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February 27, 2015
By Cynthia Martens
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Lombardy: Cosmetics Central
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Visitors to this northern Italian city mightnot immediately realize it, but they’re atthe heart of the beauty business.
All together, Italy produces 65 percent ofthe world’s makeup. The region ofLombardy alone counts about 520 of thecountry’s estimated 1,000 cosmetics firms.Of those 520, 54 percent are in theprovince of Milan, according to recent datafrom Cosmetica Italia, the Italian tradeassociation of cosmetics companies.Lombard cosmetics exports account for 63percent of the Italian total, and in 2013(the most recent figure available), Italy’scosmetics trade balance hit 1.54 billion
euros, or about $2 billion at average exchange. That’s higher than the balance forpasta (1.25 billion euros, or $1.66 billion); yachts (1.18 billion euros, or $1.57 billion);steel tubes (930 million euros, or $1.2 billion) and helicopters (830 million euros, or$1.1 billion).
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Whereas certain cities and districts in the fashion and textile sectors are known fortheir hosiery, denim cloth or woolens, throughout Italy beauty companies produce allsorts of cosmetics and fragrances. What’s remarkable is the abundance of thesebusinesses up north: Of Italy’s 35,000 people directly employed in the cosmeticsindustry, 18,000 work in Lombardy.
The region’s citizens spend more money on cosmetics than other Italians, too:whereas in 2014, the average Italian spent 150 euros ($199) on beauty products, theaverage Lombardy resident spent 195 euros ($259.)
“Lombardy is a region that has always represented the highest concentration of ourcountry’s GDP — it’s no coincidence that Milan is the economic capital and Rome isthe political capital,” said Cosmetica Italia president Fabio Rossello. He noted thattogether with other northern Italian cities, such as Turin and Genoa, Milan has longbeen an industrial hub, “a kind of Italian London” that is businesssavvy and morecosmopolitan than other parts of the country.
Still, Rossello acknowledged that many people more readily associate Italy with wineand beautiful shoes than with cosmetics, and Milan is famous as a fashion, rather thanbeauty, capital.
“I believe that cosmetics companies here have focused more on doing thanpromoting,” he said.This year, with Milan hosting the World Exposition from May 1 to Oct. 31 and morethan 20 million people expected to flock to the city, the local cosmetics industry hopesto change that perception. Cosmetica Italia has teamed up with BolognaFiere, theparent company of trade show Cosmoprof, as official partner of the Expo BiodiversityPark and Organic and Natural Pavilion.
“We will be using this as one of several ‘trampolines’ to make this sector better known,as it deserves to be, in Italy itself, as well as abroad.…If we are able to produce somany things here, it’s because we’re able to combine great quality with creativeability” and artistic passion, Rossello said.
Renato Ancorotti, founder and president of Ancorotti Cosmetics, said that while Italy’smakeup supply chain flies under the radar of many consumers, the country’s highquality, innovative products have no trouble attracting top brands as customers.
“I would like our region to recognize the cosmetics industry’s contribution to theeconomy and to the job market a little more,” he said, adding that local universitiesshould tailor more businessrelated courses, so students interested in the beautyindustry are better equipped to start their careers.
Ancorotti Cosmetics, founded in 2009, is considered an expert on mascara, producing14 percent of the world’s billion pieces sold annually. That’s no small feat, consideringabout half of the total is manufactured inhouse by brands. The firm employs 130people directly, and derives 85 percent of its turnover from exports, with France, otherEuropean Union countries and the U.S. among top markets.
Ancorotti credited powerhouse Intercos, founded in 1972 by Dario Ferrari, withcementing Lombardy’s role as a beauty mecca in the Eighties. That firm, known for itshightech and stylish lipstick, eye shadow, mascara, foundation, powder, pencils, nailpolish and skincare products, closed 2014 with gross sales of 354 million euros, or$470 million at average exchange, 54 percent of which was tied to its Italianproduction sites. Last December, Intercos inked a deal with American private equityfirm Catterton, which acquired a 43 percent stake in the cosmetics supplier just overtwo months after it canceled a planned stock exchange debut.
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A spokeswoman said that Intercos employs 3,420 people worldwide, 1,080 of whomwork in Lombardy, where the firm is headquartered. Intercos has branches around theworld, including in China, the U.S., Switzerland, the Netherlands and Brazil.
Fabio Franchina, president of hair product company Framesi, agreed that Lombardy’s“cosmetic valley” offered an appealing combination of technology and creative flair.
“We have a high concentration of small businesses, specialized in niche categories andnot very outwardly visible. The big multinationals aren’t here. When people think ofcosmetics, they usually think of the big French and American brands,” Franchina said.
Framesi turns 70 this year. It employs an estimated 220 people directly and indirectly.The company counts 10 production plants and serves 45,000 clients internationally;70 percent of its consolidated turnover is from exports.
Alessandro Palmitano, development and quality control manager at Milanesecosmetics and skincare brand Collistar, said Lombardy is dense with manufacturingcompanies that invest heavily in research and development, and have patentedtechnologies.
“It’s important to note that Italy stands out for its strong push on innovation, whichsuppliers invest in — and their export figures are extremely high,” he said.“Suppliers…since they aren’t brands, don’t communicate what they do and how theydo it: This leads to a misconception that their role doesn’t add value.
“Most of our suppliers are from Lombardy, specifically from around Milan andBrescia, as are warehouse employees and a large number of staff at Collistar’sheadquarters, as well as various sales agents,” Palmitano added.
Fragrance is another Lombard specialty, with two major perfume producers justoutside Milan: ICRITF, based in Lodi, and Euroitalia, located in Cavenago di Brianza.
Milan’s international renown in the fashion industry, combined with the city’sindustrial heritage, facilitated the growth of the local fragrance sector, said RobertoMartone, president and chief executive officer of ICR and vice president ofdistribution arm ITF. The firm makes and distributes fragrances for Dsquared2,Pomellato, Blumarine and Trussardi.
He said about 70 people work for ITF, 550 at ICR and another 100 indirectly for both.“The majority are women from Lodi. Originally, the factory was in Milan, and about80 people worked there, then the move increased development around Lodi,” Martoneexplained.
Giovanni Sgariboldi, president of Euroitalia, said his firm employs about 50 peopledirectly. “Many are from the province of Milan, and we work with a lot of companiesin Brianza [a halfhour drive north of Milan],” he said.
Euroitalia holds the licenses for Versace, Moschino and John Richmond fragrances,and it also produces makeup for NajOleari. Exports account for 92 percent ofEuroitalia’s turnover.
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