The Chinese market for beauty products is expanding rapidly and Risdon International Inc. is positioning itself to fill the growing demand.
In the past month, Risdon has acquired a plastics product manufacturer in China and reshuffled its Asia management team, bringing in new talent and sending some of its top managers to Shanghai.
The Watertown, Conn.-based firm's acquisition of Inmagine Plastics, in Taicang, comes on the heels of a similar purchase of Decorpart Asia, a metal forming and finishing plant in Suzhou.
``We were looking to expand our capacity in Asia when the [Decopart] plant went up for sale,'' said Faqueer Ahmad, executive vice president and managing director for Risdon Asia. ``We thought this would be better than purchasing a new factory - this way we would already have people qualified to bring our new metal technology into China.''
The 208,000-square-foot Taicang plant complements the earlier purchase, Ahmad said, which already covers one side of Risdon's manufacturing process.
``The other side of the business is compress and packaging,'' he said. ``We found an almost new, about a year-old facility, about an hour from our metal plant - it made perfect sense to put the plastics in a similar location.''
In coming months, the Taicang facility will be enhanced with technology additions and new molding, including new mascara brush-molding technology.
In February, Risdon's plastics division, which specializes in molding cosmetic products, was purchased by the Shanghai-based private equity group Teahouse Partners Ltd. The company was previously owned by Philadelphia-based Crown Holdings Inc. Although Teahouse is based in China, the exploding market for cosmetics is the real reason Risdon is there, Ahmad said.
``While U.S. growth in the market is around 3 percent [annually], in China growth is around 12-13 percent,'' Ahmad said. ``Clearly the brands will have to start filling capacity in this market.''
In the future, Ahmad plans to use the Suzhou and Taicang sites to supply the Asian market exclusively. For the time being, however, some products still will be shipped to Europe and the United States.
``Seventy percent of product is still filled in Europe and North America,'' he said.
To help the two factories transition to new ownership, Ahmad has made the move from Connecticut to Shanghai.
``We had a choice of managing at the top level on the outside, but I decided it would be better if I were on-site,'' he said. ``At least until the team is able to run the business.''
Ahmad is joined by Jackie Khong, operations director at the metal forming facility, and Philip Teu, formerly of ATP China, who has been appointed operations director at the Taicang plastics plant.
In the U.S., Linda Cooper, also a former ATP employee, will serve as the liaison between the U.S. and Asia-based operations.
``We've also added significant amounts of capability of molding management and other areas of the business,'' Ahmad said, speaking of local Chinese hires. ``We are on the way to building up our capacity here.''