Kimberly-Clark, the producer and manufacturer of the popular diaper brand ‘Huggies’ and various sanitary pads, is set to announce the closure of its production facility in Ikorodu, Nigeria, after several years of investing $100 million in the country.
It is public that since Kimberly-Clark has been struggling and operating below capacity since late 2023 due to Nigeria’s challenging economic conditions.
This marks the second closure for the company in Nigeria; it had previously shut down operations in 2019 following a business review but resumed in 2022 with the launch of the $100 million facility in Ikorodu, Lagos State.
High running costs, including expenses for raw materials, energy, and maintenance, as significant challenges behind this potential closure. . Additionally, there has been a reduced demand for their products due to the current economic issues.
The management has ordered downsizing and shortened production days, now limited to just Mondays and Tuesdays.
In his own words, Our first two years were fantastic in terms of sales growth and market shares within the diaper industry. Fast forward into late 2022 and 2023 were really bad years for the company due to the economic situation.”
“Running costs are extremely high. Our fixed spending on a monthly basis is above N500 million and we spent about N100 million on just gas consumption for powering the gas engine aside maintenance. The company has two assets and for last year, these assets didn’t run for like 90 days in 365 days.”
“Earlier this year, the coy had to downsize to 2 shifts from 4 shifts. We run 24 hrs and 7 days and 365 days before but currently we don’t run on Friday, Saturday and Sunday anymore because of the economic situation. There is already an embargo on external recruitment. The company is looking for ways to reduce cost since it is not making a profit.”
