Baltic states cosmetic distribution consolidates

Related tags Russia

Kruzas Nordic Cosmetics Distribution, a new cosmetics distribution
company serving the Baltic states and Russia, went into operation
from 1 January, 2005. An amalgamation of two existing distribution
companies, it is aiming to be the dominant player in the Baltic

The company says that as it streamlines its operations the combined sales of the operation should reach €5.5 million, about the same level as last year. A spokesman for the company said that it was planning to distribute a number of new cosmetic lines in the course of 2005, but that it would also be dropping a number of lines that have not been performing so strongly in recent months.

KNDC has been formed from a partnership between two of the Baltic states leading cosmetic distributors, Kruzo Prekyba and Baltsarma, which are both based in Lithuania. The company says that there are further plans for expansion in the future and that further potential for expansion will soon be realised by the addition of Latvian cosmetics distribution company KCC, which is a part of the Baltic Cosmetic company.

As well as the growing Baltic economies, KNDC is also aiming to supply the even faster growing market for cosmetics in both the Ukraine and Russia.

"We have no doubt that this merger will guarantee the leading position in the Baltic states and help us to develop our business operations in Russia, the Ukraine and other neighbouring countries,"​ Daina Simkeviciene, CEO of KNCD told the ELTA news agency.

Kruzas Nordic distributes a number of leading cosmetics brand names, including Adidas, Estee Lauder, Mimmel and Lummene. Added to this the company expects that a number of new distribution agreements with other leading companies will be formed in the course of the next year.

The cosmetics industry in central and eastern Europe has been showing increasing signs of growth in recent years. Indeed, in recent years many of the leading European cosmetics companies have been turning to the emerging markets in this region in search of continued growth to counter-balance the mature western European market.

Although expenditure on cosmetics and toiletries in eastern Europe is still only a fraction of what it is in the west, the potential for future growth gives companies such as KNDC plenty of reason to be positive about future opportunities. Indeed in 2003 the cosmetics market in the Ukraine grew at 22.4 per cent, whereas in Russia it grew at 14.3 per cent. Equally the growth of the market in the Baltic states has been nudging into double figures during the last couple of years.

Related topics Market Trends