Unilever Nigeria soars against odds
BRAND OF THE MONTH
At a time when many companies operating in Nigeria have endured a desperate struggle for growth, Unilever Nigeria has recorded years of consistent improvement in its performance. Just a few weeks ago the multinational consumer goods brand made public its financial performance for the year ended 2017 where it raised its after tax profit by over 142% to N7.45 billion.
The FMCG giant registered a triple-digit profit performance for a second consecutive year after a 158% rebound gave the conglomerate a new growth momentum in 2016. This is a new profit high for the company since it lost nearly one-half of after tax profit in 2014.
So, for the first time in five years, the company has beaten the peak profit figure of N5.6 billion which it posted in 2012. Unilever recorded loss in profit in each of the three years that followed until the rebound in 2016.
The company also benefited from growth in sales revenue which was a key factor in the company’s strong profit growth over the past two years. Sales revenue accelerated from below 18% in 2016 to 30% in 2017, closing the year with a turnover of N90.77 billion. This is only 2.4% short of the projected full year sales revenue figure of N93 billion for the company.
“Although Unilever Nigeria has not been insulated from the tough economic environment, we have remained focused on our short and long term growth ambitions with clear emphasis on operational intensity, cost efficiencies and growing market share across key categories,” Managing Director of Unilever Nigeria, Mr. Yaw Nsarkoh said.
Unilever has also maintained its growth momentum into 2018 as evident by the recently released first quarter report. The report showed sales grew by 16 percent year on year to N25.8bn. Profit Before Tax and Profit After Tax grew fatter by 80-81 percent year on year. Although gross margin contracted by – 72 basis points year on year to 27.7 percent, this was not enough to offset the year on year sales growth.
Unilever Nigeria’s sustained growth performance have been made possible by a plethora of factors, key among them is its route-to-market/backward integrated strategies, aggressive communication and sustainable development strategies.
Speaking at a recent event in Lagos, Mr. Nsarkoh disclosed that Unilever was a long term investor in Nigeria, stressing that the company was ready to anticipate the aspirations of the consumers and respond creatively with branded products and services that are good for them and others. While reiterating his point, Yaw said 85% of the company’s turnover was manufactured locally so as to build the industrial ecosystem of Nigeria to develop and evolve.
Nsarkoh who noted that Unilever Nigeria was the fastest growing operation in the Unilever world, added that the company was working with indigenous producers to build local industrial capability collaborating with industry to transform cassava and other raw materials to producing tooth paste through its ‘’partner to win’’ project.
‘Partner to Win’ is the Unilever Nigeria’s initiative of investing in capabilities of intermediary companies to enable them to convert farm produce to usable goods that will be sourced by the companies as part of their raw materials.
This also aligns with the company’s project, ‘Nigercentricity’, which is a strategy designed by the company to celebrate Nigeria’s culture and encourage local talent to take up key positions in Unilever value chain. Explaining the significance of the strategy, Nsarkoh said, “it seeks to understand consumers’ instincts and impulses with a view to building viable brands”, adding that “People development is uppermost in anything we do, to expose people to global model’’.
Besides its investment in local content, Unilever has also, in recent times, deepened its footprint in Nigeria in terms of raising its infrastructure portfolio. Less than six months ago, Unilever commissioned its state-of-the-art Blue Band factory at Agbara Industrial Estate, Ogun State.
Built with innovative manufacturing technology, the €10 million factory complements government’s efforts at boosting local investment and making significant contributions to the nation’s economic growth and development. The factory unofficially started production in September 2017.
During the launch, Mr. Nsarkoh, said that the Blue Band factory was the latest addition to the various long-term investments which Unilever had made in Nigeria, which would not have been possible without the support of all its stakeholders. He added that the factory reinforces Unilever’s belief in Nigeria’s future.
“Prior to the siting of this factory we have also had cause to exploit economies of scale and ensure consistent access to reliable sources of raw material input. I am delighted that the result of our painstaking efforts and the support which we enjoy from our stakeholders has led to the commissioning of an ultra-modern Blue Band factory today,” he said.
Speaking further, Yaw said “to sustainably serve our consumers, the new Blue Band factory is equipped with the Fast Blending technology. This technology uses 50% less energy compared to other manufacturing processes that utilise heat exchangers. This recapitulates our commitment to decouple the growth of our business from environmental impact”.
Unilever is also a global leader in the development of sustainable brands. According a report on its global website Unilever was on its fourth consecutive year of growth for its ‘sustainable living’ brands, which grew 46% faster than the rest of the business and delivered 70% of its turnover growth. “All of Unilever’s brands are on a journey towards reducing their environmental footprint and increasing their positive social impact. Sustainable living brands are those that are furthest ahead on the journey to achieving the company’s ambitious sustainability goals,” the company said.
Unilever now has 26 sustainable living brands (up from 18 in 2016). New entrants include household names such as Vaseline, Sunlight and Sunsilk. The list also includes Unilever’s top six brands – Dove, Lipton, Omo, Rexona, Hellmann’s and Knorr.
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