Growth potential leads to investments in Poland

By Simon Pitman

- Last updated on GMT

Related tags Skin care Cosmetics Poland

The continued growth and development of the cosmetics and
toiletries market in Poland has led to a rash
of investments in recent months, involving both domestic and
global players.

As the market continues to evolve, consolidation and further investment are progressing at a pace that is transforming the landscape of this once sleeping industry. Most recently domestic player Kolastyna, a leading cosmetics company, has reported that it intends to buy up several new brands from the portfolio of PZ Cussons Polska, according to publisher PMR. The company is said to have signed an agreement valued at PLN27m (€7.1m) to buy up the new lines, which will help to boost its body care brands, as well as its perfume and aftershave lines. The move is part of Kolastyna's aim to increase its share of the market from 5.7 per cent of the Polish cosmetic and toiletries market, to 10 per cent during the course of the next three years. Likewise, another domestic rival company, Dr Irene Eris, says it will spend up to PLN33m to up-date its production facilities at Piaceczno, near Warsaw, in an effort to keep up with demand that is growing at 20 per cent annually, according to Portal Bizenesowy. The company is investing extensively in the domestic spa market and at the beginning of September announced the acquisition of JB Cosmetics Comindex Group. Domestic players are battling it out in the face of strong competition from the main global players, who are all trying to tap into growth that exceeds 3 per cent annually, backed up by a higher than average national spend. "Domestic skin care brands are very popular among Polish customers,"​ says a current Euromonitor report on the Polish market. "They have a long history and are valued for their reasonable quality to price ratio."​ The report goes on to highlight how domestic players are investing in the newest technologies to try and keep up with investments being made by the international players. However, investments by the big names are significant, with the world's largest personal care player, Procter & Gamble, constructing of a €35m factory to produce Olay skin care products at a site near the town of Alexsandrow Lodzki, in central Poland. Production is due to begin in 2009 and the factory is expected to produce 30 tons of cosmetics a day with a workforce of up to 300. Recently the two largest European cosmetic and personal care players - L'Oreal and Beiersdorf - have both announced strong quarterly results that were highlighted by an outstanding performance in the Polish market, suggesting that significant gains are expected in the market during the course of 2007. Euromonitor currently estimates the Polish cosmetic and toiletries market to be worth an estimated €2.46bn, and highlights potentially strong growth in the skin care, baby care, men's grooming and deodorant categories.

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