Avon Builds $40 Million Manufacturing Plant in Russia

Avon Products, Inc. is starting construction of a $40 million manufacturing facility near Narofominsk in the Moscow region to support the rapid growth of the company’s beauty business in Russia.

The 250,000 square-foot plant will employ more than 800 workers and produce 185 million units of cosmetics products, including creams, lotions, mascara, roll-on deodorants and fragrance colognes. The plant is expected to begin operations in mid-2004.

Executives said products manufactured at the new plant will be sold in Russia through the country’s 194,000 independent sales Representatives, as well as in Avon’s markets in the Ukraine and Kazakhstan.

“Russia is one of Avon’s fastest growing markets, and the new manufacturing facility will enable us to meet the rapidly escalating demand from the nation’s vast population of sophisticated beauty consumers,” said Susan J. Kropf, Avon’s president and chief operating officer. “The facility also will leverage the cost and efficiency benefits of a more localized supply chain, and help strengthen our competitive advantage in this high potential market.”

Avon began direct selling in Russia in 1995 in the Moscow region, and since then, operations have expanded throughout European Russia, Ural and Western Siberia. The company’s 2002 sales in Russia were $142 million, up from $22 million in 1999. The company expects sales to increase to $500 million in 2007.