Cederroth acquires Polish cosmetics manufacturer Dermika

The acquisition is designed to strengthen Cederroth’s position in Poland, and its turnover is expected to increase by 30 per cent as a result, giving it an 11 per cent share of the Polish facial skin care market, according to CEO Leif Wahlgren.

“The Dermika brand gives us a good presence in the premium face care category, where we’ve been relatively weak historically,”​ Wahlgren told CosmeticsDesign-Europe.com, adding that the two companies share a similar business culture, with some of the key managers at Dermika having a Soraya background.

Future growth strategy​

A newly created entity, Cederroth Poland, will market products under the Dermika and Soraya umbrella brands, as well other Cederroth products. Cederroth will become the largest local supplier of facial skin care products in the Polish market, the company said, and it plans to consolidate this position in the future.

“We have a strong position in face and skin care in Poland, so this is today – and has been for quite some time - a core business for us. However, we are also selling a fair amount of body, hair, health and wound care products through our Polish company. This won’t change, but we’re not planning to enter into any new categories now,” ​said Leif.

Leif said that while the focus is on organic growth, Cederroth, which is present in other countries including Sweden, Finland and Spain, is not ruling out other acquisitions in future.

“We’re actively pursuing acquisition opportunities in markets where we’re present already, as well as in high-growth European countries where we currently lack on-the-ground organisations,”​ he said.

Potential of Polish market​

According to Euromonitor, the beauty and personal care market in Poland grew 4.5 per cent in retail value between 2008 and 2009, and in 2009 was worth €2.6bn. The Polish skin care market had a retail value of €469.6mn in 2009, and mass skin care accounted for 88 per cent of sales, while premium skin care accounted for 12 per cent.

According to a June 2010 Euromonitor report, Polish consumers did not drastically cut spending on beauty and personal care products in 2009 as a result of the economic downturn, and importance in appearance continues to drive growth in this market.

While the market is dominated by multinational companies such as Avon, L’Oreal and Procter & Gamble, many domestic manufacturers are aiming to strengthen their positions by launching more advanced products and investing in mass media campaigns, the report noted.