Amway India is embarking on expansion plans in India which include manufacture of its high-end Artistry range of cosmetics and setting up an R&D Centre, only its second outside of the US, William Pinckney, MD and CEO, told Business Line .

He was speaking during an interaction at Baddi, Himachal Pradesh, where the wholly-owned subsidiary of the direct selling American FMCG company Amway Corporation makes over 85 per cent (by volume) of its products sold in India through an exclusive, third party manufacturing arrangement.

Amway has been in India for over 15 years. Why did it take so long to set up your own manufacturing facility?

When we came in 1995, we wanted to invest, but the Government was keen to develop the small scale sector. So our agreement was that we would invest in this sector. It took us three years to transfer technology to Sarvottam Care (our manufacturing partner).

You have just announced plans for your first Greenfield plant in India. Once this becomes operational, will you stop contract manufacturing?

No, the Nilakottai plant (in Tamil Nadu) will not replace our existing capacity, but add to it. Logistically, then, we will have plants both in the north and the south to support business growth.

In the first phase, we will also use only half the 50 acres at Nilakottai. The remaining will be in reserve for further expansion.

Will you manufacture products outside the current India portfolio?

Amway has over 450 products in its global portfolio, of which 140 are present in India. We will launch 8-10 new products every year.

At Nilakottai, the focus will be on health and beauty products. The factory (which will be operational in two years) will be sophisticated enough to make our high end cosmetic range Artistry, which has been ranked alongside brands such as Estee Lauder and Lancome. At present, these products account for 3-4 per cent of our sales and are imported.

Will local manufacture help lower the price? Also, the brand is hardly known in India.

Economies of scale will of course benefit prices, but it will depend on the cost of raw materials. Today, 150 raw materials, mostly for nutrition products, are imported.

We want to source more locally as we have seen an improvement in standards of quality and consistency.

Yes, we will have to build the Artistry brand in the Indian marketplace. You will start to see commercials, and product promotions.

We expect to spend around Rs 45 crore during 2013 for promoting Artistry and our Nutrilite brand.

Can you elaborate on your R&D centre plans?

In the next three years we want to open an R&D Centre that will initially focus on products for India and have a view on how to take them outside. As of today, Amway has only one R&D centre outside of the US, in Shanghai.

We are encouraged by our work with the Attitude range of cosmetics developed only for the Indian market. This found interest in Europe where it is sold as ‘Beauty Cycle’ and in Latin America as ‘Moiskin’.

Also, Ayurvedic products are huge here, and not known anywhere else, so that can be an interesting opportunity. This of course, is my personal view.

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