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Monday, December 26, 2005

Esthetics profit driven by Clinelle product



AmResearch expects EIG to improve its turnover by 33% to RM66.6mil for financial year 2006. Turnover growth would come primarily from increase in sales from Clinelle

The aggressive marketing of its in-house brand, Clinelle, has raised contribution from the company's distribution division to 70% of total revenue from 60% previously.

Revenue from the provision of professional services under Leonard Drake and Belle Lina is projected to grow 7-8% annually in financial years ending Jan 31, 2007 and Jan 31, 2008 respectively via the company's distribution activities.

EIG raised prices for its Dermalogica franchise to dealers and consumers by 3% to 5% in the middle of this year due to margin erosion as a result of higher transportation costs.

While the price increases have dampened demand, AmResearch Sdn Bhd believes that the EIG management team would carry out promotions to drive sales and sustain revenue.

The company has exclusive rights to distribute Dermalogica products in South-East Asia and Hong Kong.

The company is also entitled to use the Leonard Drake trademark at its professional care service centres via its business arrangements with Dermalogica Inc., United States.

Meanwhile, the company has put on hold plans to move into the male market, despite having done a concept study for the setting up of a professional skin care centre for men under its own range of professional skin care products, Belle Lina.

AmResearch believes that this decision was prompted by a need to raise awareness of the Belle Lina brand name before attempting to venture on a large scale into the male market.

As a result of the freeze, growth in the Dermalogica and Belle Lina franchises this year and 2006 would continue to come from the opening of skin care centres in new shopping malls on the west coast of the peninsula, it added.

The company has diversified to Multilevel Marketing or direct selling by forming a new company call Lexwell. AmResearch expected growth from this division for Year Ended 2006 is negligible.

The research house has a “buy” recommendation on EIG for its attractive dividend yield, of 9% and 12% for financial years 2006 and 2008 respectively.

Update : Bright year ahead seen for Esthetics International

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Tuesday, December 20, 2005

Estee Lauder launched Tom Ford Amber Nude Makeup Collection today in Malaysia.


My blog has write about Ex-Gucci designer Tom Ford and Estee Lauder previously. But the product is not available in Malaysia then nor available to sell on Estee Lauder website.

For this Chrismas, Estee Lauder launch it Tom Ford Amber Nude Make up collection in Malaysia on 20 December 2005.

Those interested can go to Isetan at KLCC today.

Key products in the bare but somewhat pricier – prices start at RM105 for a bottle of nail polish, and RM140 for a lipstick – limited-edition collection are The Eye Gloss in Amber Black and The Face Gloss in Amber Nude – light, creamy tints that are meant to be layered on for a subtly polished or intense look.


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Monday, December 19, 2005

Kao USD2.4billion concluded deal with Kanebo


Dec. 16 (Bloomberg) -- Kao Corp., Japan's largest household goods maker, said it will buy Kanebo Cosmetics Inc. for 279 billion yen ($2.4 billion) from a government bailout agency to boost earnings in the world's second-biggest cosmetics market.

Kao and three buyout funds, Advantage Partners LLC., MKS Partners Ltd. and Unison Capital Inc., submitted the highest bid, according to statements released today by the Industrial Revitalization Corp. of Japan and Tokyo-based Kao.

Acquiring the maker of T'Estimo lip gloss and Revue foundation will triple Kao's sales of makeup and help it challenge Shiseido Co. in Japan's $12.4 billion cosmetics market. Kao plans to complete the transaction in February. Kao said it will also use Kanebo to expand in Europe and the U.S.

"Kao's growth potential in cosmetics'' was limited because it lacked strong brands, said Keiko Yamaguchi, an analyst at Nomura Holdings. Kao said in July it would buy Molton Brown Ltd., a U.K. maker of cosmetics and luxury consumer products, to expand its cosmetic business abroad.

Yamaguchi also said Kao may benefit more from Japan's economic recovery in the cosmetics business than from selling toiletry products. Consumer spending in Japan rose for three straight quarters this year as households earned higher wages.

Kao said earlier this year that prices of its toiletry products were continuing to fall because of competition.

"This transaction will help us expand in the cosmetics business, where there is high growth potential,'' Motoki Ozaki, Kao's president and chief executive officer, said at a press conference in Tokyo. Consumers are seeking a greater variety of products, portending ``rapid change'' in the cosmetics business, he said.

The Industrial Revitalization Corp. of Japan is selling 86 percent of Kanebo Cosmetics and 31.9 percent of the voting rights in its former parent, Kanebo Ltd.

The bailout agency last year provided 366 billion yen to revive Kanebo Cosmetics. The money was used to buy the stake and provide 130 billion yen of loans. Kanebo Ltd. had posted five years of losses.

The IRCJ paid 86 billion yen for its 86 percent Kanebo Cosmetics stake in March and 20 billion yen for a 32.11 percent stake in Kanebo Ltd. in May. The agency said Kanebo group has debt of 167 billion yen.

