Exclusive | L'Oréal CEO says no immediate plans for more India acquisitions

L'Oréal is not looking to make another acquisition in India in the near term after buying Innovist, the owner of Bare Anatomy and Chemist at Play, CEO Nicolas Hieronimus told CNBC-TV18.

“L’Oréal always studies all opportunities, but as I said, they have to be complementary of our portfolio. They have to have an economic equation that's worth it. So today we have Innovist, and we are very happy with it. There might be other opportunities in the future, but not in the short term,” Hieronimus said.

The comments come as L'Oréal sees India becoming an increasingly important growth market. Hieronimus said the company’s India business is growing around 18%, compared with market growth of about 10%, helping India become the group’s seventh-largest contributor to growth.

 

Capacity expansion over new factories

With demand rising, L'Oréal plans to expand manufacturing capacity in India, primarily by increasing capacity at its existing facilities rather than building new plants.

“I think the usual thing we like to do is to increase the capacity of the sites where we operate,” Hieronimus said. “It’s more likely to be capacity increase than green fields.”

L'Oréal manufactures about 95% of what it sells in India locally and also exports from the country. Hieronimus said the company currently exports “probably 20% of what we manufacture here”, mainly to countries in the region.

He said the first priority is to meet the growth in the Indian market, with exports expected to increase as production volumes rise. “We will continue to invest in our factories, and we will continue to invest in more capacity,” he said.

 

India increasingly important to L'Oréal

Hieronimus said India has reached the top seven among L'Oréal's contributors to growth, with the company seeing momentum across its portfolio.

Mass-market products are currently the biggest growth driver, while professional beauty, dermatological beauty and luxury are also contributing. The company has seen strong growth in dermatological beauty following the launch of CeraVe and La Roche-Posay, while its luxury business is growing at double digits, he said.

The company is also using India as a base for innovation, with technologies developed by its Indian laboratories being deployed globally. Hieronimus cited Melazil, an anti-dark-spot technology, and a hair-care co-emulsion technology as examples.

 

Hyderabad tech centre to support global operations

L'Oréal also recently inaugurated a technology centre in Hyderabad, which Hieronimus said will eventually have more than 2,000 employees and support operations not just in India but globally.

The centre will initially focus on administrative activities, with its scope expected to expand into areas such as content creation and other technology-led functions.

The company is also using its India operations to develop products and technologies that can be taken to other markets, with Hieronimus describing the approach as “created in India for the world.”