PZ Cussons has announced that it will no longer exit its Africa operations, unveiling fresh growth plans anchored on improving business performance in Nigeria, Kenya, and Ghana.
In a statement released yesterday, the company said Nigeria remains a major driver of its recent progress, noting that the number of retail stores it directly serves in the country has more than doubled since the 2022 financial year.
This expansion, it said, has contributed significantly to its strong growth trajectory.
The update follows PZ Cussons’ April 2024 decision to begin a strategic review of its Africa business, which included selling its 50% stake in PZ Wilmar Limited — its non-core edible oils subsidiary — to its joint venture partner, Wilmar International, for $70 million.
However, after evaluating offers received for the rest of its African assets, the company’s board concluded that they did not reflect the true value of the business.
The firm says shareholders stand to gain more from retaining the Africa operations and building a balanced global portfolio spanning the UK, Australia-New Zealand, Indonesia, and Nigeria.
PZ Cussons also revealed plans to venture into adjacent categories, particularly men’s grooming and beauty, leveraging popular brands such as Venus, Imperial Leather, and Premier.
The company is also exploring additional expansion opportunities across Africa, supported by its established hubs in Nigeria and Kenya.
According to the company, Africa presents a long-term growth opportunity, with the continent’s population expected to increase by over 900 million in the next 25 years.
Nigeria alone is projected to add more than 100 million people, driven by rapid urbanisation and a growing middle class.
More stable economic and currency conditions in recent months have also boosted its performance, resulting in double-digit revenue growth in the first half of the current financial year.
Despite its optimism, PZ Cussons acknowledged the historic volatility of doing business in Nigeria.
To safeguard its operations, the company said it has implemented measures to manage foreign exchange exposure and strengthen cash generation, with regular oversight from its board.
As part of ongoing portfolio optimisation, PZ Cussons confirmed it is on track to divest £30 million worth of surplus assets, mostly in Africa.
An additional £7 million worth of non-core assets is expected to be sold within the current financial year, alongside further opportunities for property optimisation.
Chief Executive Officer Jonathan Myers stated that the company has already identified or agreed sales of more than £70 million in non-core assets since beginning the strategic review.
With a stronger balance sheet and improved market conditions, he said retaining the Africa business is the best long-term strategy.
Myers added that Africa remains a market of “great opportunity” and that the company’s brand strength, heritage, and operational capacity position it for long-term success.
He reaffirmed that nearly 80% of the company’s revenue in Nigeria comes from brands that hold number one or number two positions in their categories.
With new guardrails in place to reduce operational risk and manage volatility, PZ Cussons expects its Africa operations to play a significant role in driving overall group revenue in the years ahead.