The Kanebo sale is the last major transaction for the IRCJ, set up in April 2003 with a two-year mandate to bail out distressed companies.

The revitalization agency helped rescue 41 groups of companies, including Daiei Inc., once Japan's biggest retailer, and Daikyo Inc., the country's largest condominium builder.

The agency had purchased 271.8 billion yen of equity in companies and provided 382.1 billion yen of loans as of March 31, when it stopped looking for bailout candidates. It will be dissolved by early 2008 after completing the sale of stakes in companies already under its charge.

The agency began assessing bids from as many as 10 companies for Kanebo in August. In an earlier round of bidding, Johnson & Johnson submitted an offer, according to Manabu Hirano, director of human resources and administration in Japan for the world's largest maker of medical devices.

L'Oreal SA, the world's largest cosmetics maker, decided not to make an offer after examining the Japanese company's accounts. L'Oreal couldn't find ``enough synergies'' with Kanebo, the Paris-based cosmetics maker said in September.

Kanebo Cosmetics had sales of 156 billion yen in the first nine months of 2005. The company is forecasting full-year annual sales of 197 billion yen, up from 145 billion yen a year earlier, according to its Web site. Kao's cosmetics division had sales of 78 billion yen in the year ended March 31.

Kao, which started selling soap in Japan in 1890, makes Biore facial cleanser and Attack laundry detergent.

Japan's cosmetics market, second that of the U.S., was valued at 1.4 trillion yen in the year ended March 31, according to Machiko Amano, an analyst at Standard & Poor's in Tokyo.

Kanebo Ltd. owns the remaining 14 percent of Kanebo Cosmetics, which in turn owns 37.9 percent of its former parent. Kanebo Ltd. expects sales to drop to 140 billion yen in the year ending March 31, from 269 billion yen a year earlier, as it sells businesses to reduce debt.

Shares of Kanebo Ltd. stopped trading on the Tokyo and Osaka exchanges on June 13 after the company said management overstated earnings by 210 billion yen over five years.

Kao shares rose 20 yen, or 0.7 percent, to 3,120 at the close of Tokyo Stock Exchange trading. The announcement was made after the market closed.
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Sunday, December 18, 2005

Shu Uemura make-up competition




10 make-up artists in Malaysia able to enter final after completing the "Deep Sea" make-up competition.

In the final make-up competition held at One Utama Shopping Complexe recently. The final 10 make-up contestant used Shu Uemura Chrismas Series "Moon Drops" as a theme for their make-up. And come up with First Second and Third prize.

First Prize: 王東明
Second : 張晶荔
Third: 譚惠芳


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Friday, December 16, 2005

Elianto provide business opportunity to UMNO puteri member

A trendy outlet, Elianto, which offers cosmetics and skincare products with the vibrancy and wholesome value of fruits, officially opened in Alamanda, Putrajaya, recently.

The store, owned by local fashion accessories chain Classic Bonita Sdn Bhd, is set to conquer the hearts of young girls here and overseas.

Classic Bonita, which founded Elianto, has more than 15 years of retail experience in costume jewellery, accessories and handbags.

From the humble beginnings of its first brand Bonita, the company, which started in Johor, has grown into a well-known player in the fashion industry with 10 outlets in the country as well as in Jakarta, Riyadh, Jeddah, Dhahran and Dubai.

Having established 15 Bonita outlets locally and five in Saudi Arabia, the company targets to open 100 Elianto outlets in Malaysia.

"Soon, we will expand to more countries in the region such as the Philippines, India, China and Mauritius with six new outlets," Teo said.

"In order to scale new heights, Classic Bonita is venturing into a new market, which is cosmetics and skincare," he said.

Teo said in the domestic market, the first Elianto boutique was set up at First World Plaza in Genting Highland last July, while the Classic Bonita flagship store was officially opened at Alamanda Putrajaya, here Wednesday. According to him, Elianto aspires to be the first and fastest growing local cosmetic brand worldwide.

"We are targeting to open 100 outlets nationwide in the next two years," he said.

The Elianto range comprises make-up, skincare, bodycare and nailcare products, and accessories.

It also signed a Memorandum of Under-standing with F.A. Al-Hokair & Co to open 110 Elianto outlets in the Middle East within two years, at the function.

Also present was Puteri Umno chief Datuk Noraini Ahmad.

“Elianto, which means sunflower in Italian, represents youth, freshness, vibrancy, fun and happiness,” said Classic Bonita's managing director Teo Ai Siong.

“It is the first Malaysian cosmetics and skincare brand to enter Middle East,” he said, adding that the brand catered to teenagers, college and university students, and young working professionals aged between 18 and 28, offering Korean-made products made of natural ingredients like fruits like kiwi citrus, pomegranate and cucumber, at prices ranging from RM5 to RM50.

