said Oleg Dorin of Saint-Gobain. - CCIFR

6
RUSSIA–FRANCE
L’Oreal Adds a French Face
To Kaluga’s Business Hub
THE COSMETICS
GIANT CITES
PRETTY TAX RATES
AND HANDSOME
HELP FROM
OFFICIALS FOR ITS
DECISION TO OPEN
IN THE REGION.
By Alexander Bratersky
VORSINO, Kaluga Region — L’Oreal
Group's factory here is designed
to pump out 120 million cosmetic
products a year, hair dye
kits and bottles of shampoo to
be sold in Russia, Ukraine, Kazakhstan and
Belarus.
The factory is no small commitment. The
French cosmetics giant invested 26 million
euros ($37 million) in this Kaluga region plant,
according to L’Oreal figures.
“France is the motherland of cosmetics, but
the group had a very good and recognizable
image in Russia,” the general secretary of L’Oreal
L’Oreal’s blue-striped factory in the Vorsino industrial park. It makes hair dyes, shampoos and conditioners.
in Russia, Georges Chichmanov, said in an interview
at the Kaluga factory.
While Paris is an international center for
beauty products, the Kaluga region is a hub of
international enterprise within Russia. Joining
South Korean electronics maker Samsung, Swiss
food company Nestle and Swedish automaker
COURTESY OF L’OREAL
Volvo Trucks, L’Oreal is a case study of how and
why the region attracts foreign investment: The
local government has created a low income-tax
rate and a business-friendly reputation, drawing
foreign corporations that want to get a foothold
in Russia’s consumer market.
The L’Oreal brand isn’t new to Russian
women. But today, the company, which started
operations in Russia in 1990 through a French-
Soviet joint venture, has become one of the most
popular cosmetics brands in the country.
L’Oreal reported revenue of about 600,000
euros for 2009, the most recent year for which
the company has disclosed its Russian sales
figures. The Russian market is the company’s
eighth-largest in terms of sales, company
managers said, and L’Oreal Russia experienced
17.6 percent growth in the first half of 2010.
(Figures for 2011 aren’t available yet.)
That’s part of a widening market. Overall,
the Russian cosmetic market grew 3 percent to 5
percent last year, and it could increase another 7
percent this year, Renaissance Capital estimated.
According to marketing agency Staraya Krepost
ExpoMediaGroup, the whole of Russia’s cosmetics
market reached $11 billion in 2010.
The French cosmetics firm has made successful
inroads. L’Oreal’s advertising catchphrase
— “Because you’re worth it” — has turned into
a household phrase, used by politicians and
comedians alike. In 2004, liberal newspaper
Novaya Gazeta even used the slogan to headline
an article about minimum wage.
COURTESY OF L’OREAL