Unilever Plc to make Ghana unit export hub

Unilever Plc has affirmed its confidence in the local economy by revealing plans to convert the Ghana unit into a manufacturing hub, where goods meant for export will be manufactured in the country and subsequently shipped to the respective countries in the subregion and the continent at large.

The decision also informed the establishment of a 4.4 million euro factory to, among other things, supply finished and semi-finished goods to Nigeria and countries within Francophone West Africa, the Chief Executive Officer of Unilever Global, Mr Paul Polman, said in Accra.

The hub concept, he said, was testament of Unilever's commitment to the economy and Ghana as a whole.

With Ghana's annual population growth steady and currently estimated at 25 million, Mr Polman said, demand for consumables, which Unilever specialises in, was expected to see consistent rise in the coming years hence, the need for fast-moving consumer goods manufacturers (FMCGM) like Unilever Ghana to strategically position their operations to benefit from that development.

The same applied to Africa, which the Unilever boss said, was part of the few promising continents in the world in the 21st century.

"Africa's potential for growth is undisputed and we have confidence that any investment in the continent will be in the right direction the continent is the fastest growing continent currently and that makes it reasonable to have investments like these here in Ghana. The same thing applies to Ghana, where growth has been steady," Mr Polman said at the inauguration of the company's new personal care factory at its Tema premises.

The planned conversion of the Ghana unit into an export hub comes in the wake of mounting challenges facing manufacturers in the country.

In addition to the county's unreliable utility sector, companies in the sector have had to contend with a weakening currency which has dropped from about GHS2.35 to a US dollar in the beginning of the year to GH¢3.65 in the week ending September 12.

These challenges, together with frequent increases in fuel prices, played a big part in the high inflationary trend from 13.5 per cent in December last year to a four year high of 15.9 per cent in August, this year.

These challenges dampened consumer sentiments leading to a lower than anticipated demand for goods and services in the country. 

Unilever Ghana, which specialises in the manufacture and supply of personal care products, recently reported a GH¢6.5 million loss in the first half of the year, citing the weakening cedi and its impact on inflation as causes.

Its cost of sales, which has been a bane, rising from GH¢112.2 million in the first half of 2013 to Ghc150.3 million in the same period this year.

Ebola scare and sanitiser demand

Although since the outbreak of the ebola virus, evidence abounds that personal care products such as sanitisers and frequent washing of hands with soap, prevents it spread.

Unilever, which produces a range of sanitisers, admitted the development had boosted demand for its label but declined to say it was profiting from the outbreak.

The Global CEO said the company had always helped in taming the spread of epidemics by advocating proper application of the right measures to stem the spread.

A typical example, he said, was the Unilever Hand Washing Campaign, which had so far benefited millions of people, especially children across the globe.

"We would continue to help prevent the spread of disease like ebola. We have always done it and we will continue to do," Mr Polman said in response to a question on how the company was reacting to the ebola scare and its impact on patronage for sanitiser.

GRAPHIC BUSINESS

{module share}