The company is investing in a construction of a new flavor and fragrance production and R&D facility in Chennai, Tamil Nadu, in an effort to be strategically placed to increase its presence in the market there.
The facility will be state of the art and will entail a $10m investment to develop a total site area covering 20,000 square metres of land which is scheduled to be operational by financial year 2014.
The company is targeting double-digit growth in demand for fragrances used in the cosmetic and personal care market as a whole, but more specifically it is also hoping to tap in to even more dramatic growth in the country’s market for the fragrance category.
Facility will enable the full production process in India
The investment in the new facility will help to provide a high supply capacity, by enabling the full creative, application and research and development processes involved in ingredient production.
The investment in the facility is also being developed with the dual function of supplying both the domestic India market, as well as the global fragrance and flavour markets.
“This investment is a part of our global strategy to achieve our long-term goal of becoming one of the world’s top flavor and fragrance companies by focusing on growing market, strengthening our organization, and growing our business.”
Tapping into demand for fragrances in India
Demand for fragrance ingredients and more specifically perfume and fragrance products is expected to continue in India on the back of record-breaking economic growth.
The latest research carried out by the market analyst RNCOS states the fragrance sector in India is forecast to grow at a CAGR of approximately 20 per cent between 2011 and 2014.
The double digit growth for fragrances puts the cosmetics industry on the road to healthy growth, which is estimated to have a CAGR of approximately 17 per cent for the same period of time.
Boom being driven by rising incomes and changing spend patterns
The boom in both the industry and the sector is thanks to changing lifestyles, an increase in disposable incomes and the rising influence of media and western culture in the country.
The rise in disposable incomes has been a result of the increasing population of working men and women; with women’s fragrances dominating the market, which has presented the big cosmetics players with an opportunity to target this demographic.
According to the report,“female fragrances were found to contribute majorly to the overall sales of the Indian fragrance market”.