He said the company is planning to expand its retail outlets via licencing and franchising programmes.

“For the domestic market, we believe that through joint corporation with Puteri Umno, especially under the Biro Ekonomi, we can work hand-in-hand in giving opportunities to the members to venture into business, as encouraged by the prime minister,” he said.

"We believe through collaboration with Puteri Umno, we can work hand in hand by giving opportunities to the members to venture into business," he said.

Noraini said the party could help its members in obtaining resources from financial institutions and urged them to be bold and venture into business.

“The support is encouraging and the products have reasonable pricing. The brand is targeting the young generation,'' she said.

F.A. Hokair, based in Saudi Arabia, is the franchisee of over 40 international brands in West Asia, including Zara, Mark & Spencer, Nine West, Aldo, Saks Fifth Avenue, La Senza, Promod and Gean.

The company is also a shopping mall developer and it owns and operates more than 10 shopping malls in the region.

Teo also said that the Classic Bonita group has targeted to achieve RM30 million in revenue next year compared to RM20 million in 2004.

The company, he added, hoped to go for a public listing by 2010.

Related Link: Business Times

Link to this page : cynthia

Link: Esthetics Vs Diabetic ?

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Wednesday, December 14, 2005

Hi-City Bioscience : personal care healthcare products manufacturer that listed on second board

Personal care manufacturer Hi-City Bioscience Group Bhd expects to spend more on research and development (R&D) this year after having allocated three per cent of its revenue on such activities.

Chairman and Managing Director Heah Chew Teng said that the company would emphasise more on its R&D division due to the changes of technology, consumer lifestyle and fashion sense.
He said that R&D activities were critical in helping operators to keep abreast of changing consumer preference either in the form of selecting key raw materials or utilising advanced technology when manufacturing personal care product.

“We expect to spend more this year on the R&D activities. This is one of our strategy to enhance our capability as the leader in personal care manufacturing,” he told reporters.

He said that operators who have in-house research and testing laboratories and undertaking R&D, would be able to translate latest consumer trends to finished products.

Heah said that there were opportunities to target specific market segments in personal care products including products that cater to the needs and requirements of specific age groups such as teenagers, male segment or older age groups.

The managing director said that each different market segment has very specific requirements including among others, anti-aging products, plant based products, products for sensitive skin or acne.

“We are confident that there is always a market for personal care product because these are the products that customers always use,” he said.

He said 49 per cent of the sales was contributed from the domestic market and the remaining 51 per cent from the export activities.

Hi-City Bioscience exports its products mostly to United States (US), Australia, Africa, China, New Zealand, Taiwan and Brunei.

Hi-City is the OEM for American personal care products under brands such as Refreshment, Dawn Mist and Medichoice.

Hi-City Bioscience Group Bhd has entered into an agreement to be an original equipment manufacturer (OEM) for New Zealand-based Aire Natural Science Labs Ltd in middle of 2004 before listing to the second board of Bursa Malaysia on July 14, 2004. Chairman and Managing Director Heah Chew Teng told reporters after the agreement signing with Aire Natural Science Labs Ltd that Hi-City would manufacture personal care products and supply them to Aire Natural customers in the airline and hospitality industries.

“The personal care products, to be labelled under Aire Natural brands Caire and Rejuvin, will be used in the first and business classes of international airlines. Aire Natural is the only company in the world that offers researched, purpose-designed and effective products for airlines. Their products are specifically designed to counter-balance the effects of prolonged confined air-conditioned environments such as dehydration and jet lag.

“Traditionally, Hong Kong has been the hub of travel and hospitality supplies to the world market. By teaming up with Aire Natural, we are confident that Malaysia, more specifically Penang, will emerge as a strong contender to wrest this position from Hong Kong,” Heah said.

He expects the new business deal to initially contribute between 5% and 7% of the group’s 2005 revenue. “The contribution would gradually grow. Currently, the group's original equipment manufacturing activities generate about 51% of group revenue.

Heah and Aire Natural Director Grant Bittle signed the agreement in the presence of Penang State Executive Councillor Teng Chang Yeow.

Bittle said Aire Natural and Hi-City would collaborate to produce the formulation for the personal care items. “We are in talks with six international airlines to supply our personal care products to them. Currently, we are producing for about 10 airlines,” he added.

In 2003, the market size for the personal care products industry in Malaysia was estimated at RM1.6 billion and the market share of the Hi-City Group was approximately two per cent of the total industry based on local expenditure.

For the financial year 2003, the company posted a net profit of RM5.60 million on the back of turnover totalling RM31.60 million.For the group's first nine months ended Sept 30, Hi-City reported an unaudited after-tax profit of RM4.3 million on the back of RM26 million revenue.

Hi-City Bioscience Group Bhd strategises to be a total supplier of medical products in the region. As part of its plans to produce medical devices and pharmaceutical products, it will launch a new range of drainage bags for collecting body fluids, catheters and tubes under its own brand name, Clinicgoods, next year.

