[Exclusive] Cosmax Plans to Establish a Production Plant in Italy Next Year

[Financial News] Cosmax, a leading global cosmetics ODM (Research, Development, Production) company, is planning to establish a production plant in Italy next year. Having initiated globalization with its entry into China in 2003, Cosmax aims to secure a direct supply chain locally in response to the growing demand for K-beauty in Europe, the largest beauty market after the United States. 
According to industry sources on the 21st, Cosmax is considering establishing a production corporation in Italy by mid-next year. Lee Kyung-su, the founder and chairman of Cosmax, disclosed this plan during a corporate briefing (IR) for domestic and international securities firm analysts in Yeouido, Seoul, the previous day. Although it currently operates a sales office in Paris, France, it does not have a production base in Europe. 
The reason behind Cosmax's push to establish a production base in Europe is the growing demand for K-beauty locally. Europe is considered one of the world's largest cosmetics markets, along with the United States and China. As more brands among European consumers seek Korean cosmetics concepts, the need to supply directly from the local area rather than sourcing from Korea has increased. 
Italy was chosen as the candidate site for the production corporation due to cost factors. Compared to France, the 'cosmetics powerhouse,' Italy has relatively lower fixed costs such as labor and rent, and it is well-equipped with cosmetics infrastructure. Additionally, it aligns with the premium strategy. Chairman Lee emphasized at the IR the previous day, "Now is the premium era," and "We will introduce the finest cosmetics that can compete with France." This is interpreted as a strategic shift to increase the proportion of high-end products through R&D and brand collaboration, moving away from price competition. An industry insider explained, "Korean cosmetics have had a strong cost-effectiveness image so far, but to go long-term, we need to move into the premium market," adding that "Cosmax's premium strategy reflects this trend."
Cosmax operates production bases in major markets such as China, the United States, and Indonesia. Currently, Cosmax has directly entered 10 countries. Cosmax is also pursuing the establishment of a local corporation in Mumbai, India, by the end of this year. It currently has sales networks in Ho Chi Minh, Vietnam, and Kuala Lumpur, Malaysia, and is considering entering the Middle East after establishing the Indian corporation. If the Italian production corporation is added, the expansion of the global supply chain centered on Europe is expected to accelerate further.
clean@fnnews.com Lee Jeong-hwa Reporter