Li & Fung has already dramatically strengthened its position in the cosmetics industry with the buyout of Hong Kong based Cgroup Ltd a few months ago, then with the creation of LF Beauty - specialized in promotional items and packaging, point-of-sale advertising and full-service. But with Jackel, it acquires an industrial tool located in Southern China, near Hong Kong, where managers from Jackel had already heavily invested in recent years.
Indeed, the Jackel Group is running no less than 6 plants in China including two fully owned plants a few hours drive from Hong Kong, one for plastic injection (PCM), the other one for filling cosmetic / perfumery products, JV Cosmetics.
Li & Fung claims to be a global leader in the supply chain management, with more than 1,000 customers, US$ 14 billion in sales and over 14,000 employees operating in forty countries. In 2007, the Li & Fung had firstly bought CGroup HK Ltd (June 2007, secondary packaging, full service, promotional items), PB Beauty, UK (August 2007, private labelling of cosmetic products), then Imagine PoS (January 2008, point-of-sale advertising) and RT Sourcing (August 2008, primary packaging). Last July, the group announced the creation of LF Beauty.
Practically, LF Beauty has Sales offices in Europe (Paris, London), in the USA (New York, Dallas), and in China (Hong Kong, Shanghai), an important R&D laboratory for formulation in the UK, including product development and sourcing teams, project management and quality insurance teams for its various production facilities (Hong-Kong, ShenZen, DongGuan, Shanghai, etc…), filling units (England, China). Organized in networks, LF Beauty teams manage thousands of suppliers and industrial partners, from the product’s development to its production (where materials and components are sourced from various suppliers) and its final delivery.
Furthermore, LF Beauty can take advantage of Li & Fung global network, as the group is operating in forty countries worldwide: a strong and unique asset with a sourcing sector in constant evolution.
The Full Service axis
As far as it is concerned, Jackel’s business profile is consistent: US$ 130 million in sales. An industrial activity focusing on several poles, plastic, metal (zamac and aluminum), glass, surface treatment and, of course, the filling of cosmetics and ..., for the past two years, of perfume.
This strategy of upstream industrial integration initiated by the Jackel Group in the early 2000s will have developed itself like clockwork. The creation of Jackel France, precisely in 2000, and its exponential growth had surely something to do with it considering the healthy order backlog for packaging and requests to come in “full service” from the French Beauty industry.
With the takeover of Jackel, the Li & Fung group will be controlling directly or indirectly (factories of business partners) not only an important industrial tool in plastics, metal, surface treatment and to a lesser extent glass, but above all a powerful tool in perfumery and cosmetics formulation and filling.
Jackel’s Full Service activity had begun in 2003 in the United States with the Elizabeth Arden Group, and then Victoria’s Secret and Coty. The industrial integration in the filling segment in 2006 with the buyout of JV Cosmetics boosted this activity.
The plant can process both cosmetics, personal care products, perfume and OTC products.
Regarding make-up, Jackel offers a full range of forty formulas including a “standard” range, “les Classiques” a “mineral” range, “Les Minérales”. Main customer markets, the United States and Europe.
Jackel’s buy out is part of seven deals that Li & Fung recently signed in particular in the fashion and fabrics industry. “The deals will further solidify our market share in their respective areas and will contribute positively to our bottom-line in the long run,” said Mr. Bruce Rockowitz, President of Li & Fung (Trading) Limited.