Group Managing Director Heah Chew Teng told StarBiz that production was likely to start in the fourth quarter of 2005. He said the medical devices would be exported to the United States, where the group had already secured customers.

Heah said the group was also eyeing the African market, where the group was currently establishing its networking, adding that the other two important markets are located in South-East Asia and Europe.

Heah said the group had recently introduced new products such as medicated and body wipes for the markets in the US and Malaysia, and nutritional supplements.

"The medicated and body wipes are sold under the group's in-house brand Hanitizer," he said, adding that orders for the bulk of the group's medicated and body wipes would come from the US. Meanwhile, the nutritional supplement, sold under the brand name Clinicfoods, is targeted at the local market.

Heah said the group had invested RM3 million in machinery and equipment from Italy and South Korea for the production of these two new products.

About 70% of the group's raw materials such as chemical ingredients are sourced directly from suppliers in Europe, China and the US.

"We expect the recently launched products to contribute about 20% to revenue next year," Heah said.

A new research and development (R&D) laboratory is among Hi-City Bioscience Group Bhd's strategies to upgrade its product development activities.

The Penang-based company, which aims to incorporate more research-based work in developing its healthcare and personal care range of products, is also looking at tapping the medicinal value of local plants, Chairman and Managing Director Heah Chew Teng said.

Its investments exceeding RM5 million are being earmarked for a new leased facility which will house not only the R&D lab, but also its headquarters and manufacturing site for healthcare products. The proposed plant will be sited on a 4.8ha on the fringes of the Waldor Industrial Park at Sungai Bakap in Seberang Prai. Group executive chairman and managing director Heah Chew Teng told reporters after the company's AGM that the group would move to the new facility, which is under construction, at the end of the year.

He added that the plant would start operations early next year.“This three-storey facility, which we will lease from the developer, will also serve as the group’s corporate headquarters,” he said. “On top of that, it will also house our research and development (R&D) unit to develop healthcare products such as nutritional supplements and vitamins.

“The R&D unit will also work together with public tertiary educational institutions to develop pharmaceutical products using extracts from plants with herbal and medicinal qualities,” Heah said. Hi-City Bioscience also planned to R&D initiatives with overseas pharmaceutical and biotechnological companies, he added.

Production of the company's healthcare products - which include dietary supplements and generic pharmaceutical products under the "Clinifoods" brand - is expected to commence by early 2006.

"We will continue manufacturing our personal care products - now totalling 650 items - from our existing plant in the Prai Industrial Estate," Heah said, adding that the company hopes to expand its existing range of less than 100 healthcare items this year.

Hi-City's products are sold locally, and to customers in countries that include the US, Canada, Australia, the UK, New Zealand, Africa, China, Taiwan, Singapore and Brunei.

The group's own brand of products include "Hyginix", "Hanitizer", "FSMP", "Dermaplex" and "Home Spa".






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Sunday, December 11, 2005

Johnson & Johnson most reputable company in the world



Johnson & Johnson was recognized for having the best corporate reputation in America for the seventh consecutive year, according to the annual corporate reputation survey conducted by Harris Interactive® and the Reputation Institute in 2005.

Second most reputable company is Coca-cola and the third is Google.

The development of the first ready-made, ready-to-use surgical dressings by Johnson & Johnson in the mid-1880s marked not only the birth of a company, but also the first practical application of the theory of antiseptic wound treatment. A new product, based on a new surgical concept, led to a dramatic reduction in the threat of infection and disease, which claimed an appalling number of postoperative victims.

Fred B. Kilmer, the Company's scientific director for 45 years beginning in 1888 was responsible for the birth of one of Johnson & Johnson's most famous product lines in 1890. In response to a doctor's complaints of patient skin irritation caused by the Company's plasters, Kilmer suggested sending the patient a container of Italian talc to soothe the skin. The Company began packaging the talc with the plasters, and soon customers were asking for more of the powder. The scented talc was soon being sold as JOHNSON'S® Baby Powder, which remains one of the most recognized and trusted products in the world. This led to the introduction of a number of other baby products, and a series of advertisements proclaimed the new line of products, "Best for your baby, best for you."

During the 1950s, the management of Johnson & Johnson saw the need to diversify the business, and the Company began expanding into the field of pharmaceuticals. One of the first acquisitions was McNeil Laboratories, Inc., which would later introduce the pain reliever TYLENOL® (acetaminophen).

Further expansion through international growth resulted from the creation of new companies and the acquisition of existing ones.

Johnson & Johnson's skin care business was expanded with the 1993 acquisition of RoC, S.A., of France and the addition in 1994 of Neutrogena Corporation, two manufacturers of high quality skin and hair care products.

In Malaysia, people are more familiar on Neutrogena rather than Roc.

