Why P&G Shuts Down Operations in Pakistan

Procter & Gamble (P&G), the American consumer-goods giant famous for brands such as Gillette, Pampers, Ariel, Head & Shoulders, and many more, has officially declared that it is winding down its direct manufacturing and commercial operations in Pakistan. Instead, the company will shift to a third-party distributor model to continue serving consumers in the country. 

What Has Been Announced

• P&G will discontinue manufacturing and commercial operations of its subsidiaries, including P&G Pakistan and Gillette Pakistan Limited. 

• Rather than completely leaving the market, P&G plans to serve Pakistani consumers via third-party distributors, meaning the products will still be available locally, but the company will no longer directly manage manufacturing, sales, or certain operational activities in Pakistan.

• The change is part of P&G’s global restructuring strategy, aimed at optimizing its portfolio, supply chain, and investments. The company says these steps are intended to accelerate growth and value creation.

• The transition will take several months. During this period, P&G will continue operations “in the ordinary course” until the shift is complete. Employee impact is being considered; some may get opportunities in P&G operations outside Pakistan, others may receive lawful separation packages.

Why Is P&G Doing This?

While P&G has pointed to its global efforts to streamline operations and focus on high-return markets, there are also local factors that make doing business in Pakistan more complex. Some of these include:

• Currency volatility, foreign exchange constraints, and difficulties in profit repatriation.

• Regulatory and policy unpredictability, which pose risks for companies that manage their own operations.

• Rising costs associated with local manufacturing, logistics, import duties, and supply chain challenges.

These kinds of issues have in recent years led many multinational corporations operating in Pakistan to reconsider their business models or reduce their direct exposure.

Impacts and Implications

Employees: One of the most immediate concerns is for P&G staff in Pakistan. While the company has stated that it will consider roles for some employees outside Pakistan or offer separation packages in compliance with local laws, the downsizing and winding down of operations will certainly affect many jobs.

Gillette Pakistan & PSX: Gillette Pakistan, a listed subsidiary of P&G, may be delisted from the Pakistan Stock Exchange (PSX) as part of this restructuring. The board is expected to meet to decide on the necessary steps.

Consumers: P&G’s brands are expected to remain available; they will just be provided through different channels (third-party distributors rather than direct corporate channels). This may affect pricing, supply consistency, or availability in some cases.

Supply Chain & Local Vendors: Companies that supplied P&G or provided contract manufacturing, logistics, or packaging may lose business, or face renegotiated contracts under the distributor model. Local industries that depended on P&G’s scale could see revenues drop.

Investment Climate Signal: Many analysts view this move as a red flag regarding Pakistan’s ability to retain multinational investors. It underlines concerns about policy stability, foreign exchange risk, import duties, and the cost of doing business.

What’s Next?

• Transition period: The shift won’t be immediate. P&G has said it will operate normally while the transition planning takes place. Several months are expected before the full shift to third-party distribution is in place.

• Board meetings for Gillette Pakistan to decide on delisting and compliance steps with PSX regulations.

• Employee communications, including possible redeployment or severance packages. Dawn

• Regulatory & legal considerations, especially regarding contracts, import licenses, supply chain integrations, and how distributor agreements will be structured.

Conclusion

P&G’s decision to shut down its direct manufacturing and commercial operations in Pakistan marks a major shift for both the company and the local marketplace. While it does not indicate that P&G products will vanish, it signals a retreat from fully owning local business infrastructure. The move reflects both global strategic changes within P&G and specific challenges in Pakistan — from economic policy uncertainty to exchange rate pressures and regulatory complexity.

This development is likely to have ripple effects across employment, local suppliers, and how multinational firms evaluate risk in Pakistan. It also underscores the importance of stable economic policies and investor-friendly environments for countries aiming to attract and retain global firms.

Read Also: Elon Musk Cancel Netflix: Why He Wants Users to Quit