L'Oréal Selects Russia as New Factory Location and Source of Growth

L'Oréal has expanded into a new BRIC country—Russia—as it has opened the newest of its 38 production plants 85 km south of Moscow in the country's Kaluga region.

The company's 2009 sales in Russia totalled € 563 million, and the company's sales in Russia reportedly have tripled since 2004. In the first half of 2010, the company recorded a sales increase of 17.6% in the country.

The 10,000m2 plant was built in the Varsino industrial park, and it will manufacture mostly hair care products for the L'Oréal Paris and Garnier brands including: shampoo, conditioner and coloring products. The products will be distributed in Russia, Ukraine and CIS countries (CIS). 

While initial production will be 120,000 million units annually, the company will increase production as demand in the country increases. The plant features high-speed production lines and an advanced technology water treatment plant.

“Since 2004, L’Oréal Russia has tripled its sales in local currency. It is the eighth market for the group in terms of sales and is one of L’Oréal’s fastest growing markets. L’Oréal’s first factory in Russia will play a key role in responding to the growing demand in Russia, in Ukraine and in the CEI countries,” added Pekka Huttunen, general manager of L’Oréal Russia, in a company press release. 

Today, the L’Oréal Russia factory employs more than 60 people, and will employ up to 300 people in the future. The factory, which plans to expand according to market need, will recruit specialists from the region to adapt its production on a local level, and will use local materials and suppliers as much as possible. The factory is also currently working to develop partnerships with colleges, schools and universities in Kaluga to optimize recruitment programs.

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