Nivea commissions first Indian factory at Sanand

Personal care company Nivea India Pvt Ltd, an affiliate of German cosmetics major Beiersdorf AG, has commissioned the first phase of its first factory in India, at Sanand near Ahmedabad.

Stefan De Loecker, executive board member at Beiersdorf, and Rakshit Hargave, managing director of Nivea India, said the plant would allow Nivea to make its products more affordable. "We will be localising a lot of packing material as well," said Hargave.

Of the total investment of 120 million euros (close to Rs 850 crore) over three and a half to four years, the factory has seen around 30 per cent spent on the phase commissioned on Tuesday. It was inaugurated by Germany's ambassador to this country, Michael Steiner.

In its first phase, the plant's annual capacity is a little over 100 million units, making emulsion products like creams, lotions, shower products and lip care, Hargave said. It will not make deodorants.

While the initial plan is only to support the Indian market, the location will make it possible to significantly increase the capacity for the growing markets of both this country and the South Asian region, said Hargave. "The (annual) Indian market size for skin care and deodorants is over Rs 6,000 crore," he added.

Loecker said a regional development laboratory had also been set up at the site, to innovate for consumer needs here and in neighbouring markets. "The idea is to get closer to the consumer and to respond faster to market needs," he said.

In the near future, Nivea India will also be aiming at India-specific products, said Loecker. "We can focus on local insights with greater flexibility and develop products suitable for Indian skin care needs. Our aim will be to provide products of the highest quality that are aspiration yet accessible for the growing Indian middle class consumer," he stated.

"There are already 40 German companies in Gujarat," said Steiner. "We should and we will have more companies in India. The construction time of the plant was estimated to be 18 months but it has come up much quicker. This will encourage other companies to come here."