Avon plans new distribution center in Brazil

By Katie Bird

- Last updated on GMT

Related tags New distribution center São paulo

Avon has announced plans for a new distribution center in Sao Paulo, Brazil, in an attempt to meet growing demand in the region.

Latin America is a strong performer for the company and this year’s second quarter sales rose by 27 per cent in the region.

Center helps meet increasing demand

“This new distribution center will help to uphold increasing demand in this key market as well as offer even higher quality service in a very aggressive competitive environment,”​ said President of Avon Brazil, Luis Felipe Miranda.

Construction of the new centre will begin early 2009 in Cabreúva, an hour north of Sao Paulo.

The company hopes the new facility will begin shipping orders in the second half of 2010 and it plans to phase out the existing Osasco centre in 2011.

In total, around $150m will be invested in the center and when at full capacity the automated systems will help streamline workflows, which the company hopes will save costs in the long term.

At capacity the new center should be able to ship up to 70 per cent of Brazil’s unit volume and will employ approximately 1,300 individuals.

Emerging markets drive results

Emerging markets are becoming increasingly important for the direct selling cosmetics company and these new regions, along with Avon's continuing restructuring efforts, helped the firm double operating profits in the last quarter.

The results, reported earlier this summer for the quarter ending June 30, were hailed by CEO Andrea Jung as the best the company has published since launching its turnaround plan in 2005.

With the investment, Avon is underlining its confidence in the region, when the more developed markets appear to be struggling in the light of the current economic climate.

“With 50 years of experience in Brazil, contributing to the empowerment and financial independence of more than 1 million independent representatives, Avon is celebrating its presence in the country and reinforcing its confidence in its growth by investing in this new state of the art facility,”​ said President of Avon Brazil, Luis Felipe Miranda.

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