With full-scale production capabilities of 200 million cosmetics per year in China, the colour cosmetics facility in the Fengcheng District, Shanghai, China will focus on building its annual output and localisation within China.
As of 1st October 2016, China's Ministry of Finance abolished its consumption tax on existing cosmetics and decreased it to 15% for luxury cosmetics, encouraging trade.
Production output in China
Building upon the annual production capabilities of its existing plants in Shanghai and Guangzhou — with production capacities of 250 million and 100 million, respectively — Cosmax anticipates that its third production system in China will add a further 200 million pieces per year to the total.
As a result of the latest launch, the company will now be able to provide 550 million production units a year in China alone.
"Cosmax China will respond promptly to customer needs and market fluctuations through [the] stable supply of products in the growing Chinese cosmetics market," said Lee Kyung-soo, Chairman of Cosmax.
"The opening ceremony of the exclusive factory for colour cosmetics was made possible thanks to the support and support of Shanghai government officials and customers," Kyung-soo, added. "We will also be able to help domestic customers to enter the Chinese market directly."
Local benefits
Following the decision to contrast a new cosmetics facility, Cosmax has sought cooperation from Shanghai’s provincial government, in a bid to create incentives to help encourage job opportunities and contribute to future developments in the local area.
"The local response to Innovation products of 'Made In Korea' is very hot in the 5 trillion won market in China," said Choi Kyung, Vice Chairman of Cosmax China.
China is the second biggest global cosmetics market after the US, and over 85% of Cosmax’s total shipments go to consumers in China. As a result, the company believes that its latest 37,752 square metre facility will enable it to continue its popularity and strength within China.
With ongoing overseas operations in Indonesia and the US, Cosmax is now capable of producing over 1 billion units, representing the largest production of an original design manufacturer (ODM) in a single market.