continued operations in Nigeria. Whilst these conditions prevail, we will maintain our strong market shares in key product categories in Nigeria until growth returns to the market. This year 2019, we are celebrating 120 years of PZ Cussons making life better and adding value to Nigerians. In our 120 years of doing business in Nigeria, we have faced different conditions and come out stronger at the end.”
“We confirm to our consumers, customers, employees, business partners and stakeholders that Nigeria still remains a market of interest for us and have made no plans to leave Nigeria. Our factories in Ikorodu, Aba and all our distribution centres around the country are operational and will continue to be.”
This press release leads to the conclusion that the claim is FALSE. But another question persists: Is PZ’s economic downtown only a result of Buhari’s administration?
DID PZ’S ECONOMIC DOWNTURN BEGIN WITH BUHARI?
For the sake of clarity, Nigeria is PZ Cussons largest and most diverse single market.
PZ Nigeria’s business is broadly classified into two segments – ‘Branded Consumer Goods’ and ‘Durable Electrical Appliances’. The Branded Consumer Goods segment comprises products like Morning Fresh, Imperial Leather, Cussons Baby, Premier soap and Mamador Cooking Oil. PZ also sells electronics goods under the brand names -Haier Thermocool and TEC.
PZ’s Consumer Goods business has performed relatively well over the years, maintaining market share, revenue and profitability.
A comparison of the company’s financial performance in 2014 and 2018 would reveal a 21% growth in revenue from the Consumer Goods business from N48 billion to N58 billion.
Operating profits from the business segment also improved significantly from N3.3 billion to N5.4 billion during the same period. This performance is similar to the numbers reported by peers – Nestle and Unilever. Recognizing the opportunities in Nigeria’s consumer market, the company last year announced plans to increase its investments in the agricultural sector, specifically oil palm.
The same can, however, not be said of PZ’s Electronics business segment which has continued to struggle with stiff competition from more popular brands like LG and Samsung. Highlighting the struggles of the Electronics business, revenue declined between 2014 and 2018 by N2 billion to N22 billion, same as operating profits which was slightly lower from N3 billion to N2.8 billion. Management’s strategy of changing its supply chain and resizing its electronic products – fridges, air conditioners, etc to suit consumer wallet has not yielded much benefits.
It is entirely false to claim that PZ is leaving Nigeria. And although some of the policies of this government have caused quite a few hiccups to some companies, it is totally inaccurate to put the blame of PZ’s unflattering economic fortunes solely on this administration. When a new government comes in, naturally policies change; what a company does is to respond to the new ecosystem by re-inventing itself.