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L’Oréal’s new R&D facility is part of plans to quadruple Indian sales

By Simon Pitman , 15-Jan-2013
Last updated on 15-Jan-2013 at 13:15 GMT

L’Oréal has inaugurated a new Mumbai research hub at the end of last week, which is part of plans to target significant growth in the India market, the company says.

The company says it plans to invest a total of €140m (Rs 970 Crores) in the hair and skin care research facility between 2011 and 2016 as part of plans to significantly expand its footprint in the market.

Paul Agon, Chairman and CEO of L’Oréal says that the investment is part of ambitions to grow sales to Rs70 billion by the year 2020, effectively quadrupling sales.

Investment creates a sixth global R&D hub

The facility is the company’s sixth global R&D hub and includes both a product development center in Mumbai and an advanced research center in Bangalore.

By the end of 2013 it will employ more than 100 Indian researchers and scientists specializing in the areas of physical chemistry, organic chemistry, analytical chemistry, biotechnology, chemical engineering, physics and biology.

The facility in Mumbai has a surface area 5,000 square meters, with activities to be focused on specific knowledge of Indian hair and skin derived from clinical trials.

It will focus on the development of hair and skin care products, together with hair color, color cosmetics and personal hygiene.

Bangalore facility to focus on advanced science

The Bangalore facility is situated in Whitefield and is approximately 2,000 square meters of premises that will be devoted to the exploration of phytochemistry, biotechechnologies and bioinformatics that will be translated into searching out solutions to pigmentation disorders, scalp concerns and hair breakage.

In addition to this, the company says that the Banglaore facility will also be focused on decoding Ayurveda roots using biological, chemical and analytical methods.

“With one of the highest growths of the Group in Asia Pacific, India is a key contributor to L’Oréal’s objective of reaching one billion new consumers. The R&I Center in India reflects our confidence in the great potential of the Indian market and our strong commitment to the country,” said Agon.

“It is in line with L’Oréal’s universalization strategy of adapting our global brands to each culture’s specific needs.”

Targeting Asia Pacific to maintain overall growth

Back in September last year, the company had already said it was targeting the Asia Pacific market to help prop up slower growth in developed market, while singling out both China and India as the core markets.

In the first half of last year, the company financial results showed that its new markets, which includes Africa and the Asia Pacific region, were the leading source of growth for the company, accounting for 40 percent of total revenues.

Those results showed that cosmetics sales in India grew by 26.4 percent to €101.5 million and rose 17.1 percent to €576.7 million in China, making them the two fastest growing markets for that period, despite a continuing global economic slowdown.

“India and China will be a priority for the group. The potential for growth in these countries is considerable,” said Agon.

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