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Tea production halt not over economic challenges; only a strategic decision – Unilever Ghana

Unilever Ghana PLC has clarified reports suggesting the relocation of its tea production line (Lipton) to its subsidiary in Nigeria due to unfavourable business conditions in Ghana.

The company explained that the halt in the tea production is a global group strategy to hand over to Nigerian firm, Eketerra and not because of macro-economic challenges.

Recently, some multinational companies exited Ghana over economic and profitability concerns.

When this development became topical, Unilever Ghana, one of the longest-operating fast-moving consumer goods companies, was also cited following the suspension of its tea production line, Lipton.

But Managing Director of Unilever Ghana, Chris Wulff-Caesar has moved to clarify that the decision was part of a broader global strategic move to optimize operations and leverage the strengths of its subsidiaries.

“Certain decisions are taken at the global level, which sometimes impact us. Sometime around 2019, we had to let go of our oils and spread business to another company upfield who are just next door to us. And this is all part of a global strategy to focus on certain core categories within the organization.

“The tea story is very similar, this is not a Unilever Ghana decision, let me be very clear. This is a global strategy decision to offload its tea operations to allow it to operate in a way that is more efficient and not as part of the current set-up of the way we operate as Unilever globally.

During a visit to the factory in Tema by Citi Business News as part of a familiarization tour, it was observed that production of some of Unilever Ghana’s popular brands was in full swing.

Management added it is important to streamline its global supply chain to enhance efficiency across all business units, stressing the company’s operational stability.

“The tea operations leaving Ghana have nothing to do with “Dumsor” or activities in Ghana. It is a global strategy decision. The new company Eketerra has taken over that business and not Unilever Nigeria. The decision started in 2021, it took time for it to take effect.”

“Ghana remains a place for investment, there’s still investment going on in our factory. Unilever still sees Ghana as a good investment destination. Unilever is here to stay in Ghana”, the MD added.

Per the financial statement of Unilever Ghana PLC for the year ending 2023, the company posted a robust performance with a significant 838 per cent increase in profit compared to the previous year.

The company has already shown signs of growth as it has made over GHS 240 million in revenue for the first quarter of 2024 driven by material cost savings.

Source:Citi NewsRoom

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