Economic Woes Force Kimberly-Clark to Shut Down Nigerian Plant

Kimberly-Clark, a multinational consumer goods corporation, is about to shut down its production facility in Ikorodu, Nigeria, due to persistent economic challenges.

Reports indicated that despite investing $100 million in the facility just two years ago, Kimberly-Clark has been struggling to maintain operations amidst high energy costs, expensive raw materials, and dwindling customer demand.

The impending closure is a reflection of the broader industry challenges, echoing the exits of Procter & Gamble and strategic reviews by PZ Cussons, which have impacted Nigeria’s efforts to attract foreign direct investment.

Checks revealed that Kimberly-Clark, which manufactures diapers and sanitary pads, has been producing below capacity since late 2023 due to the harsh economic environment in Nigeria.

The Company had initially invested $100 million in the Ikorodu facility in 2022 to restart operations after a previous closure in 2019.

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However, it has been reportedly battling high energy costs, raw material expenses, and reduced customer demand, leading to downsizing and reduced production time.

Currently, the company spends around N100 million monthly on power generation, aside from maintenance costs, and its monthly fixed spend on operations has risen to over N500 million.

The closure of the Ikorodu facility will mark the second time Kimberly-Clark has ceased operations in Nigeria, having previously stopped production in 2019 due to unfavourable economic conditions.

Kimberly-Clark, listed on the New York Stock Exchange, was a notable player in the global consumer goods market, with majority shares held by institutional investors like Blackrock Inc.