L'Oréal's new Hubei factory begins production

By Tu Lei in Yichang Source:Global Times Published: 2013-11-18 23:53:02

A production line in L'Oréal's makeup factory in Yichang Photo: Courtesy of L'Oréal

A production line in L'Oréal's makeup factory in Yichang Photo: Courtesy of L'Oréal

Paris-based cosmetics giant L'Oréal Monday said that its factory in Central China's Hubei Province has officially started operation, and it will be the largest makeup production plant in the Asia-Pacific region.

With an area of about 70,000 square meters and an investment of more than 200 million yuan ($32.83 million), the production base, located in Yichang, will produce 250 million units of products annually.

According to Alexis Perakis-Valat, CEO of L'Oréal China, the expanded plant will produce six brands including L'Oréal Paris, Maybelline, Yue-Sai and Garnier, and half of the plant's output will be for the Southeast Asia, Japan, South Korea and New Zealand markets.

L'Oréal has 42 factories worldwide, including two in China. The other Chinese factory is in Suzhou, East China's Jiangsu Province.

Alexis declined to give an exact consumption figure for its makeup products in China, but said that Chinese women buy less than one makeup product per year on average, compared with three for women in the US.

Feng Jianjun, an independent cosmetics marketing expert, told the Global Times on Monday that the market size of the makeup industry in China last year was 40 billion yuan, with 30 percent belonging to brands under the L'Oréal group, and the rest being shared among more than 200 brands from different companies.

"L'Oréal has mapped a good product line from high- to low-end compared with competitors," Feng said, adding the group has led the market in terms of skincare, makeup, male skincare and hair-dying products in China.

According to the L'Oréal group, sales in China reached 12.05 billion yuan in 2012, the 12th consecutive year of double-digit growth. 

In the company's latest fiscal report released last month, the sales of the L'Oréal group in the Asia-­Pacific region declined by 1.2 percent in the third quarter of this year.

However, the company said that the group is maintaining good momentum across all of its new markets, particularly in China, India, Brazil and Russia.

"The makeup industry is one of the answers to boost the performance of China," Alexis said.

"L'Oréal has passed a fast development period in China compared with previous years," Wu Zhigang, chief marketing consultant at Sense Beauty Diffusion, told the Global Times Monday.

The group needs to diversify its products to boost its sales, instead of promoting its core products as before, Wu said.

In August this year, L'Oréal said it plans to acquire Chinese facial mask maker Magic Holdings International Ltd, and the deal is waiting for approval from the Ministry of Commence.

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