06.23.11
Want to boost market share? Look to the East. Reckitt Benckiser said on Wednesday it hopes to double Russian sales by 2016 as it tries to offset slower European and North American markets.
"Russia is the country in Europe that is generating the fastest growth. If we have a choice to invest money in Russia or any other European country, it will go to Russia," Bruno de Labarre, general manager for Russia and CIS, told reporters.
The maker of Cillit Bang cleaning fluid and Nurofen painkillers generates around 300 million euros ($430 million) in annual sales in the CIS region, of which 70% is in Russia.
"Russia is now the No. 5 country in Europe by size and number one in priority of investments in Europe .. You cannot be big in Europe if you are not big in Russia," he told Reuters.
De Labarre said Reckitt wanted to invest heavily in its health care business in Russia where average spending on health care is relatively low.
"We see a huge potential to grow because we know that as the purchasing power of the population is increasing, the spending on health care is increasing also. The health care market is growing two times faster than the household market," he said.
Combined Russian sales, including both household and health care products, are growing by around 15% each year. The company has forecast the group's overall underlying sales would rise 4% in 2011.
"The consumption is coming back... The rate of our growth was strongly down (during the 2008-09 crisis) but there was no real decrease. Yes, we had a crisis in Russia but there was no crisis if you compare to Spain, to Portugal, to Greece, to Italy," said de Labarre.
Reckitt, which also makes Air Wick air fresheners and Vanish fabric cleaners, currently has a nearly 14% share of the Russian household care product market and aims at growing it by 10% a year, de Labarre said.