Hong Kong — Shanghai-based cosmetics industry supplier HCP Packaging Group is looking for significant growth in Europe with the acquisition of plastics firms in Germany and France.
HCP bought Germany's Rusi Cosmetic GmbH & Co. KG, which makes packaging for mascara, lip gloss and eyeliner, in August.
That follows last year's purchase of SIMP, a French injection molder specializing in making applicators for L'Oreal, Lancome, Dior, Givenchy, Estee Lauder and other leading beauty brands.
"Having a real local presence really changes the game," said HCP Packaging USA President Damien Dossin in an interview at CosmoProf, held Nov. 14-17 in Hong Kong. "Now [potential customers] see us as a true global player when they need someone to manufacture in two or three locations at the same time."
HCP has about 4,000 workers at four factories in China, plus smaller plants in Hinsdale, N.H., and Reynosa, Mexico.
Having factories on three continents now boosts the appeal of HCP when a multinational brand is planning a global launch, Dossin said.
"We can meet very tight timelines if we're running the same product in two or three locations," he said.
Rusi has an 86,000-square-foot factory in Bechhofen an der Heide, Germany. Total headcount at the plant is 180.
In a statement announcing the acquisition, HCP said it plans additional investments there.
"HCP values the wide range of product category expertise that Rusi possesses, which we intend to build on by investing in a significant plant expansion to better support our customers' regional sourcing objectives in Europe," said CEO Eddy Wu. "In addition, with both SIMP and Rusi under one umbrella, HCP can offer very compelling full-pack mascara solutions locally."
HCP has said for several years it was pursuing European factories. Dossin said the expansion will shorten delivery time and manufacturing turnarounds, vital in the hyper-trendy cosmetic industry.
"Reorder lead time — that's a big thing. So [customers] won't experience out-of-stock situations in which they have to air freight product from China," Dossin said.
"They might be able to save 5 or 10 cents on the packaging, but they might be missing out on a 10 or 15 euro sale if they have to wait the six weeks for a shipment," he said.
The company is looking into adding new product lines at Rusi, Dossin said.
HCP said the heads of both companies will report directly to Wu, and SIMP will operate as a separate organization because customers purchase brushes from it directly.
HCP has worked with SIMP for many years, and was particularly interested in SIMP's design, development, and manufacturing capabilities for applicators for mascara and other beauty products.
"We are realizing our dreams of being the world's leading mascara solution provider and at the same time moving toward much more regionally localized manufacturing in each of the markets we serve," Wu said.
SIMP, based in Tigery, France, specializes in micro-injection molding of plastic and rubber parts and has a 70,000-square-foot factory. It also has industrial capabilities in Mexico, according to HCP.
Founded in 1960 in Taiwan, HCP opened its first Chinese factory in 1990 and moved its headquarters to Shanghai in 2006.
Baring Private Equity Asia acquired HCP in January 2016 from TPG Capital for a reported $775 million. TPG bought the company in 2012 from its founding family in Taiwan, which led to a period of growth, bringing the company to 300 injection molding machines in its Chinese facilities.