L’Oréal expands Russian manufacturing for new skin care brands
The company has just announced the inauguration of new production lines as part of an extension to its plant in the Kaluga region, situated 85kms south of Moscow.
The Russian economy has been on the rebound in recent years and this has resulted in a jump in consumer spend on beauty personal care products, putting the country amongst the fastest growing markets in the world for 2016.
Expanding with a spotlight on skin care
L’Oréal executives say that these conditions have led to growing demand for its skin care brands in the country, with a simultaneous spike in expectations of product quality, safety and sustainable development, prompting L’Oréal executives to invest further in the market.
The company’s Russian production facility was established in 2010 but was built as a dedicated 10,000 square metre facility for the manufacturing of hair care products, specifically shampoos, conditioners and dyes.
The newly extended facility adds almost 4,000 square metres of space, enabling the production capacity of the facility to be doubled, while also integrating new highly efficient equipment that aims to reduce the facility carbon footprint.
The efficient design has focused on the modernization of local water treatment facilities that have served to recycle 70% of the facility water consumption, while the installation of solar panels have helped to generation 10% of the annual energy consumption for the building.
Holding on to the top position
And the company’s efforts to reduce the facility’s impact on the environment have not gone unrecognized, at the company was just been awarded ‘Eco Corporation of the Year Award’, in a year that has been officially designated the year of ecology, in Russia.
According to Euromonitor, L’Oréal is currently the biggest player in the Russian beauty and personal care market, with estimated annual sales of Roubles 43 billion (Euros 626 million), while the market was estimated to have grown by around 6% in 2016.
However, there are signs that L’Oréal is under increased competition, as consumers have started to demonstrate a shift towards increasingly sophisticated domestic brands, particularly Fabarlic and Natura Siberica, which have been making a bigger splash on the country’s retail scene.
