Consumer goods giant Procter & Gamble (P&G) is set to exit Nairobi in June 2024, citing a combination of challenges including high operating costs, currency fluctuations, and declining sales.
The move will impact approximately 30 direct workers and contractors, and marks a significant shift in the East African market for brands like Pampers,Always, Ariel, Downy, Gillette, and Oral B.
The American company manufactures popular household consumer products like Aerial detergent, Always sanitary pads, Gillette shaving kits and pampers diapers.
Its other products include Old Spice roll on, Oral B dental health care kits, Salvo dishwasher and Dawny fabric softeners.
P&G has already informed employees, contractors, and government officials of its decision.
This follows a period of cost-cutting measures implemented over the past few years, which saw the company eliminate roughly 30-40 roles in response to plummeting sales and rising production costs.
Going forward, P&G will transition to a distributor-based importation model.
This will eliminate the need for local ground support, a factor that previously contributed to the company’s success in the fast-moving consumer goods (FMCG) market.
While P&G has not officially confirmed the exit, CFO Andre Schulten previously acknowledged difficulties extracting value from emerging markets like Kenya.
This statement, coupled with the company’s withdrawal from Nigeria and Argentina, paints a clear picture of P&G’s strategic shift away from certain emerging markets.
The impact of this decision on the Kenyan economy and consumers remains to be seen, it adds to a growing list of foreign manufacturing companies that have found it difficult to operate in Kenya.
Other manufacturers that have closed down production lines in the country are Reckitt Benckiser, Johnson & Johnson, Bridgestone, Unilever and Colgate Palmolive — with most of them either leaving for Egypt or South Africa.
Experts believe that the government has done little to reduce the country’s appetite for cheap imports from Asia.