Johnson & Johnson rank no 8 largest beauty and cosmetic company in the world. However, only 8% of it sales are from beauty and cosmetic product. The rest are from healthcare and baby care product.


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Wednesday, December 07, 2005

Eng Kah: The only cosmetic manufacturer listed on Main Board of Bursa Malaysia

The name Eng Kah may not ring a bell among consumers of personal care products, but this Main Board company seems to be thriving in the wings as contract manufacturer to globally renowned brands such as Avon and Johnson & Johnson.

The business was founded by managing director Ewe Eng Kah, a chemist who started in the 1970s making his own shampoo in Penang. The company now manufactures perfumes, skincare, cosmetics, toiletries and household products

When Ewe Eng Kah was offered a job by a reputable steel mill to work in Japan, he turned it down, preferring to stay put in his homeland after years of study abroad. And he has no regrets because soon after that, Ewe ventured into the shampoo business and found his true calling.

He founded Eng Kah Corp Bhd, a contract manufacturer of perfumery, cosmetic, skincare, toiletry and household products, which is shampoo business and found his true calling. Today Eng Kah is the only perfumery, consmetic and skincare manufacturer listed on main board of Bursa Malaysia.

The other public listed company on the main board: Esthetics International Group Bhd is in professional skincare and spa services and distribution. Not in Manufacturing. Another manufacturer Hi-City BioScience Group Bhd is listed on Second Board. Thus, Eng Kah is the only cosmetic manufacturing company listed on main board of Bursa Malaysia.

“Back in the late 1960s, shampoo [in liquid form] had just come into the market and I thought it would be a good opportunity to embark on the growing trend,” says Ewe in an exclusive interview with The Edge.

With his qualification in chemistry, Ewe came up with his own formulation of various variants of shampoo in his own backyard. Having total faith in his innovation, Ewe then marketed his shampoo to salons. It became a success and soon his products could be found on the shelves of retail shops all over Penang.Incorporated as Eng Kah Enterprise Sdn Bhd in 1985, Eng Kah Corp is now the holding company for Eng Kah Enterprise, Eng Kah Enterprise (KL) Sdn Bhd and Eng Kah (HK) Ltd, which is dormant.

Ewe recalls the turning point for the company. “In the mid-Seventies, I was approached by an international brand name which showed strong interest in the company’s products.

“The multinational corporation [MNC] was keen for us to become its supplier, but we were very limited in resources,” recalls Ewe. “At that time, the company was still a cottage industry, operating from a few rented bungalows.”

The event left a deep impression on Ewe. He was then convinced that with the right infrastructure, the company had the potential to be a good contract manufacturer for both local and international brands.

Eng Kah Corp now manufactures approximately 1,000 items for more than 50 companies of various natures, namely, trading companies, direct selling companies, MNCs and even public-listed companies. Among its major customers are Cosway (M) Sdn Bhd and Manufacturing Services Sdn Bhd, a subsidiary of Unza Holdings Bhd.

According to market research carried out by Taylor Nelson Sofres Malaysia, Eng Kah Corp is the only large contract manufacturer with the complete range of perfumery, colour cosmetics and household products in Malaysia. “Eng Kah took off with [the production of] shampoo and hair dye, then we ventured into toiletries in 1986,” says Ewe. “Upon shifting into the existing plant in Bayan Lepas, the company started to manufacture skin care products in 1992.”

Ewe wanted to provide a full range of products so that “the customers would not have to look elsewhere” and in 1997, the group acquired a factory building in Shah Alam for the manufacturing of household products.

Of the RM17.44 million to be raised from the placement and public issue, RM2.5 mil lion will be utilised for the recent purchase of machinery as part of the group’s expansion plans. Both plants in Penang and Shah Alam are currently operating at 90 per cent capacity.

In view of growing demand, the company acquired two plots of land in 2000 measuring a total of 5.8 acres along with a factory building in Nilai for future expansion.

With its subsidiary Eng Kah Enterprise having been awarded the Good Manufacturing Practice (GMP) certificate in 1999, one of the company’s new focuses will be to develop medicated, pharmaceutical and herbal-based products.

“We want to differentiate our products by adding value to them,” says Ewe, who is involved in the research and development of the group. “These types of items will be able provide a stronger commitment to deliver results desired by consumers, such as anti-wrinkle cream and anti-dandruff shampoo, hence creating product loyalty.”

“Eng Kah adds value to its customers by providing total concept solutions in terms of packaging designs including sourcing of raw packaging materials, creating new formulation for its customers and arranging for direct delivery transportation,” states the local stockbroking house in its research report.

Chong Sui San, chief investment officer at Allianz Unit Trusts, says that Eng Kah’s experience and standards of research and development (R&D) give it a good sense of clients’ needs, which enables it to comfortably explore new ideas for products.

“Eng Kah’s know-how is its strength, and this is evidenced by its ability to secure clients like Avon and Johnson & Johnson”, says Wong Ming Tek, an analyst with DBS Vickers Securities.

