Cosmetic brands try to circumvent dollar

To circumvent the high-dollar, some companies of hygiene and cosmetics packaging, replace other reinforce the negotiation with suppliers or pass on part of the higher cost prices. The increase of exports and opening stores in other countries also help to offset foreign currency pressure on input costs.
The Exchange variation affects differently each segment of the industry. Manufacturers of hair products have a wide industrial base of suppliers in Brazil, while the cosmetics have 80% of imported raw materials and the fragrances, 60%, compares João Carlos Basilio, President of the Brazilian Association of the industry of personal hygiene, perfumery and cosmetics (Abihpec).
Natura says the impact of the devaluation of the real in costs has been partially offset by the greater representativity of the international operations. The company's Australian brand Aesop stores outside of Brazil. Overseas revenues rose from 18% in the second quarter of 2014 to 27% in the same period this year, while domestic sales fell 4.6 percent. The largest manufacturer of cosmetics in the country practised two price adjustments in the year from 3.7% in February and 2.5% in June, citing as a reason the high American currency.
Hypermarcas implemented adjustments of 6% to 8% in the second quarter and in July was increases according to the category, considering the dollar to $ 3.10. In a conference call on the results at the end of July, Claudio Bergamo, President of the company, said that if the American currency reached R $ 3,40, could see more transfers. The dollar was quoted at R $ 3.58 on Friday, with 34.7% appreciation in the real from the beginning of 2015.
The l'acqua di Fiori mining difficulties some months ago to import the Inizzio scents and caps the V line olgere packaging, traditional brands portfolio. To avoid shortages, has created a limited edition of national packaging products, which must remain on the shelves by the end of the year.
The company also made partnerships with suppliers, purchasing standard packaging formats or developing new templates and after some time sharing them, to reduce costs.
The group, owner of the largest Apothecary franchise chain of beauty products in the country, some are imported raw materials and other inputs, purchased from local partners, are quoted in u.s. dollars.
"It is not always possible to exchange products imported by nationals, either through technology, availability of these items in Brazil or even by the time and cost that a change of supplier would entail," said Artur Grynbaum. The company focuses its actions in negotiating with suppliers in search of operational efficiency and to obtain the best conditions of purchase. "The exchange of packages or to suppliers is not a quick measure is justified by the oscillation of the cost of the exchange rate," he said.
The Group has low exposure to the apothecary's liquid Exchange. Still, 66 percent of the total foreign exchange protection and has directly affected the portion of the cost of production without hedge is less than 3%, according to the company.
To take advantage of the dollar's climb, more companies seeking to export. The beauty care project Brazil, Abihpec's partnership with the Agency of Promotion of exports and investments (Apex-Brazil), started the year with 58 companies. The goal of reaching 65 participants until December was hit in the first half.
"There are a lot of people in the queue. Are companies with no experience in exporting, who want to learn, "said Basilio. Even on the show, getting results takes time. "It's an experience that lasts for years." The real devaluation raises the competitiveness out of the country, but some problems still are felt by exporters, as the adaptation to international health rules, the formation of contracts with importers and the weakening of the political credibility of Brazil, said Basilio.