Unilever falters in its French-speaking stronghold in Côte d’Ivoire

In West Africa, the path of the giant Unilever – known for Calvé mayonnaise, Omo washing powder, and Signal toothpaste – is rife with pitfalls. The group’s Ivorian subsidiary, its stronghold in the Francophone zone and its base for supplying other countries in the West African Economic and Monetary Union (WAEMU), is back in the black.

For 2022, Unilever Côte d’Ivoire (UCI)’s turnover was down by 21% year-on-year to CFA francs 36.1bn (about $59m), with a net loss of  6.3bn CFA francs ($10.5m), according to the provisional activity report recently made public.

Food for thought

“The turnover was strongly impacted by the exit of tea activity and by the disruption of export markets, with the embargo on Mali and the tightening of regulations on triangular trade in the sub-region imposed by the BCEAO,” the subsidiary stated in its report.

Unilever has been present in the country since 1929 via the company Blohorn, which became UCI in 1969.

To improve its overall performance, the Anglo-Dutch giant, which had a global turnover of $65.3bn in 2022 and employs 127,000 people worldwide, announced at the end of 2021 the sale of its tea subsidiary Ekaterra, known in particular for the Lipton brand, to private equity fund CVC for $4.8bn.

The decision by the group has penalised the Ivorian subsidiary, fuelling difficulties in neighbouring markets including Mali, Burkina Faso, Niger, Senegal, and Cameroon. Unilever made Côte d’Ivoire its regional headquarter for its activities in French-speaking sub-Saharan Africa in 2017.

“On the other hand, Côte d’Ivoire remained relatively stable despite the impact of the exit of tea,” the group says, specifying that the loss of turnover “was largely compensated by the good performance recorded in the ‘household products’ category, ” notably by the BF and Ideal soap brands.

Serial reversals

The setback – although it comes after a slight recovery in 2021 – is part of a series of difficult years. Since 2018, the subsidiary’s turnover has been steadily declining and (with the exception of 2021) its net result has always been negative.

The group, which employed some 200 people in Côte d’Ivoire in 2020 and concentrates its production activities on its Vidri site, is facing increasing competition and is struggling to fight back.

“The various segments in which the company operates are characterised by a virtual absence of barriers to entry. This has led to an acceleration of new entrants ranging from the small trader importing a few tonnes of washing powder from Asia to the local producer, who knows how to optimise its costs and takes risks more easily,” read an information note in 2019 relating to a share issue carried out by the subsidiary that same year to reconstitute its equity.

International versus local brands

While it was competing with the Ivorian-Lebanese group Carré d’Or in tea sales, UCI is being pushed around in the mayonnaise and cleaning and hygiene niche by Sipro-Chim (food and cleaning products) and Sivop (perfumes and cosmetics) – companies under the control of businessman Ali Hojeij.

For example, its mayonnaise brand, Calvé, is in a battle with Sipro-Chim’s Aromate, while a similar battle is taking place between its Omo washing powder (which Unilever stopped manufacturing locally to import from Nigeria in 2019) and Nil, also from Sipro-Chim.

The African Refining Company in Côte d’Ivoire (Sarci), the Senegalese group Gandour, and Palmolive, among others, are also competitors.

“Recognised international brands are losing ground to local brands, according to basic trends. It’s a safe bet that Unilever, like Nestlé, will be less and less interested in Africa because they won’t be able to achieve the profitability demanded by the parent company,” says someone who works in the sector.

It is within this complicated context that UCI must manage its operations. After having been led by two African women – the Ghanaian Maidie Arkutu (2017-2018) and the Ivorian Manon Karamoko (2018-2022) – Tim Kleinebenne was appointed as head of the division for one year before moving to head the company in Nigeria.

On 12 May it was announced that Arona Diop, who has been at the company since 2019, has now taken over as head of the Ivorian subsidiary.