L’Oréal Invests €60M to Enhance Manufacturing Capabilities in France

L’Oréal invests in production. The French cosmetics group has allocated €60 million to its plant in Gauchy, northern France, with the aim of doubling its production capacity. The site, which specializes in fragrance production, is working to meet the worldwide demand for perfumes.

As Milano Finanza has advanced, the operation is part of a larger industrial plan, endowed with €500 million, to be deployed in three years. L’Oréal’s sights are set on the upcoming addition of Gucci and Balenciaga fragrances following the recent agreement signed with Kering to acquire the Kering Beauté division for €4 billion euros, which also includes Creed.

The deal consolidated L’Oréal’s dominance in the luxury segment and rekindled speculation about a possible move with Armani. The Italian firm, whose perfume and cosmetics license has been in the hands of the French group for more than two decades, could be the next acquisition target.

L’Oréal has acquired the Kering Beauté division for €4 billion and is preparing to launch new perfumes

The investment will enable the French plant to reach an output of up to 200 million bottles of perfume per year. The Gauchy site employs more than 230 people and is one of the group’s most strategic elements for export. It was inaugurated in 1986 and its turnover reached €43.4 million last year.

L’Oréal’s industrial plan covers more locations. Its Saint-Quentin plant has received €70 million to expand production and incorporate new packaging lines dedicated to skin care, with the focus on CeraVe, one of the group’s fastest-growing propositions. Another €60 million have been earmarked to reinforce the production infrastructure dedicated to dermo-cosmetics, particularly La Roche-Posay.

Despite a certain slowdown in the cosmetics industry, following the sector’s boom in recent years, L’Oréal closed the first nine months of the current financial year with sales of €32.80 billion, 1.2% more than in the same period of the previous year, up 3.4% on a like-for-like basis.

The company has improved its quarter-on-quarter performance, supported by the recovery in China and the United States, the strength of Europe and the sustained momentum of the region that groups together South Asia, the Pacific, the Middle East and North Africa. Thus, between July and September, the company achieved a turnover of €10.3 billion, 0.5% more than in the same period of the previous year.