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Brazilian direct seller Natura announced that its Argentine-based operations will double manufacturing capabilities in the near term—a decision made due to increasing Argentine government policies of reducing imports.
At present, the company manufactures 30% of its products in Argentina and aims to reach 60% by end of 2012, and Argentina remains the company’s second largest market after Brazil. In terms of growth outside Brazil, both Argentina and Chile are posting significant growth rates, said Natura president and CEO Alessandro Carlucci.
“Our business is [unique],” Carlucci told Argentinean newspaper La Nación. “When there is economic growth, sales increase because consumers have more money to spend, but [Natura, as a direct seller] also grows when there are fewer jobs because people are more willing to start projects as entrepreneurs. The perfect formula for us is one of economic growth with low employment, something that is impossible to achieve.”
Colombia Sales Up
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According to a report published in Colombian newspaper Portfolio, cosmetics production in Colombia has doubled in the past seven years. Colombians spend, on average, $50 annually on beauty care.
Consumption growth of beauty products can be directly linked to the prevalence of direct sales models, which have generated income for more than 400,000 people in Colombia. In fact, 80% of Colombian beauty market sales is led by small and medium enterprises, while the other 20% is made up by multinational companies. The majority of the revenue, however, is generated by the latter. It is also estimated that 70% of beauty products are sold in Bogotá, Medellin, Cali, Barranquilla and Cartagena. The remaining 30% is spread throughout the rest of the country.
The report notes German-based Henkel as a model of how international beauty companies are forging success in the country. The company's main offices for the Andean region are in Bogotá, and its plant has a staff of 460. Henkel also invested $1.5 million to enlarge the plant, from which it exports nearly 40% of its products to 18 South American, Central American and Caribbean countries.
New Manager for J&J
J&J’s subsidiary in Buenos Aires named Brazilian Andre Mendes its new general manager, with responsibilities for Argentinean territory as well as the Uruguayan, Paraguayan and Bolivian markets. Mendes, who held the same role in Brazil, replaces Gustavo Molina.
J&J brands have room for growth in the region, especially when compared with its performance in Brazil, as many of its Brazilian brands are not available elsewhere. In Argentina, the most relevant J&J brands are those specializing in women’s care products, such as Carefree and Siempre Libre, and the Clean & Clear and Neutrogena skin care brands.
New Home For Chilean Agency
Chile inaugurated a new building in early September 2012 to house the National Drug Agency of the Public Health Institute (Anamed). As detailed by Chile’s Public Health Institute (ISP), the building was previously used for ISP vaccine production. Anamed oversees cosmetic, pharmaceutical and medical device products in Chile, similar to the U.S. Food and Drug Administration.
Aerosol Manufacturing Expanding in Latin America
The Exal Group, which specializes in manufacturing aerosols, announced an investment of more than $58 million to build an aluminum bottle manufacturing facility in Puerto Madryn, a city in Argentina’s Chubut province. Currently, the company operates a plant in Garín, located in the province of Buenos Aires, which it acquired in 2002 from Gillette (now part of Procter & Gamble). With these facilities and production capabilities, the company ranks as the largest independent manufacturer of aerosol and liquid containers in Latin America, and Argentina is the fifth largest producer of aerosol packaging in the world.
Cristina Kroll is a business journalist specializing in the beauty sector and living in Buenos Aires, Argentina. She has written for the main Argentine magazines related to the beauty business, and was a correspondent for French magazin Beauty Business News.