L'Oreal announces new research base

The world's biggest cosmetics company L'Oreal announced on Friday the opening of a new research facility in China, the Pudong L'Oreal Research Centre.

With investment totalling 6 million euros (US$7.29 million), the centre will be one of the group's four biggest, along with facilities in Paris, New York and Tokyo.

The launch is the company's second major step in recent years, after acquiring two Chinese brands, Mininurse and Yue-sai, in 2003 and 2004. The research centre is located in Yue-sai's original factory in Jinqiao, Pudong.

Sales of the two Chinese brands accounted for 36 per cent of L'Oreal's growth in China in 2004.

"There are about 2 billion Chinese and Asian consumers around the world, catering to this group has huge significance for our company," said Paolo Gasparrini, president and general managing director of L'Oreal China.

He added that the decision to invest in the new research centre is part of a long-term global strategy.

The new facility's main mission will be to conduct and support basic science research to improve the present understanding of Chinese hair and skin.

"The main goal of this centre is to provide safe and efficient products for Chinese people," said Didier Saint-Leger, director of L'Oreal R&D China.

The 3,000-square-metre facility will comprise development laboratories focused on make-up, skincare and haircare. In 2006, the facility will expand to house biology laboratories focused on tissue engineering and chemical laboratories concentrating on utilising Chinese medicine in beauty products. By the end of 2006, more than 60 employees will work at the centre, the vast majority of them hired locally.

In the first half of this year, L'Oreal's global sales reached 7.163 billion euros (US$8.7 billion), an increase of 4.1 per cent. Sales growth in China in the first six months hit 24 per cent.

The 2004 report on the Chinese cosmetics market released by the National Bureau of Statistics suggests sales of cosmetics in China will rise by an average of 12.9 per cent over the next few years. In 2010, total sales of cosmetic products are expected to hit 80 billion yuan (US$9.67 billion).

At the moment, consumption per capita in China is only 20 to 30 yuan (US$2.4 to 3.6) compared to the world average of US$35 to US$70.

Source: China Daily