11 Mar 2022 16:54
MOSCOW. March 11 (Interfax) - Avon is considering possibly relocating its production from Russia to Poland, the maker and seller of cosmetics and perfumery said in a statement.
"Our Russian factory provides supplies to Russia, as well as to Eastern Europe. We are considering relocating production to Poland in order to supply these markets," the company said.
However, relocating production from the Russian factory could entail short-term costs and lead to long-term increases in cost of sales, Avon warned.
Moreover, ensuring supplies of raw materials and components, as well as finished products in Russia, could require additional measures from the company. Otherwise, interruptions in production could occur.
Avon's Russian press service said that the company is continuing production in Russia, supporting its representatives. Avon sells its products through direct sales.
"We are continuing production in Russia, supporting our representatives. We believe this is an important step in support of women whose wellbeing directly depends on business with Avon and believe that restricting access to product sales will have a truly negative impact on women and children," the press service said.
Export of products from Russia has been halted, and supplies to countries of Eastern Europe will go through Poland, it said.
Avon's factory in Russia is the second largest in Europe, with 800 brand name products produced in Naro-Fominsk, including shampoo, gel, lotion, roll-on deodorant, cosmetic cream, and perfume.
According to the SPARK-Interfax analytical system, Avon Beauty Products Company LLC saw revenue decline 13% to 21.8 billion rubles to Russian Accounting Standards in 2020, while net profit rose 11.4% to 1.6 billion rubles in the period.