A good track record and reputation follow on from know-how, and Eng Kah seems to have maintained theirs, analysts reckon. Chong says that hygiene and quality control have to be top-class in the beauty business, as a single customer complaint could affect the entire reputation of a manufacturer.

According to a DBS Vickers Securities research report dated Oct 10 last year, Eng Kah has greater control of the manufacturing process as 95 per cent of formulations are created in-house. These formulas provide the company with a high degree of bargaining power with its clients, because whilst the ingredients are made known to clients, the company retains and owns the “secrets” as to how they are mixed. It is not surprising then that the company’s top three customers by revenue contribution in the financial year ended 2001 (FY01) have been with the company for 14, four and six years, respectively.

The know-how factor also lends itself nicely as a barrier to entry. Chong says that there may be copycat companies in the industry watching Eng Kah with a view to follow in its footsteps. She notes, however, that the industry is very segmented and it would be difficult to undertake a comparative analysis, especially among “backyard chemists”.

She believes that Eng Kah can distinguish itself as international names are behind it. Eng Kah also provides value-added services to its customers in the form of transportation and by designing the packaging for its products. “Compatibility between the product and its packaging is very important, both in terms of design and of how the materials react to each other,” Ewe says.

Another analyst’s view is that there are no major barriers to the cosmetics and toiletries industry, and branding and marketing are what set products apart. Ewe says that entry into the industry is not just a question of having adequate capital. “The strength lies in R&D and it is difficult for a newcomer to gain experience,” he explains.

However, the management is not resting on its laurels. The company has set up another plant in Nilai, Negri Sembilan, with its listing proceeds to add production capacity to its existing Penang and Shah Alam plants.

DBS Vickers’ Wong sees this as a prudent move on the part of the management. “Bulkier, low-margin products like household and toiletry items will be moved to Nilai from land-expensive Penang. Transport costs will also be reduced as Nilai is a more central location,” he says.

Chong says that it makes sense for the higher-margin products to remain in Penang as Ewe is “very hands-on and involved in the business”.

Capacity in Penang for the higher-margin products like cosmetics and skincare will be expanded by 25 to 30 per cent in the next two years.

Eng Kah should also be able to fend off competition from other manufacturers in the region with its embedded skills, experience and long-term relationships.

The company has also bought a piece of land next to the new Nilai plant “to be used for a new idea” and should finalise an agreement with a new multinational client by the end of the month.

AmResearch said Eng Kah's production capacity would grow when its third plant in Nilai was commissioned in the fourth quarter this year.

Manufacturing of household products would be shifted to the Nilai plant to free up capacity of its present two plants to manufacture perfumery, cosmetic, skin care and toiletry products.

The Nilai plant is two times larger than its existing plant. Its two plants in Bayan Lepas and Shah Alam were operating at 90 per cent capacity. This has caused backlog orders over the past three months.

Eng Kah recently acquired a factory building in Bayan Lepas previously owned by Widetech (M) Bhd for RM5.63 million cash, located next to Eng Kah's existing plant. The Widetech plant, together with a new plant in Nilai, which commenced operations last month, will increase its production capacity. Eng Kah is already operating at full capacity.

analysts are bullish on Eng Kah is its innovation and management focus. Analysts note that Eng Kah is among a few players in the industry that not only contract manufactures skin care and household products but also generates new product ideas for its clients. These new ideas include packaging methods as well as new chemical formula for products.

Excerpt from The Edge.

Eng Kah rides on Cosway potential
http://english1.cari.com.my/forum.php?mod=viewthread&tid=767928&fromuid=1950303















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Sunday, December 04, 2005

Fortune Magazine feature beauty & cosmetic industry in china

Recent issue of Fortune magazine feature beauty and cosmetic industry in China with it cover story title "Battle for the Face of China".

MAC, a company under US's Estee Lauder, compete with Japanese Shiseido herb-infused face cream developed especially for Chinese skin at Shiseido's R&D center in Beijing, French's Loreal group and LVMH group's Sephora and Dior.

The magazine descripe above is David. Stated that the Goliath is Procter & Gamble. because its Olay whitening skin creams outsell every other brand, and its shampoos (Rejoice, Head & Shoulders, and Pantene) hold the top three hair-care positions in China. In March P&G launching Cover Girl and Max Factor to compete with L'Oréal's Maybelline. Along with its high-end SK-II skin-care line and its other household and food brands. Roughly 70% of that from hair and skin products, compared with a fifty-fifty split with food brand in other countries. "We are the beauty company of the P&G company," says Daniela Riccardi, P&G's president for Greater China. "Nowhere else is beauty such an important part of the business."

L'Oréal's 2004 sales of $350 million (including makeup and other beauty products), were up 58% over the previous year; Shiseido's China sales last year were $204 million, up 27%.

