Indian personal care giant tackles African market

By Katie Bird

- Last updated on GMT

Related tags: Africa, Nigeria

A subsidiary of a leading Indian consumer goods manufacturer has
commissioned a toothpaste factory in Nigeria, adding to a growing
number of companies attracted by Africa's low manufacturing and
labour costs.

While the African market for consumer goods such as cosmetics is in its infancy, it may hold promise for the future as the disposable income of the high socioeconomic class increases. The plant, set up with approximately 430m Nigerian Naira ($3.62m), is set to manufacture a range of toothpastes for the African markets. African Consumer Care (AFCC), a subsidiary of Dabur International one of India's largest consumer goods companies, plans to take advantage of the growing Nigerian market and the potential of its neighbours. The company plans to expand the facility in order to introduce new toothpaste variants and a range of skin care products, as well as household products, providing jobs for up to 200 staff by 2010. "Nigeria is today one of the fastest growing overseas markets for Dabur. We have already seen our business in Nigeria triple during the July-September quarter of 2007"​ said Dabur India CEO Sunil Duggal. The company hopes that with the manufacturing facility in place the AFCC will be in a stronger position not only in Nigeria but also in neighbouring countries, added Mr Duggal. According to the CEO, Nigeria represents one of the world's most rapidly growing markets for fast moving consumer goods (FMCG) products. "A manufacturing presence here gives us a competitive edge that we intend to utilize in full"​ he explained. Dabur International is not the only personal care manufacturer to invest in the African market. Earlier this year PZ Cussons, a UK company with a long history of trading in Africa, announced plans to invest €25m ($37m) in Nigerian manufacturing facilities. The company said the approval of the $37m investment was helped by a favourable political and economic climate in Nigeria following the successful political transition to a new democratically elected government. In more general terms, foreign trade and investment into the continent appears to be strong, particularly from the Chinese who are attracted by impressive natural resources and low labour costs. In 2005 Chinese investment into the continent amounted to $1.6bn, according to UNCTAD. Of particular interest to potential investors are Africa's natural resources of oil, metal ores, and precious stones. Low labour costs, increasingly stable political climates and favourable domestic markets are beginning to make the continent a more popular choice for consumer goods manufacturers.

Related topics: Business & Financial, Color Cosmetics

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