Business Downtime for Unilever Nigeria PLC as the Company loses over N3Billion 

Recently, Unilever Nigeria Plc stopped the operation of its home care and skin cleansing products which consist of the Omo washing powder, Key soap, Pears baby care goods, Vaseline petroleum jelly, and Lux soap. This development has caused the company to lose about N3.7 billion as revealed in its financial statement of the year. 

According to this statement, the year ended on the 31st of December, 2023 and the unaudited financial report disclosed that during that period, more than N1.42bn has been lost even since 2022. 

About 11 months ago, Unilever Nigeria Plc announced its plans to halt all operations concerning home care and skin cleansing market products but the production continued until December 2023. 

Per information rolled out by the company, it didn't just decide to put a pause on the affected products. Unilever Nigeria Plc said that It altered its business model to accelerate the company growth and better cater to the demands of consumers, shareholders, and employees.

“Strengthening business operations with measures to digitize and simplify processes; and focusing more on business continuity measures that reduce exposure to devaluation and currency liquidity in our business model," the statement released by the company read.

Unilever stated that the reported figures represent the outcomes of the Home Care and Skin Cleansing business categories, spanning from the start of 2023 until their discontinuation in September and December, respectively. The comparative figures depict the full-year results of these business categories in 2022.

During the review period, Unilever made N16.484 billion in sales from discontinued products, but the cost of sales was higher at N17.044 billion. The company also revealed a 10-year Finance Lease for Plants and Machinery used in Home Care and Skin Cleansing. Unilever Nigeria got royalty and service fee breaks in 2023.

Under an agreement, Unilever Nigeria Plc has exclusive rights to produce and sell international brands like Omo and Lux in Nigeria. They pay 2% of sales for royalty and 0.5% for Technology and Trade Mark licenses to Unilever Plc, UK.

Reportedly, the company also has a deal with Unilever Europe Business Centre for strategic direction and expert advice on legal, tax, finance, HR, and IT. They pay a 2% fee on profit before tax. In 2023, Unilever Nigeria had a break from paying royalties and service fees. The reported N106 million in 2023 is an adjustment from what was due in 2022.

Even though Unilever Nigeria faced a significant loss, the company acknowledges that it was expected after stopping those operations. The key point is that they believe better days are ahead. 

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