PZ Cussons has announced its decision to retain its Africa business, citing growth in its core operations in Nigeria, Kenya, and Ghana. The company had previously considered exiting the African market but has now set out ambitious plans to expand its presence in the region.
The decision to retain the Africa business comes after a strategic review, which included the sale of its 50% equity interest in PZ Wilmar Limited, a non-core edible oils business in Nigeria, to Wilmar International Limited for $70 million. However, the board concluded that the offers received for the remaining Africa business did not reflect its inherent value and that retaining it would create the greatest value for shareholders.
PZ Cussons plans to expand into new categories, including men’s grooming and beauty, leveraging its existing brands such as Venus, Imperial Leather, and Premier. The company is also considering expansion into other African markets, which will be served from its existing footprint in Nigeria and Kenya. The strategy is based on the significant long-term opportunity in Africa, where the population is forecast to grow by over 900 million over the next 25 years.
The company’s Africa business has seen strong growth, with double-digit revenue increases in the first half of the financial year, driven by favorable economic and currency trends. PZ Cussons is confident that it is well-placed to succeed in the African market, leveraging its local insights, brand heritage, and scale in manufacturing and route-to-market expertise.
To mitigate risks associated with operating in the Nigerian market, the company has put in place operational and financial measures, including foreign exchange management and cash generation. The board will review adherence to these measures at regular meetings.
As part of its strategic review, PZ Cussons has identified £7 million of non-core assets in Africa, which are expected to be sold during the current financial year. The company will continue to simplify its business, focusing on its core categories of hygiene, baby, and beauty.
Chief Executive Officer Jonathan Myers commented that the company has identified or agreed to sell non-core or surplus assets totaling over £70 million, significantly strengthening its balance sheet. The board believes that retaining the Africa business is in the best interest of stakeholders, given the market’s great opportunity and the company’s deep heritage, strong brands, and operational capabilities. With plans in place to reduce risk and manage volatility, PZ Cussons is confident that its Africa business is set up for success and will be a significant contributor to overall group revenue growth.