Own manufacturing
Oriflame produces 60 percent of its cosmetic product volumes in its internal facilities. A new factory is under construction in Noginsk 45 km east of Moscow in Russia for production of body care and toiletries.
Warsaw, Poland
• Skin Care
• Body care/toiletries
• Colour Cosmetics (colour emulsions)
Ekerö, Sweden
• Toiletries
• Fragrance
Moscow, Russia
• Lipsticks
• Lipglosses
Noida, India
• Skin Care
• Body care/toiletries
• Colour Cosmetics
Kunshan and Beijing, China
• Skin Care
• Body care/toiletries
• Colour Cosmetics
• Wellness
External manufacturing
Oriflame buys 40 percent of the annual sales of cosmetics prod-ucts from external suppliers, mostly products that require specific techno-logy, such as some Colour Cosmetics (eye pencils), Skin Care (capsules), Wellness products, Personal & Hair Care (bar soaps) as well as some specific fragrance products.
The third party suppliers are mainly located in Europe. Every year, a few new suppliers are added and some are removed. In 2010 and 2011, there has been a specific focus on adding more suppliers in the CIS region in order to cut lead-time and reduce total landed cost.
Accessories products are purchased exclusively from third party suppliers, primarily in China.
Group distribution centres (GDCs)
The Group Distribution Centres (GDCs) are logistics hubs that include pick & pack, serving individual customers and end consumers in certain markets. Today Oriflame has such Group Distribution Centres in Warsaw, Poland, in Kiev, Ukraine and in Budapest, Hungary. Oriflame intends to establish more Group Distribution Centres to further improve the supply chain.
Catalogues
The catalogues come in four regional versions and 40 languages. The art work is done in Stockholm, Sweden, Bangkok, Thailand and Santiago, Chile. Most catalogues are printed in Kiev,Ukraine, Warsaw, Poland and Santiago, Chile.
CIS
• Russia (printed in Finland)
• All other CIS markets (printed in Ukraine)
EMEA
• Romania (printed in Romania)
• Egypt (printed in Egypt)
• Turkey (printed in Turkey)
• All other EMEA markets (printed in Poland)
Latin America
• Latin America (produced and printed in Chile)
Asia
• Printed locally in all the different markets
| Oriflame Annual Report 2010
CIS & Baltics
CIS & Baltics – including the former Soviet republics and the Baltic countries – is Oriflame’s largest region and accounts for 57 percent of Oriflame’s total sales. In 2010, sales grew by 11 percent in local currency. The average sales force amounted to 2.1 million sales consultants. Sales growth was particularly strong in Ukraine, Kyrgyzstan, Belarus and Mongolia. Russia, which is the largest market in the region, increased sales by 6 percent in local currency. The market environment was more unpredictable during the second half of the year, when also temporary product registration issues in Russia affected sales negatively. However, campaigns, well received product introductions and gradually improved service levels during the year positively impacted sales growth.
Asia
The Asia region represents 10 percent of Oriflame’s sales, with operations in eight countries. In 2010, sales grew by 15 percent in local currency while the average sales force increased by 10 percent to more than 450,000 sales consultants. Sales momentum was particularly strong in India, Indonesia and China. The Iranian operations closed down in August. Like-for-like, excluding Iran, sales growth were 16 percent in local currency.
Latin America
With five markets – Chile, Colombia, Ecuador, Mexico and Peru – Latin America is the smallest of Oriflame’s regions and fast-growing. Latin America constituted 6 percent of total sales for the year. All markets in the region showed strong growth during 2010 and sales grew by 18 percent in local currency over the year. The average number of sales consultants increased by 12 percent to around 150,000. Oriflame continues to invest in better infrastructure and implemented a three-week catalogue cycle in the region in June.
EMEA
The EMEA region – Europe, Middle East and Africa – accounts for 27 percent of Oriflame’s total sales. In 2010, sales in local currency were unchanged compared to last year, while the average number of sales consultants increased by 4 percent to approximately 800,000. The best performing markets during the year were Turkey, Hungary and Morocco. The macro conditions in the central and southern part of Europe were difficult during 2010.
