In a bid to give a fillip to ‘price conscious’ urban Indian consumer with a future outlook towards its existing presence in the SAARC, Middle East and African regions in future, global skin care brand Nivea opened its first manufacturing plant in India at Sanand on Tuesday. Nivea India – an affiliate of Beiersdorf AG, a global cosmetic giant will in the first year produce 100 million units at the Sanand facility measuring more than 70,000 sq meters, which came up in a record time of ten-and-a-half months, with an investment of Rs 850 crores.
The ‘modular’ Sanand facility, equipped to produce most of Nivea’s product in India and help bring the brand closer to consumer, also has an RDC (Regional Development Centre) that will work on developing all existing product portfolio of Nivea, specific to the demands of the Indian market.
“The Indian consumer has specific needs and wants products at affordable prices. We want to be able to respond to every consumer’s needs and thereby bring prices and production close to the consumer in India. This plant should allow us to produce some products at cheaper prices in the size they (consumers) want without compromising on the quality. This will bring prices down to an affordable level and products will be available in pack sizes that are smaller, at out of the pocket price points. Consumers who were not buying Nivea products, will now have an opportunity to buy it. We will start by producing 25 to 30% of the range of our products portfolio here,” said Stefan De Loecker, Executive Board Member Beiersdorf AG.
Sharing expansion plans for the Sanand facility, Loecker added, “While the company has investment plans of 120 million Euros, in the current phase around Rs 850 crores (30%) has been invested in the plant. We will dedicate the R&D facility here to serve local needs of India. Going forward it will cater to Middle East and Africa with specific products to accelerate the business we have in this regions.”
Pegging the market size for skincare range of products including deodorants, face creams, body lotion for both men and women between Rs 4000 to 6000 crores, Rakshit Hargave MD, GM-MU India Region – Beiersdorf said, “We will be primarily be producing emulsion products here like cremes, body lotions, body washes. No deodorants or soaps will be manufactured here. Over the next 3-4 years, our current capacity will multiply and we will produce more SKU’s (stock keeping units) and more products. We are not planning to export from here as of now. The plant has the capacity to serve SAARC markets in near future. We are currently not tapping rural India and are looking at playing in the urban India segment which consists of top 1000 towns, Tier 2 cities and Indian metros. Currently we have a built-up plant space of about 35 to 40 % space and will add up more in the next couple of years,” said Hargave added that while e-commerce portals were an important channel for the brand, the sales figures emanating from their sales were small.
The facility currently employs 350 people, a majority of whom hail from Gujarat and are on payroll, alongwith a few contractual workers. Emphasizing the renewed interest of German firms looking to invest in India, Germany’s Ambassador to India -Michael Steiner who was present at the inaugural event at Sanand, said “We have more than 1800 companies in India present and in Gujarat its already 40 companies and I think we should have more and we will have more companies being present here and taking part in the revamp of India. On this visit, I met the Gujarat CM Madame(Anandiben) Patel yesterday. She said that Gujarat should become a model state to cooperation between Germany and India in skill development.”