L'Oreal expands factory, bets on future in China

Cosmetics giant aims to increase product line for domestic market

L'Oreal products in department store.[Photo/China Daily]

L'Oreal Group announced Monday that its Tianmei plant in Yichang, Hubei province, will be the largest makeup production center in the Asia-Pacific area after two years of extensive renovations and upgrades.

Costing more than 200 million yuan ($32.8 million), the wholly owned plant's production capacity exceeds 250 million pieces a year, the company said.

As the world's largest cosmetics group, L'Oreal operates 42 plants globally. In China, it not only operates its Yichang plant but one in Suzhou, Jiangsu province, as well.

In 2012, L'Oreal's revenue reached 12.05 billion yuan in China, maintaining double-digit growth for a 12th consecutive year. It provides skin care and cosmetics products under 21 brands in China.

"The expansion of this plant is one of our most important strategic moves here in China, demonstrating our continued confidence in the long-term prospects for China and the Asia market, as well as our commitment to sustainable development," said Alexis Perakis-Valat, L'Oreal's executive vice-president for Asia Pacific and L'Oreal China CEO.

According to Perakis-Valat, the Yichang plant is manufacturing products for six in-demand brands, including L'Oreal Paris, Maybelline, Yue-Sai and Garnier, plus CCB Paris and Agnes b, which have not yet been introduced to the China market.

In addition to serving the domestic market, half of the plant's output will be exported to France and key Asia-Pacific markets, including Southeast Asia, Japan, South Korea and New Zealand, as L'Oreal attacks its goal of winning 1 billion new customers globally, Perakis-Valat said.

L'Oreal also moved its Asia-Pacific headquarters to Shanghai in July, further signaling China's importance.

"By having this plant in China, with half of production for export to mature markets with the highest of standards, we set the bar very high for the production lines, which is good for the reputation of made-in-China products and also good for Chinese consumers," Perakis-Valat said.