Kimberly-Clark, the manufacturer of Huggies diapers and other sanitary products, is set to announce the shutdown of its Ikorodu production facility, just three years after investing $100 million in Nigeria. This decision comes as the company grapples with a harsh economic environment that has hindered its operations.

Sources reveal that the Ikorodu plant has been operating below capacity since late 2023 due to escalating economic pressures. Efforts to reach Kimberly-Clark for comment on Thursday were unsuccessful as the company has yet to respond to inquiries.

The company has faced several challenges since late 2022, including high energy and raw material costs, coupled with reduced demand driven by the prevailing economic conditions in Nigeria. These factors have led to downsizing and a reduction in production days from a full week to just Mondays through Thursdays.

Kimberly-Clark initially began operations in Nigeria in 2012 but halted production in 2019 following a strategic business review. The company resumed operations in 2021, inaugurating a $100 million facility in Ikorodu in 2022. However, the current economic landscape has made it difficult for the plant to operate efficiently.

The challenges faced by Kimberly-Clark are not unique. The company has struggled with high production costs due to increased raw material expenses and currency depreciation, which have impacted the import of essential materials. Additionally, the weak purchasing power of the Nigerian populace has further strained the company’s operations.

Kimberly-Clark Corporation, an American multinational listed on the New York Stock Exchange, produces paper-based consumer products, including sanitary paper products and medical instruments. Despite its global presence and significant investment in Nigeria, the company’s latest decision underscores the difficulties faced by manufacturers operating in the country’s challenging economic climate.