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.
An anonymous source within the company informed Nairametrics that 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.
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The source cited high running costs, including expenses for raw materials, energy, and maintenance, as significant challenges. Additionally, there has been a reduced demand for their products due to the current economic issues.
These factors have led to downsizing and a reduction in production days, now limited to just Mondays and Tuesdays.
He disclosed, 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 was really bad years for the coy due to economic situation.”
“Running cost is extremely on the high side. Our fixed spent 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 24hrs and 7days 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.”