"It's the only big market growing this fast in China," says Jacques Penhirin, a McKinsey partner who tracks retailing. "This is a market that was almost nonexistent 15 years ago, and about 70% of it remains to be developed."

Read the full article above here.

"Chinese people ask for even whiter tone than what is selling well in Japan," says Tadakatsu Saito, chairman of China operations for Shiseido, which has the most experience of all the multinationals with whitening because of the huge market in Japan. "When we try to sell them their exact color, they say, 'Too dark. Do you have anything lighter, brighter?' "

Women in China who can afford it think little of spending at least as much money on facial moisturizer as on clothes. That would be unusual in the U.S., where 87% of women spend less than $20 when they buy skin cream. But at Plaza 66, an upscale mall in Shanghai, fashionable Shanghainese women toting designer purses and Starbucks coffee cups pause all day long to buy expensive moisturizer at the counter of La Mer, another Estée Lauder brand.

One of them, Qiao Hong, 42, says. "It's really worth the money. With money, you can just make more of it, but your skin—if you lose your beauty and youth, you cannot get it back."

La Mer's counter has 32 other women on a waiting list to purchase a 500-milliliter jar of face cream. Cost: $1,750. Shiseido finds similar demand for its Clé de Peau line, which, at $500 for 30 grams, is more expensive than gold. On any given Saturday afternoon, the comfy chairs at the Clé de Peau sections of department stores are filled with buyers and with women waiting to take their places.

Read the full article above here

L'Oréal's new laboratory in Pudong is a 32,000-square-foot facility stocked with pigments, waxes, and oils. Didier Saint-Leger, a biochemist, oversees the microscopes and chromometers that measure the effectiveness of skin-whitening creams, the ovens that heat emulsions to test stability, and the two-way mirrors that enable him to observe the way Chinese women apply face creams and makeup. The center opened in September with 43 Chinese researchers, most of them chemists. Next year, when L'Oréal completes construction of Phase II, currently an empty field at the back of the lab, there will be 75. Chinese herbs, roots, and flowers will be tested there, distilled and researched for their impact on skin and hair. Hua jiao, the flower of the prickly ash tree that adds tongue-scorching spice to Sichuan cuisine, is reputed to clear up acne and will be among them, as will traditional whitening agents such as ginkgo leaf, ginseng, and mulberry.

The R&D center is part of L'Oréal's transition from the image it currently projects in China. Its recent acquisitions of Yue Sai, for a decade the most popular cosmetics brand in China, and the low-end skin-care line Mininurse are steps in that direction.

But Shiseido is already ahead in the traditional-formulations game, with its "Chinese national brand" Aupres and its recently expanded three-year-old Beijing R&D center. It has already launched its first product (Eternal Total Recharge) and has more on the way.

Estée Lauder opened its own 15-scientist Innovation Institute in Pudong in November, stacked with pigments with names such as "gleamer flake" and "magic mauve." As a latecomer, Estée Lauder's strategy has been to build a finally-this-glamorous-American-brand-is-available-in-China buzz for its prestige lines long before they go on sale. It also gives away cosmetics to China's leading makeup artists to encourage them to experiment on models for shows and movies.

Carol Chen, Lauder's Taiwan-born general manager and the only ethnic-Chinese woman heading a major beauty company in China, says "China changes so fast," "You blink, and the market is there." Chen used the same strategy to launch the Clinique and Estée Lauder lines, advertising in the Chinese edition of Elle years before they were for sale in China.

Read the full article above here

L'Oréal may also begin introducing products differentiated by region—heavier creams for China's cold northern climes and lighter ones for the tropical south—as well as by skin tone. "Segmentation is something that's becoming more and more important," says Gasparrini. "There's still huge space in the market to take." L'Oréal, like all beauty companies in China, finds there also is space to educate Chinese consumers, who know little about applying cosmetics or why they need exfoliants. "In other countries women learn how to use cosmetics from the mom," says Gasparrini. "That's not the case in China. We have to substitute the mom."

Shiseido has built a chain of 25,000 stores in Japan, a country one-25th China's size. Last year it started doing the same thing in China. The company is selling hundreds of products it has developed and manufactured through two joint ventures in China, under brands with names such as Za, Uno, and Fitit. Shiseido expects to double its annual China sales, on operating margins of more than 20%, and make China contribute one-fourth of Shiseido's overall global revenue. "Ten years ago we thought that 1% of Chinese women would be Shiseido customers," says Masaru Miyagawa, president and CEO of Shiseido China. "Now we think that 10% of Chinese women will be Shiseido customers."

