Lee Kyung-soo, chairman and chief executive of Cosmax, center, poses with Stu Dolleck, president of NuWorld Beauty, second from right, and Jonathan Rosenbaum, chief executive of NuWorld Beauty, far right, after signing an acquisition deal at Cosmax headquarters in Pangyo, Gyeonggi, on Monday. [Photo provided by Cosmax Inc.]
Cosmax Inc., South Korea’s leading original development manufacturer (ODM) of cosmetics, said on Monday that it has signed an agreement with NuWorld Beauty to acquire a full stake in the U.S. cosmetics developer and manufacturer for $50 million.
The acquisition - which is the second of its kind in the United States after Cosmax acquired a manufacturing site in Solon, Ohio, from L’Oreal in 2013 - is expected to pave the way for the Kospi-listed company to advance into the U.S. market and make the company the world’s top in cosmetics ODM market.
Cosmax plans to enhance its local manufacturing facility as well as research and marketing organizations to gain a competitive edge in the U.S. cosmetics manufacturing market.
NuWorld, which was established in 1991, is the third-largest manufacturer of cosmetics products in the U.S. and manages 13,223 square meter manufacturing facility in New Jersey. The company expects to report around 10 percent growth in sales this year from $105 million last year. About 1,000 employees work for NuWorld that is engaged mostly in the manufacturing of cosmetics products, nail color, and fragrances.
Under the agreement, Cosmax and NuWorld will join forces to command dominant position in the U.S. cosmetics ODM market, diversify business model, cut manufacturing cost by securing research and manufacturing infrastructures and boosting automation, and expand exports by enhancing customer service.
An unnamed official from Cosmax said that the company will strive to increase efficiency in overseas production and secure customers not only in the U.S. but also in Europe. The latest acquisition will help the company reach its long-term goal of raising 3 trillion won ($2.7 billion) in sales by 2020 and also make it the world’s largest cosmetics ODM maker in terms of annual manufacturing capacity reaching over 1.6 billion units in 2017. The company has facilities in Korea, China, U.S., Indonesia, and Thailand.
By Lee Young-wook and Lee Eun-joo
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