Avon Announces Largest R&D Investment in Company's History
More Than $100 Million Increase Seen for 2002-2005
May 23, 2002
State-of-the-Art R&D Center Planned
NEW YORK, May 23 /PRNewswire-FirstCall/ -- Avon Products, Inc. (NYSE: AVP) today announced that it will increase its investment in research and development by more than $100 million over the period 2002 through 2005. Avon said this will be the largest R&D increase in the company's 116-year history.
The higher level of R&D investment is an integral part of Avon's strategy to strengthen its position as a world-class beauty company and deliver innovative, technology-based products to drive growth of its global beauty business. The focus on R&D supports Avon's plans to aggressively increase its beauty sales and market shares by accelerating new product development and expanding its product testing and overall scientific capabilities.
Avon said the centerpiece of its R&D investments will be a new state-of-the-art R&D center to replace its current R&D facility in Suffern, NY. While the company hopes to construct the new facility in the general vicinity of the Suffern site, a final decision on its location will be made at a later date following discussions with various state, county and local officials regarding financial and site plan considerations. Avon said that it intends to start construction in early 2003 and complete the new facility by early 2005.
Andrea Jung, Avon's chairman and chief executive officer, said, "Today's announcement illustrates how we intend to leverage the benefits of our Business Transformation initiatives to free-up resources to reinvest for future growth. The expanded commitment to R&D will enable Avon to continue to increase its market share by creating exciting new products for women utilizing leading-edge technologies.
"A new world-class R&D facility will play a critical role in helping Avon meet escalating consumer demand for science-based beauty products," Ms. Jung added. "One of Avon's strengths has been its ability to develop innovative, breakthrough beauty technologies for the mass market, including our highly successful line of anti-aging skin care products. This new facility will ensure that we build on our leadership position on a global scale well into the future," she said.
Ms. Jung also noted that Avon's latest commitment to R&D follows steadily increasing budgets in recent years. From 1997 through 2001, Avon increased R&D spending by 11%, compounded annually, to a level of $46 million last year, according to Ms. Jung.
Avon is the world's leading direct seller of beauty and related products, with approximately $6 billion in annual revenues. Avon markets to women in 143 countries through 3.5 million independent sales Representatives. Avon product lines include such recognizable brands as Avon Color, Anew, Skin-So-Soft, Advance Techniques Hair Care, 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 http://www.avon.com/.
SOURCE: Avon Products, Inc.
Contact: Media - Victor Beaudet, +1-212-282-5344, or Investors - Renee
Johansen or Rob Foresti, +1-212-282-5320, all of Avon Products, Inc.
Company News On-Call: http://www.prnewswire.com/comp/079575.html
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