L’Oreal establishes first ever manufacturing facility in Russia

By Simon Pitman

- Last updated on GMT

Related tags: Russia

In answer to fast growing demand for its products in the Russian market, L’Oreal has announced the opening of its first manufacturing plant in the country.

The facility, situated in the Kaluga region, 85kms south of the Moscow, is a 10,000 square metre facility designed for the manufacture of shampoos, conditioners and hair dyes under the L’Oreal Paris and Garnier brands.

The range of hair care products will primarily be manufactured for distribution in the Russian market, together with Ukraine and other countries within the Central European Initiative (CEI).

Strategic positioning in business hub

According to L’Oreal, the facility was completed in just over one year, from the start of construction to production-line testing, and it has been strategically places between two the country’s busiest business hubs, Kaluga and Moscow.

The facility will initially produce up to 120 million units per year, but future production expansion has been built into the design , which means that initial production could more than double if demand is heavy enough.

Currently the facility employs approximately 60 people, but once production capacity is reached that figure is expected to be closer to 300 staff, with recruitment being focused on finding local recruits specialised in this type of production.

Facility will help meet future consumer demands

As well as meeting current demand, the facility will enable the company to be more responsive to future consumer demands in the region, in particular aiding in the ramp up for new product launches.

L’Oreal has been growing its business rapidly in the Russian market, in line with a steep rise in consumer spending power in the country as a whole that has translated into increased demand for beauty products.

In 2009 the company registered sales of €563m in Russia, while sales for the first half of 2010 have already shown an increase of 17.6 per cent on the same period last year, the company claims.

L'Oreal Russia sales go from strength to strength

“Since 2004, L’Oreal Russia has tripled it sales in local currency,”​ said Pekka Huttenen, L’Oreal Russia general manager.

“It is the 8th market for the group in terms of sales and is one of the L’Oreal’s fastest growing markets. L’Oreal’s first factory in Russia will play a key role in responding to the growing demand in Ukrain and in the CEI countries,”​ he said.

Related topics: Business & Financial

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