Oriflame inaugurates Russian production site

Late last year the cosmetics maker announced that it had completed the commissioning process for the new site​, which comprises production facilities, warehousing and a distribution center.

The plan is to produce shampoos, deodorants, liquid soaps, lipsticks and other cosmetic products to serve consultants and consumers in a more efficient way.

Milestone​

“The launch of our new factory in Noginsk is an important milestone for Oriflame, as the Russian market is, and will continue to be, essential for the company,”​ says Magnus Brännström, CEO and President.

The Oriflame boss explains that the opening of the large production site will further support the company’s sales and development in Russia and CIS.

“In addition, we are of course happy to contribute to the creation of hundreds of jobs in the area. We work hard to increase efficiency of our production and distribution in order to offer our consultants and consumers innovative quality products at affordable prices,”​ he adds.

Logistics​

In order to consolidate production and logistics in one place, the company’s former site in Krasnogorsk was sold to X5 Retail group in October 2014, and the production of lipsticks was moved to Noginsk.

Oriflame’s facilities in Noginsk are built on a 26 ha land plot, owned by the company, and with significant focus on sustainability, it says.

The environmental-friendly distribution centre spans 42,000 sqm, and is LEED certified (silver level), being the largest industrial facility with such a certification level in Russia.

Tax probe​

The news of the new factory inauguration is a welcome nice change to recent reports coming out of Oriflame recently, after several years of ongoing tax investigation in Russia, there has been an announcement at the first level of tax court and the decision was not in favour of the company.

Oriflame has received an official claim of RUB 1.0 billion (approx €17.5 m) from the authorities relating to royalty payments including income tax, VAT and penalty for the years 2009 and 2010.

“The decision is surprising and disappointing as such court decision implies that there is no recognition of royalty charged for commercial values that are created elsewhere in the Group and that are necessary for the local Russian entity to carry out its operations,”​ says a company statement.