Saturday, May 4th, 2013
SEOUL, KOREA - Cosmax Inc., a cosmetic material supplier without a consumer brand, has bought a cosmetics plant in Ohio, the United States.
The original design manufacturer in cosmetic products said on May 2 it has acquired a plant in Solon, near Cleveland, owned by the L'Oreal Group of France, the world's largest cosmetics and beauty company.
The Solon plant, located in a 29,750-square-meter site, has a capacity of producing 100 million foundations and color cosmetics in a year. It was reported the purchase price was US$11 million. Cosmax will take over the plant with the cash from the retained earnings and bank loans.
The company will produce powder products from the latter part of this year. Once the operations are up and running, it will also begin producing skin care products. A Cosmax official said, "If we make cosmetics in the United States for use domestically, we can save a significant amount of transportation cost while at the same time enjoying the prestige effect of being made in the U.S.A. We can also expect more exports to Latin American and European markets in the future."
L'Oreal, the former owner of the plant, wants Cosmax to supply all of the Solon plant's output to it. If the supply arrangement works out as hoped for, Cosmax will be able to realize a 20-billion-won sales revenue in 2014, followed by 60 billion won in 2015.