Avon Starts Construction of $40 Million Manufacturing Plant in Russia
Sep 25, 2003
Avon Products, Inc. (NYSE: AVP) today announced it 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.
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 sales in Russia in 2002 were $142 million, up from $22 million in 1999. The company has stated previously that it expects sales to increase to $500 million in 2007.
Avon is the world's leading direct seller of beauty and related products, with $6.2 billion in annual revenues. Avon markets to women in 143 countries through 3.9 million independent sales Representatives. Avon product lines include such recognizable brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques Hair Care, Mark, beComing and Avon Wellness. Avon also markets an extensive line of fashion jewelry and apparel. More information about Avon and its products can be found on the company's web site www.avon.com.
Cautionary Statement under the Private Securities Litigation Reform Act of 1995
Statements in this release, which are not historical facts or information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's reasonable current assumptions and expectations. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of the Company to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management's expectations. Such factors include, among others, the following: general economic and business conditions in the Company's markets, including economic and political uncertainties in Latin America; the Company's ability to implement its business strategies and its Business Transformation initiatives, including the integration of similar activities across markets to achieve efficiencies; the Company's ability to achieve anticipated cost savings and its profitability and growth targets; the impact of substantial currency fluctuations in the Company's principal foreign markets and the success of the Company's foreign currency hedging and risk management strategies; the impact of possible pension funding obligations and increased pension expense on the Company's cash flow and results of operations; the effect of legal, regulatory and tax proceedings, as well as restrictions imposed on the Company, its operations or its Representatives by foreign governments; the Company's ability to successfully identify new business opportunities; the Company's access to financing; and the Company's ability to attract and retain key executives. Additional information identifying such factors is contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, filed with the SEC. The Company undertakes no obligation to update any such forward-looking statements.
SOURCE: Avon Products, Inc.
CONTACT: Media, Victor Beaudet, +1-212-282-5344, or Investor, Renee
Johansen or Rob Foresti, +1-212-282-5320, all of Avon Products, Inc.
Web site: http://www.avon.com/
Company News On-Call: http://www.prnewswire.com/comp/079575.html
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