We are Committed to Backward Integration — P&G Managing Director

By August 29, 2019 Investment News

The Managing Director of Proctor and Gamble (P&G) Nigeria, Adil Farhat, is barely one year in office. In this interview, he speaks on the company’s commitment to increasing its footprint in Nigeria and other measures taken to reposition the personal healthcare industry.

Before your appointment as the Managing Director of P&G, your Vice President Sub-Saharan Africa said you will bring fresh ideas and innovative approach that will enhance and revamp P&G Nigeria operations. One year down the line, how far have you been able to do this?

P&G has been operating in Nigeria for over 27 years and our commitment to Nigeria is very strong and long term. Every year, we have a business circle which ensures we continue to invest and continue to grow in the country. Based on that, I made sure after my appointment that we followed both strategies, that is, to continue to invest and continue to grow in Nigeria and also to increase our footprint.

I think we have made good progress in terms of increasing the footprint of our products. We have gone into new products in our existing portfolio like an Always sanitary pad. You might have noticed the Always soft launch which is a better-priced product for Nigerian consumers.

We have introduced newer products portfolio in Nigeria as well. We are the first company in Nigeria to introduce Diaper pants and Pampers pant portfolio. So I think in regards to our investment in Nigeria and diverse footprint, we have made reassuring progress.

At the same time, from our golden market standpoint, we continue to invest; we continue to partner with more distributors to make sure that our products reach more shoppers and consumers in parts of the country.

Nigeria has a high demand for personal hygiene products as a result of its huge population which has necessitated influx of foreign products. What is the nature of competition amongst niche players and major players like your company?

Nigeria is a big market and what we generally believe is that healthy competition is good; the more quality players, quality supplies are available in the market, the bigger the category and faster the categories grow which means that access to products is increasing and products get to more people. I think this is positive because all these suppliers are going to invest in programmers’, into advertising which is to ensure more access to the Nigerian population.

Doing business in Nigeria is tough for consumers and tougher for manufacturers yet you are here talking about investment. How tough is the operational environment and how does P&G manage to navigate the challenges to remain afloat?

We have been in Nigeria for 27 years now and we are very committed to the country, we will be here for a long time to come. We have two manufacturing facilities in Nigeria, one in Ibadan and one in Lagos, and we will continue to look for other opportunities to invest in the country.

Our experience of 27 years has also made us to better understand the economics and dynamics of the country and I think that time spent in Nigeria makes us better prepared for the future as well. The country offers so many opportunities, is the environment tough? There is always room for improvement, but the key is to remain committed to the country, work with government and stakeholders to improve the ease of doing business and the environment regarding investment in the country.

Give an overview, developments and, possibly, challenges in the Nigerian personal hygiene market against the backdrop of the economic contractions?

I think our portfolios are very well placed to serve across multiple categories of consumers in Nigeria. We have the diaper brand in Pampers for babies. We have the Always pad brands which cater to young girls who are just about to enter into puberty.

Then we have Gillette which is a global shave care leader, Oral-B and Ariel, our globally renowned toothpaste and detergent brands. So we have six leading world-class brands in Nigeria. Our footprint is quite broad, and, if you talk specifically about Pampers and Always, Always has continued to invest in ensuring that we continue to give priority to hygiene in healthcare for young girls in Nigeria, and, for not having proper access to pads, young girls lose up to five to seven days a month in school when their period starts, and I think that is a critical age that has a lot of impact and confidence as they grow up. Always stepped in with a school program and plays a big role in keeping those girls in school, making sure they learn personal health and hygiene early in life and using that information to overcome the confidence they need.

The choice is a challenge and comes with underhand practices like substandard products, the influx of foreign products and challenges of regulation. How do you handle all these including sourcing your materials and still staying competitive?

Backward integration drive is something that we are passionate about; ideally, we like to source all our materials locally and continue to make improvements every year. What we do every year is meet and work with our suppliers on capability development as well across the categories to ensure that more of our materials are sourced locally and the government continues to help us to make the conditions favourable. P&G is one of the leading investors in Nigeria; I think the government has worked well with us in terms of making sure that there is a level-playing field as far as the polity is concerned.

Give us the per cent of the local raw materials you put in your products

In our Ariel brand, we are manufacturing in Ibadan and, right now, we have 100 per cent packaging materials sourced locally. We are also trying to source the ingredients locally; that is why we continue to host our suppliers, even the Manufacturers Association of Nigeria and the Ministry of Trade and Investment to see how our suppliers are able to access those raw materials. There are some raw materials we cannot source locally, but currently, over 60 per cent components are sourced locally. That is why we are still importing and but engaging our suppliers to see how they can produce them locally.

What are the untapped opportunities your company could be moving into in the short to medium term?

Nigeria is a country that offers tremendous opportunities. Globally our company operates in 10 categories across 60 brands and we continue to look into opportunities and how we can tap into that portfolio. So locally we continue to look towards the brands that we sell. We have the Always ultra business, we have now moved into an Always soft business where we produce Pampers pants. We expanded our Gillette portfolio recently where we will continue to sell fusion razors up to double edge razors, Oral-B and other categories. Within these portfolios, we continue to look for opportunities as we go forward.

You have been in other markets before coming to Nigeria. Compare the market you have been into what you have in Nigeria.

One way to compare this market is to have an idea of how the categories are developing vis-a-vis our products. One challenging thing in the market like Nigeria’s is that we need to invest enough with programs like Always Keeping Girls in School (AKGS), Pampers Hospital Education and Oral-B Doctors on Wheel. We make sure the category goes as deep as possible in terms of usage so that more people get access to better sanitary pads, diapers and paste. I think one other thing that differentiates the Nigerian market from some other parts of the world market like Europe, for example, is that the categories are more developed and so more people have access. We need to go the same way in Nigeria in order to access to more people. I think that is one key difference, and partners like MercyCorp on Always and other partners in other categories help us go deeper to reach as more people as possible.


Source: Vanguard