L’Oreal awards UK firm its largest procurement contract

01-Aug-2011 - Last updated on 02-Aug-2011 at 11:00 GMT

A UK-based business processing firm has beaten off all competition to land a three-and-a-half year procurement co-sourcing contract with cosmetics giant L’Oreal, as it looks to streamline processes and make savings.

As part of the contract, Xchanging will manage a significant amount of indirect procurement on behalf of L'Oreal across five countries - France, the UK, Germany, Italy and Spain.

Denis Royer, managing director, at Xchanging Procurement Services Europe, commented: "We are delighted to have won this contract with L'Oreal after a rigorous competitive process, enhancing our leading position in the European procurement services market.”

Deliver savings

“We look forward to working closely with the L'Oreal team and delivering the savings and benefits they expect from Xchanging".

Xchanging will operate on a co-sourcing basis working alongside L'Oreal's purchasing team to streamline purchasing processes and improve overall quality and cost.

The contract spans various categories of indirect spend including: Information Technology and Telecommunications, Facilities Management, Human Resources, Light Transport and Logistics Supplies, Travel, Industrial Supplies & Services, Utilities and Laboratory Supplies.

The UK firm will also provide procurement management activities including reporting, supplier and contract management.

Q2 results not quite what was expected

Last month the French cosmetics maker also released its second quarter sales results which revealed that trading was down in Eastern Europe and North America due to less consumer demand.

Sales between April and June reached €4.64bn showing a 4.6 per cent increase on last year, but under the expected growth rate, particularly after a strong first quarter.

The biggest slowdown came in Eastern Europe, having recorded a slight growth in this region in the first quarter, reported sales tumbled 8.2 per cent.

“After several years of growth, the sales trend in Eastern Europe is disappointing in all the countries of this zone, particularly in Russia and Ukraine,” commented CEO Jean-Paul Agon.

The zone took another hit this quarter adding to what has been a slow start to the year in what L’Oreal call ‘a dismal economic environment’.