UPDATE 1-P&G invests $450 mln in new, better African plants

Tue Mar 19, 2013 10:55am EDT

Related Topics

* To invest $175 million in new plant in South Africa

* Work on a $200 mln plant in Nigeria underway

By Tiisetso Motsoeneng

JOHANNESBURG, March 19 (Reuters) - Procter & Gamble Co. , the world's biggest household products maker, is spending $450 million upgrading and building new factories in Africa, the latest multinational to position itself for take-off on the fast-growing continent.

The bulk of the money is being spent in South Africa, where the firm plans to build a 1.6 billion rand ($175 million) plant next year, and in Nigeria, where it is in the middle of constructing a $200 million baby-care products facility.

Africa has been in the limelight for global consumer firms since Wal-Mart's $2.4 billion acquisition in 2011 of South African retailer Massmart gave the world's largest retailer a foothold in several sub-Saharan countries.

P&G, which already makes nappies for South Africa in a factory near Johannesburg, said the new factory in Africa's biggest economy would make products such as detergents for the local market and export to southern and east Africa.

Construction of the facility, which the company said would be among its biggest in Africa and Europe, would start next year, with production expected by 2017.

"Sub-Saharan Africa is the fastest growing region for our business," said Michael Yates, one of P&G's top officials in the region.

Yates also said a factory in Nigeria's Ogun state, 200 km (130 miles) outside Lagos, was expected to start production in the next year. P&G is also upgrading its factory in Morocco, Yates said.

Global consumer goods companies want their products on the shelves of retailers such Shoprite which have laid out aggressive plans for store openings across the continent of a billion people.

However, Shoprite - Africa's largest retailer - and rivals Massmart and Pick n Pay have been slower to put their plans into action due to a lack of shopping malls in most of the continent.

P&G's expansion plans pit it against South African firm Tiger Brands and Anglo-Dutch consumer goods company Unilever, which has said it wants to double its Africa revenue in the next few years.

Swiss consumer foods maker Nestle is in the middle of a 1 billion Swiss francs ($1.06 billion) investment in expanding and upgrading facilities in Africa.

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