Brazilian cosmetic manufacturing booms

By Simon Pitman

- Last updated on GMT

Related tags Cosmetics

The number of cosmetic production facilities is booming in Brazil,
due to a huge increase in domestic consumption as well as a major
demand for Amazonian-sourced natural ingredients.

A study by the Brazilian Association of Toiletries, Perfumes & Cosmetics (Abihpec) reveals that there are now 1,367 companies registered for business in the cosmetics and toiletries sector, driven by 107 morenew production facilities being established during the course of 2005.

Further to these figures, Abihpec reveals that in the northeastern state of Bahia, which borders the Amazonian basin, the number of factories has increased by 90 per cent.

Much of this expansion is being fed by the increase in processing of Amazonian-sourced natural ingredients. Abihpec has been working hard with the Sindocosmetic organization, which represents the cosmetics industry in Bahia, to develop the industry in the region, which is one of the less economically developed states in Brazil.

"To this end, we carry out professional training programs that are tailored towards the prospects in this new market, encouraging the competitiveness of these companies on a national basis,"​ explained João Carlos Basílio, president of Abihpec.

Raul Menezes, president of Sindicosmetic, went on to explain that in 2003 there were just five cosmetics companies regulated within the state. Now, through the work of the organizations and the general boom in the cosmetics sector, that number now stands at 21 companies, representing a turnover of BRL40 million ($18.5m) and employing 300 people.

The state of Rio Grande do Sul, in the far south of the country, is also said to have benefited from the boom, having jumped from 95 to 105 production facilities in the course of 2005.

Here the companies are said to be gearing up to the demands of the international markets, the major advantage being that they are located within close proximity to a series of major packaging providers that operate out of the state.

Basilio said that one of his major challenges in the year ahead will be to ensure that companies are geared up towards fulfilling all the regulations that safeguard the industry, particularly those of quality and safety.

Abihpec will also be focusing on the demands of small to medium-sized players.

"These players will become agile and dynamic as they develop to serve specific niches, and launch products that are differentiated to serve new markets,"​ said Basílio.

The domestic market has shown significant growth in 2005, having reached $6.3 billion, an increase of 14.5 per cent on the 2004 figure.

Breaking this figure down, Abihpec said that the value of sales for the hygiene sector grew by 13.4 per cent, while the cosmetics sector grew by 15.8 per cent - highlighted by the strong growth of perfumes, with sales 17.6 per cent higher than in 2004.

The association is estimating growth of approximately 20 per cent for the cosmetics and toiletry industry during the course of 2006, against a backdrop of 7 to 7.5 per cent inflation, giving it a projected value of approximately $6.9 billion.

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