Oriflame Romania, the local branch of the Swedish cosmetics producer, expects sales to go up 14% in euros in 2004, following last year's 3% growth.
Moreover, the company is planning to invest 2.5-3 million euros in a distribution centre based in western Romania. The company, which distributes cosmetics through direct sales, saw 21.7 million euros in turnover last year. Consequently, turnover will revolve around 25 million euros this year if the company's estimates are accurate.
"We had a weaker year in 2003 as the consumers went for durable goods, which benefit from sales in instalments. We were also hurt by the opening of new supermarkets, which ate away at the direct sales market, and by the euro's sharp appreciation against the Romanian currency. But consumption will surge again this year," Oriflame Romania general manager Monica Tatoiu said.
The company saw an operating profit rate of 6% last year, versus a tax loss of 23 billion ROL, mainly triggered by the fluctuating ROL/EUR exchange rate.
Perfumes were the best-selling products last year, accounting for 25% of the total sales, followed by shampoos and foot care products.
Oriflame Romania will focus on the cosmetic cream segment this year, planning to introduce five or six new ranges.
"The market welcomes new products. Besides, we are seeing fast expansion in the rural areas due to direct sales," Tatoiu also says.
Oriflame's main competitors on the Romanian market are Avon, L'Oreal, Beiersdorf and Nivea. The Romanian cosmetics market is estimated at 200 million euros annually.
georgiana.stavarache@zf.ro
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