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Last updated at: (Beijing Time) Monday, March 22, 2004

Avon to become solely foreign-funded in China

Avon (China) Co. Ltd will acquire the stake of its Chinese partner Masson for 50 million US dollars to become a solely foreign-funded enterprise in China.


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Avon (China) Co. Ltd will acquire the stake of its Chinese partner Masson for 50 million US dollars to become a solely foreign-funded enterprise in China.

Presently, Avon, the world's leading direct-sales cosmetics group, Masson, a Guangzhou-based private company, and several individual shareholders have 75 percent, 20 percent and 5 percent stakes in the joint venture, respectively.

"We have reached an agreement and are waiting for approval fromthe relative governmental department," Gao Shoukang, president of Avon was quoted by Monday's China Daily as saying.

Gao said the move aims to allow Avon and Masson to concentrate on their key businesses and optimize the product mix.

Avon is working for a strategy that places China at the centre of its growth, according to Gao, but he declined to disclose Avon's further investment plans and sales network expansion timetable in China.

Huang Benjian, Guangzhou Masson Co Ltd chairman, said the stake shake up is the result of Avon and Masson's differences over re-investment of the joint venture.

"Avon's ambitious expansion plan in the coming few years will need a huge amount of money, which we cannot afford," Huang was quoted as saying.

The rule of governing direct sales is being drafted by the Ministry of Commerce and the State Administration for Industry and Commerce at the moment. It is expected to be issued by the end of the year, insiders say.

As a well-known direct seller of beauty products, Avon has 5,500 boutiques across China covering both business hub cities and smaller urban centres, and it has more than 700,000 members in itsclient club.

Source: China Daily


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