L'Oreal extends Russian business with new plant

By Katie Bird

- Last updated on GMT

Related tags Hair care Russia L'oréal

Cosmetics giant L'Oréal is investing in a new Russian factory south
west of Moscow in an attempt to capitalise on this ever expanding

The plant, located approximately 190km south west of Moscow in Kaluga, will represent an investment of €45m, according to press reports.

Plant focuses on hair care Construction on the site should to be completed by the end of 2010 and regional governor Anatoly Artamonov assured the France-based cosmetics company all necessary support for the project.

The Kaluga plant will concentrate predominantly on hair care products and will produce up to 300 million units per year, said the local administration.

In addition, the administration said L'Oréal has expressed a wish to use local materials and establish partnerships with local suppliers as much as possible.

The investment should enable the company to further take advantage of the opportunities presented by the Russian market.

Significant growth in the region According to a recent report from RNCOS the cosmetics and perfumery market in the region is tipped to grow at a CAGR of 13.6 per cent from 2008 to 2012.

In addition, the market research company highlighted hair care as a major driving segment within the industry.

The cosmetics behemoth is not new to the Russian market and has underlined the market as one of the more important emerging markets.

Last year's financial results for L'Oréal were significantly boosted by the Eastern European region which experienced sales growth of 29.4 per cent.

The company highlighted Russia and Poland as two particularly strong markets, as well as noting the fast growth of its Ukrainian operations.

L'Oréal's Professional Products line is becoming a leader in Russia, Poland and Czech Republic, according to the company who now boast more than 10,000 salons in the area.

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