PZ retains African operations, buoyed by Nigeria’s prospects

Consumer goods company PZ Cussons has decided to retain its African business on the back of a recovery in Nigeria’s economic indices and projected population growth.

This was disclosed in a statement shared on its website on Thursday following the conclusion of a review of its business on the African continent.

In 2024, PZ Cussons announced that it would conduct a strategic review of its Africa operations. The Group announced its intention to divest approximately £30m of surplus assets, of which the majority are located in Africa. The group identified c.£7m of further non-core assets in Africa, proceeds from which are expected to be realised during the current financial year. In addition, the Group sees scope for further opportunities for property optimisation over time.

More broadly, the Group will continue to take steps to simplify its business as it looks to drive its winning portfolio of locally loved brands, with a focus on its core categories of Hygiene, Baby and Beauty.

In the statement, PZ said that it would be retaining its Africa business, and it also announced ambitious growth plans for the business as part of a wider group strategy built upon a portfolio balanced between Developed and Emerging markets.

“As part of the review, the Group announced the sale of its 50 per cent equity interest in PZ Wilmar Limited, its non-core edible oils business in Nigeria, to Wilmar International Limited, its Joint Venture partner for a total consideration of $70m. The Group received significant levels of interest from a number of parties regarding the wider Africa portfolio.

“The Board has, however, concluded that the greatest value for shareholders will be created by retaining the business and building a Group portfolio balanced between its Developed markets of the United Kingdom and Australia/New Zealand and its Emerging markets of Indonesia and Nigeria,” read part of the statement.

Sharing the rationale for the board decision, PZ Cussons said Nigeria and Africa’s projected population growth was a consideration.

“The strategy is based on the significant long-term opportunity in Africa, where the population is forecast to grow by more than 900 million over the next 25 years, representing over half of total global population growth. Nigeria’s population alone is forecast to increase by over 100 million, further benefiting from urbanisation and rapidly growing middle classes. Recent economic and currency trends have been more favourable, supporting double-digit revenue growth in our Africa business in the first half of the financial year.

“The Board is confident that PZ Cussons is well placed to succeed through leveraging local insights and its brand heritage. The business will continue to benefit from its scale in manufacturing and route-to-market expertise, particularly against a competitive landscape which has seen several multinationals exit the market in recent years. Nearly 80 per cent of Nigeria’s revenue is generated from brands holding the #1 or #2 positions in their categories.”

The PZ Cussons Group added that it is now setting out plans to build a winning portfolio of locally loved brands, building on the improved momentum achieved in recent years.

The three key pillars through which the company plans to deliver on its plans include “Core growth: growing the core business in Nigeria, Kenya and Ghana through consistently delivering best-in-class fundamentals of brand-building, distribution expansion, Revenue Growth Management, in-store execution and use of digital. These factors, including the fact that the Nigerian business has, since FY22, more than doubled the number of stores which it serves directly, have been major contributors to the business’s growth in recent years;

“Category expansion: Expansion into new category adjacencies, including a focus on Men’s Grooming and Beauty, with the existing brands of Venus, Imperial Leather and Premier. 3. Pan-Africa growth: expansion in other African markets which will be served from the existing footprint in Nigeria and Kenya.”

Given the historic volatility of the Nigerian business and the inherent risk associated with operating in the market, the Group has put in place a set of operational and financial measures to reduce risk associated with any future currency volatility or business disruption. These largely relate to foreign exchange management and to the generation and use of cash. Adherence to these guardrails will be reviewed by the Group’s Board at all of its regular meetings.

Commenting on the U-turn, Chief Executive Officer of PZ Cussons, Jonathan Myers, said, “Since embarking on the strategic review of Africa, we have identified or agreed to the sale of non-core or surplus assets totalling over £70m. This, combined with continued cash generation of the Group, has significantly strengthened our balance sheet. After a thorough review of the remainder of the Africa business and careful evaluation of the offers received, the Board believes it is in the best interest of our stakeholders to retain the business.”

PZ Cussons’ Africa business generated £141m of revenue and £16m of adjusted operating profit in FY25, representing 27 per cent and 30 per cent of the Group, respectively. Following the sale of its 50 per cent stake in PZ Wilmar, the Group’s Africa business comprises Family Care and Electricals businesses in Nigeria and Family Care businesses in Ghana and Kenya. The Group holds a 73.3 per cent stake in PZ Cussons Nigeria plc.

PZ Cussons is a listed consumer goods business headquartered in Manchester, UK.