Oriflame pitches India as profit, production hub

Monday, 28 June 2004, 07:00 Hrs
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NEW DELHI: India is to become a major production and profit centre for Swedish cosmetic giant Oriflame.

"We are looking at around 20 percent growth in India in 2004 and we can proudly say that the top three growth branches for Oriflame in Asia lie in India," Mattias Borjesson, Oriflame regional marketing manager (Asia), told IANS.

As part of a new global marketing strategy, Oriflame is repositioning and redefining its brand. One crucial point of the strategy would be to use its factory in Noida, on the outskirts of the capital, as a production hub for Asia.

"The factory will serve Asian markets like Indonesia, Thailand and Sri Lanka," said Borjesson, who would soon be based in Delhi.

At present the 330-million ($7.3 million) factory makes India-specific products for national consumption but after the reworking, which will take about six months to a year, it would be designated a regional production hub.

Oriflame now has around 400 products on its line, which will be extended to around 600 in one year, and most of these products would be made at Noida for selected Asian markets.

From the time it entered India, Oriflame, which pitches itself as a "natural" cosmetics company, has invested around 550 million ($12.2 million) in the country. It has 11 service centres in India.

"We recently opened two new service centres in Mumbai and Lucknow with an investment of 7 million ($155,000)," said Borjesson.

"Also, we plan to open two more such centres in Kolkata and Bangalore that would cost us around 8 million ($177,000)."

It also plans to develop some India-specific products like hair oils.

"Hair oils are not part of our products anywhere else in the world," said Borjesson. "But we are planning to introduce hair oils specifically for the Indian market."

In 2003, Oriflame exported products worth 210 million ($4.6 million) - a figure based on the actual cost of products, excluding any taxes applicable in different countries.

The company has branches in 58 countries. Borjesson said India is the second biggest Oriflame market in Asia after China.

Last year, the company had a global turnover of 650 million euros ($788 million). However, it refused to reveal its market share and profit margins in India.

Source: IANS
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