Read the full article above here

There are Chinese companies in the beauty game as well, and being Chinese, they are best poised to play the tradition card. One of those is Shanghai Herborist Cosmetics, a division of state-owned Jahwa. "We're the Body Shop of China," says Herborist's fashionable brand manager, Lily Xu. Herborist makes 130 products for use from head to toe; one of its most popular is a "whitening revitalizing mask," which uses seven herbs that claim to lighten skin tone in 15 minutes, producing faces "as white as a lotus seed." Herborist now has 180 freestanding boutiques in 40 cities in China and plans 100 more by next year. Xu is excited about a recent agreement with Sephora to sell Herborist products in its China stores and ongoing discussions with the company to sell Herborist abroad. "Back to nature is the cosmetics and skin-care trend in fashion now," says Xu. "Once Origins or L'Occitane come to China, then we'll have real competition. But we'll still be able to distinguish ourselves as coming from Chinese tradition and Chinese medicine."

It's all about mixing tradition and modernity to reach Chinese consumers, says Yue Sai Kan, a TV celebrity in China who founded the cosmetics line acquired by L'Oréal. Sitting on a plush sofa in her New York City townhouse, where she spends her time when not working on a new show in Shanghai, she opens a book of paintings from the Tang dynasty, when China was ruled by an empress, Wu Zetian. She points out the red lips and painted brows in the depictions of women who lived more than 1,000 years ago. "See, Chinese women have always used cosmetics," she says. "In the Tang dynasty they used as many steps of makeup as we do today. Chinese women had been discouraged from using cosmetics for 35 years. It was a world of darkness, of no color. Now it is changing. What you have to do is give them international, yes, but Chinese have a lot of pride in themselves and their traditions. The best thing you can give them is a belief in themselves."

The above is excerpt here.

Link : estee lauder owned cosmetic companies



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Saturday, December 03, 2005

Malaysian firm promotes female arousal oil in Singapore Sexpo

Last month, Singapore held a first Sexpo in the country.

What is a Malaysian company doing in a Sexpo?

“We’re here simply to disseminate information and create awareness on a fabulous product,” said B.B. Teh, who is Biodel Sdn Bhd director.

And the “fabulous” product introduced at the three-day Singapore Sexpo 2005 is Zestra, a female arousal fluid.




“We are not limiting ourselves to the Malaysian market because our company is Zestra’s sole distributor for Asean countries,” said Teh.

“So we take every opportunity to participate in exhibition or seminar revolving sexual health in the region.”

Teh also said that the company’s participation in the Sexpo was timely as Biodel will launch Zestra the next day in Kuala Lumpur.

The response to Zestra in the Sexpo was tremendous, he said, as Biodel received many trade enquires from Singaporeans, Indonesians and Thais.

So what did Teh think of the Sexpo which is the first to be held in Southeast Asia?

“Not as what we expected in term of exhibitors. There was too much emphasise on condoms, dildos and exotic dancing girls. What’s missing are the big players like Durex (international condom manufacturer) and Pfizer (the maker of Viagra),” he said.

However, Teh reckoned the Sexpo to be “low key, less skin and no sleaze” and more informative and educational.

“It is expected because this is Asean and particularly Singapore.”

The American-product Zestra, is an externally applied botanical oil for women who want to increase their overall sexual pleasure and satisfaction.

Zestra, aroused interest among the Sexpo visitors.

“Many older gentlemen were very frank about needing external help to boost their partners' libido and sexual response. The men told me that they themselves had Viagra and Cialis,” said Teh.

“Many were very disappointed when I told them that we were not selling Zestra in the Sexpo.”

The other Malaysian company in the Sexpo was condom manufacturer Luveex which gave away 50,000 condoms.

Excerpt from The Star

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Thursday, December 01, 2005

Avon and Mary Kay




Avon and Mary Kay both are focus direct selling company beauty and cosmetic industry. Job or career opportunity to ladies are limited at the point of both company found. Thus, both company claim to be a job provider to ladies when job opportunity for lady is limited. Even now, both company also claim to be providing "business opportunity" for aspires lady enterpreneur.

Avon was founded by a guy call David H. McConnell in 1886 whereas Mary Kay was founded by a lady call Mary Kay in 1963.

In 1990, Avon was diversified to too many non core business and the company was in trouble. Amway, a health care direct selling company offer a take over bid to take over the management control of Avon. Later, Mary Kay, a much younger company also join in the bandwagon to bid for the company.

Avon rejected both deal, which they view as hostile take over. Avon claim thier company is disimilar with Amway as both company in different indsutry. Avon in beauty and cosmetic while Amway in health care nutrition industry.

Even with Mary Kay. Avon also claim their customer base is different from Mary Kay! Which until now I do not understand.

Avon, after divesting those non core business. Now become 6th largest beauty & cosmetic company in the world while I never saw Mary Kay on the top 10 list.

One of the ruling party in Malaysia UMNO, it Puteri UMNO division claim that majority of their member are unemployed. This is how serious our country unemployed rate especially among bumiputra lady graduate in Malaysia.

As both company Avon and Mary Kay have operation in Malaysia. And both company claim to provide "Business Opportunity" to lady. Perhaps unemployed lady graduate might approach one of the above company!


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