Unilever targets Russian markets with facility investment

By Michelle Yeomans

- Last updated on GMT

Unilever targets Russian markets with facility investment

Related tags Compound annual growth rate Perfume

As the personal care giant continues to focus on emerging markets, it reveals it now has plans to double the capacities of its Russian factory in a bid to cater to perfume and cosmetic demand.

The Anglo-Dutch company is investing €36m in a venture that will ultimately double the current production capacity of its flagship St Petersburg Severnoe Siyanie (Northern Lights) factory from 90,000 tonnes to that of 180,000 tonnes.

In this instance the personal care giant reveals it is set to build a new production facility with a total area of 7,500sqm, whilst also reconstructing the production and warehouse complex, which will have a total area of 30,000sqm.

The fragrance and cosmetic lines developed at the facility will be specifically designed to cater to Russian consumer demand according to CEO Paul Polman, who says the ranges will be then be ready to launch by the end of 2014.

Our business has grown by €10 billion since 2009 despite the challenging economic conditions. This has been made possible through the investment our strategic supplier partners have made in increased capacity, innovation delivery and sustainable solutions together with Unileve​r,” he says.

Adding that; "we consider the Russian market promising, with full potential for further development and growth.​"

Evolvement of Russian cosmetics market

The fragrance category is one of the top three health and beauty sectors in Russia, holding a value compound annual growth rate (CAGR) of 10.1 per cent, and volume CAGR of 8.9 per cent for 2012 to 2017, according to recent Canadean figures.

The market researcher also indicates more and more Russian men are taking pride in their appearance and worrying about the impression they exude, which, in turn, has boosted the men’s fragrance sector in the country.

The category is also expected to continue to grow through to 2017 at a value CAGR of 10.0 per cent and volume CAGR of 8.9 per cent.

Female fragrances have long been the dominant force in the category, and still are, holding value and volume shares of 64.3 and 63.9 per cent respectively.

While direct selling companies continue to hold the highest value shares in fragrances in Russia, with Avon Products and Oriflame Cosmetics holding the largest market share in mass fragrances.

 

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