Most Popular in:
Bulgarian Beauty: Resilience and Aspiration
By: Gregory Grishchenko
Posted: January 5, 2010, from the January 2010 issue of GCI Magazine.
page 2 of 3Bulgaria has a strong beauty manufacturing base—thanks, in part, to an abundance of locally processed aromatic and essential oils. Currently, more than 170 cosmetics producers operate in the country, most of which are small- to medium-size companies employing staffs of a dozen to a few hundred. Accounting for approximately 1% of the country’s manufacturing sector, the Bulgarian beauty industry employs more than 5,500 people. In 2008, the industry, for example, produced 4,500 tons of shampoo and nearly 29 million toothpaste tubes (many of which contained local herbal formulas), and there is a strong contract manufacturing base serving the multinationals.
Aroma Cosmetics ($25 million in sales in 2008) is the leading native beauty manufacturer in Bulgaria, with a history going back 85 years. An export-oriented company that sells more than 70% of its output in foreign markets, Aroma specializes in fragrances, cosmetics for men, and body, face, hair and oral care. The company, located in the city of Sofia, employs more than 600 people, and—with 11 fully-automated production lines—it plans to further modernize its technology, develop new products and expand its presence in world markets (products from Aroma are already sold in 56 countries). The company has developed proprietary formulations on its own and in cooperation with leading research groups and suppliers—notably ISP Europe, Schülke Mayr, DPV, ICI and Evonik Goldschmidt GmbH. The export line, Astera Cosmetics, has been very successful in the Russian, Ukrainian and Romanian markets. During the past 10 years, Aroma has produced private label cosmetics for European retailers Spar, Tesco, Carrefour, Ahold and Kaufland.
A privately owned cosmetics and toiletries producer with more than 110 years of experience, Alen Mak is positioned as an expert in healthy and environmentally friendly cosmetic products and fragrances. Established in 1892 in the city of Plovdiv by rose oil merchant Anton Papasov, the company was the first manufacturer of cosmetics products in Bulgaria. Throughout the years, Alen Mak has evolved into the largest domestic producer, with a prevalent export business. The company’s products are exported to more than 25 countries worldwide, with a strong position in countries of the former Soviet Union, especially Russia and Ukraine. Alen Mak has developed a wide range of reputable brands in skin care, hair styling, makeup and oral care (e.g., Bendida, Achromin, RoseMary, Caro and Pomorin). It runs state-of-the-art facilities and combines the latest developments in modern cosmetics with traditional natural recipes. In 2002, Alen Mak was purchased by Effekten & Finanz (based in Switzerland) and went through restructuring and downsizing to a current employee base of 200. Rubella Beauty A.D. (with $7.8 million in 2008) was founded more than 20 years ago in Rudozem (Rhodope Mountains). The company concentrates on skin care, hair styling, oral hygiene and makeup. Rubella supplies cosmetics to 22 countries in Europe, the Americas and Asia. With ISO9001-certified facilities, Rubella claims to be the only Bulgarian producer that acquired modern packaging technology for producing laminate tubes.
Bulgaria also has a significant number of domestic cosmetic producers with the sales in the range of $0.5 million to $1 million, and has an established offering of economy-priced brands—notably Roza Impex, STS Cosmetics, Refan OOD, Lavena A.D. and Krasnaya Linia.
Bulgaria’s Unique Position
The global economic crisis of the past two years continues to change the market for the essential and aromatic oil industry. Bulgaria still retains its leading position in rose oil extraction; however, the lower demand in the major importing countries such as France, Japan and the U.S.—as well as secondary importers in Europe, Russia, the Middle East and Asia—affect the price of rose oil. The 2008 price for 1 kg was approximately $7,000, and the country’s annual output was 2 tons. Bulgarska Roza, the principal company in this segment, produces essential oils extracted from a variety of sources (rose, lavender, salvia, hyssop, wormwood and milfoil), natural flower waters and cosmetics based on natural ingredients. The company reported a net profit of $210,000 in 2008, a notable improvement from 2007. However, in 2009, Bulgarska Roza faced difficulties due to the decreasing sales of rose oil-based products.