A fire which destroyed one of Oriflame’s main warehouses in the vicinity of New Delhi is likely to have an effect on service levels in India in 2013 and the first quarter of 2014, according to the company.
The blaze consumed the cosmetics giant’s 4,000ft square facility on the night of November 25. Fire fighters who took the call reported that the damage appeared to be worth “crores” of rupees.
Anders Agren, VP of investor relations and projects at Oriflame India, commented to CosmeticsDesign-Asia.com that the most likely results would be “short term impact on service levels, being mitigated to the best of our ability through emergency shipments and stock of other Indian facilities.”
However, he stated that the fire would likely have “no long term effects” and would not have an impact on Oriflame’s overall corporate operations.
Additional transport costs
Oriflame has stated that effects from the fire are likely to lead to increased costs linked to freight and air shipments for the coming two quarters. However, the company is taking actions to mitigate this using other existing stock based in the region.
Agren commented: “The burnt warehouse is one of the main ones but still only represents a small part of overall sales.” He also stated that there would not be an effect on the firm’s strategy.
Oriflame has recently upped its investment in Asia and India and intends to open 200 new projects in the region in 2013 alone. It has also recently acquired a new manufacturing facility in Uttarakhand.
‘Crores’ of damage
The fire was reported late at night, with over 15 fire tenders being needed to contain the blaze. Fortunately, the site was almost empty having closed at 6pm in the evening, and no casualties were reported.
Fire Station Officer Matloob Hasan, who responded to the call, stated: “The exact loss will be ascertained by the management…The damage appears to be worth crores.”
Hasan believes that a short circuit may have started the inferno, which was especially difficult to contain because stocks of flammable cosmetics started several secondary fires in the warehouse.