Premium Beauty News - You’ve just announced a new acquisition. Can you comment on it and put it into the current economic context for your Group?
François Luscan - We have indeed announced the signing of a Share Purchase Agreement in order to acquire Tubapak, a Moscow-based company that makes plastic tubes for the Russian beauty market. As you know, we want to be able to support our customers as they develop new products and win new business. Russia has one of the world’s highest growth rates in beauty; some of our customers already have bases there and others are thinking of it. So it was important for us to offer them a local industrial base.
The site will initially be developed in plastic tubes, with the support of the local teams and with machine and expertise transfers from our European network [editor’s note: Cebal], but we are considering evolving the site into a full industrial platform soon, i.e. to also serve our make-up, fragrance and skincare markets.
Premium Beauty News - Looking at the latest “product” press releases in line with Luxe Pack New York, it’s clear that your strategy, based on “product innovation” among other things, has picked up speed in recent months, particularly in the mascara segment. What do you think of that and, above all, is it paying off as much as you thought it would?
François Luscan - Beauty is a market where innovation rules and where the pace is set by new product launches. So yes, innovation is a pillar of our strategy, just like the operating performance of our global network and our more recent commitment to sustainable development. Innovation covers products when we think up new packaging solutions, manufacturing processes when we enable our customers to realize their imagination or improve the performance of our packaging and, finally, service when, for example, we offer full service or kitting, i.e. a comprehensive solution including case, pack, bulk, filling, assembly and delivery.
To answer your question about mascaras, it’s a market that combines design in terms of the bottle, technology in terms of the brush, whether fiber or plastic, and great general expertise to ensure that everything corresponds perfectly to our customers’ bulk. In other words, it demands product, process and service innovation! On this market, we have a leadership position so we have to innovate constantly... by broadening our stock range and developing new products with our customers.
Premium Beauty News - Alcan Packaging Beauty’s other obvious strategic axis is to be in first place in terms of information and innovation on the environment and sustainable development. Various conference venues around the world have heard contributions from your colleagues in recent weeks. Could you describe your “personal vision” on the subject and, above all, tell us how far you want to go?
François Luscan - My view is that businesses today as economic players and their people as active citizens have a collective and individual responsibility to think about tomorrow too.
This is my conviction and it is shared by my teams. We are lucky to be part of a major group, Rio Tinto Alcan, that has long been involved in Sustainable Development. For Alcan Packaging Beauty, that means we have efficient tools and programs giving us good knowledge of our activities’ and products’ impact on the environment and on our communities. But I believe above all that the originality of our approach is to try to set up partnerships, with some major customers of course, but also with some suppliers, communities and maybe even competitors. Sustainable Development concerns the entire value chain or, to use an expression I’m fond of, the responsibility chain. So we have to work together on common ambitions and goals.
Premium Beauty News - A significant current trend comes from “health & beauty” trade: the growth of subcontracting, from cosmetic components through filling via packaging. The notion of full service seems to be increasingly important to your customers. What do you think of that and what do you intend to do in this area? Plainly speaking, is your group tempted to broaden its offering towards this kind of service?
François Luscan - We have been offering full service for several years now. We first developed the offering in the United States and we’re currently organizing the global rollout of those skills. Moreover, we’ve just brought out a complete line of make-up bulks called Be Organic, with the Eco-Cert label, that we’ll present officially at HBA in September.
An even more daring move is to develop kitting, which consists of offering our customer a complete solution that can include case, packaging, bulk, filling and assembly. A classic example is the promotional kits marketed for Mothers’ Day or Christmas. The travel kits distributed by airlines are another example and we are honored to make the kits given out on Air France flights, which come under this complete solution rationale.
Premium Beauty News - On the economic front, mid-2008 looks mediocre. Is this due to the effects of the global economic crisis or is it the classic downturn in a sector that broke records in recent months? In a word, is it lasting or temporary? And what are the industrial implications for you over the coming months?
François Luscan - The first half of the year showed overall growth, albeit firm rather than spectacular. The second half looks tighter, as beauty markets are inevitably affected by the difficulties facing their consumers around the world. Of course, this is more the case on the major historical markets of Western Europe and North America than the more dynamic sectors of Asia, Latin America, as well as Eastern Europe and Russia. These disparities obviously favor truly global players that are supported by growth in certain local markets or can move part of their production to a zone with a more favorable exchange rate.
Unfortunately, I don’t have a crystal ball that lets me predict the duration of the slowdown. Like everyone, customers, manufacturers, suppliers and especially consumers, which we all are, I hope we get back on track for growth soon. But tomorrow is prepared today... Our acquisition in Russia reflects that approach, as does our capital expenditure on innovation and industrial competitiveness. We want to be ready to support our customers when they step up their development projects again!