Romanian cosmetics producer sees profits rocket

Farmec Cluj, one of Romania's biggest cosmetic producers has reported a 36 per cent profit increase in the first half of the year on new skin and body care products.

The company's profits for the first six months grew from €1.1m last year to €1.5m this year, the Romanian financial publication Ziarul Financiar reports.

The company says it has increased production significantly during the period, to keep in line with strong demand for its products in the country.

Boosted by skin and body care

"Sales were driven by the new skin and body care products introduced on the market during that period, but also received a boost from a series of special offers after the launch of the revamped Farmec line," said Farmec marketing specialist Mariana Sinitaru.

Interestingly, despite the rising energy and transport prices that are hitting the majority of manufacturers at the current time, the company said that its performance had not been affected by these factors.

It added that the jump in profits was largely attributable to a 30 per cent jump in turnover during the period, which came in at €11.7m.

Avon and Shiseido eye expansion

Non-domestic players like Avon and Shiseido have also been quick to profit from the growth prospects.

Avon has posted sales growth in the early teens during the last couple of years, while Shiseido moved in on the market in March of this year after concluding a distribution agreement.

The Romanian economy has been expanding rapidly, following its entry into the EU on January 1, 2007.

This move helped to fuel economic growth of 6 per cent last year, one of the highest in Europe, which has in turn been feeding significant growth in the consumer goods sector.

This year growth is expected to hit between 7 - 8 per cent, which is giving some financial experts concerns over potential overheating, especially as manufacturing costs are rising so rapidly.