VZCZCXRO5650
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHWR #1131/01 1351326
ZNR UUUUU ZZH
R 151326Z MAY 07
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC 4242
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHKW/AMCONSUL KRAKOW 1697
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 WARSAW 001131 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/NCE, EUR/ERA, EB/IFD, EB/TPP 
EUR/NCE FOR DKOSTELANCIK AND BPUTNEY 
DEPT PASS USTR FOR WMOORE 
COMMERCE FOR 4232/ITA/MAC/EUR/JBURGESS, JKIMBALL, MWILSON 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV PL
 
SUBJECT: AVON POLAND: EXAMPLE OF SUCCESS 
 
WARSAW 00001131  001.2 OF 002 
 
 
SENSTIIVE BUT UNCLASSIFIED 
 
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SUMMARY 
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¶1. (SBU) Avon Cosmetics Poland is a proven success story of American 
investment in Poland.  Avon began operations in Poland in 1992 and 
in 15 years has expanded to include Avon's largest manufacturing 
facility in the world, 11 representative support centers, and more 
than 250,000 direct sales representatives.  Avon, proud to be "the 
company for women," has empowered women by offering them a solid 
career in a changing economy.  Econ Counselor and Econ Intern 
visited Avon's factory at Garwolin, which includes over 100 
production lines and 70,000 square meters of warehouse space.  Avon 
plans to continue to grow with the Polish economy and will move its 
R&D facility from New York to Poland in the near future. 
 
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Background 
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¶2. (U) Avon Cosmetics Poland opened in Poland in 1992.  Since then 
it has become the leader in cosmetic sales and other related 
products in the Polish market.  Distribution of Avon products is 
based on direct sales by Avon Representatives and, since 2001, 
ordering via the internet.  An Avon office in Warsaw handles sales, 
customer service, finance, and marketing for Poland as well as 
Central and Eastern Europe.  Avon has representative support centers 
in 11 major cities of Poland. 
 
¶3. (U) In 1997, Avon established a manufacturing plant, Avon 
Operations Poland, in the city of Garwolin, 50 kilometers from 
Warsaw.  The factory started as a 6600 square meter facility.  Now 
there are more than 100 production lines running 24 hours a day, and 
approximately 70,000 square meters of warehouse space.  In addition 
to the production and distribution areas, the Garwolin factory 
contains customs, order assembly space, and a massive warehouse for 
storage.  Avon Operations Poland is one of the largest and most 
modern cosmetics factories in Europe.  It is also the largest Avon 
facility of the 16 Avon plants located around the world. 
 
¶4. (U) In 2002, Avon developed a center for Avon representatives 
where they are able to pick up products instead of waiting for an 
order.  Additionally, in 2004, a regional testing center was 
established. 
 
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Production 
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¶5. (U) Avon Operations Poland produces 400 million tons of cosmetics 
annually at the Garwolin factory.  Each Avon factory produces 
different products, giving them the advantage to specialize and 
exchange with each other.  Avon Operations Poland manufactures 1000 
different products, specializing in skin care, color cosmetics and 
beauty cosmetics.  Avon Poland's output is 60-70 percent higher than 
any other Avon factory.  During the busiest seasons, like Christmas, 
Avon Poland operates all of its 100 production lines 24 hours a 
day. 
 
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Export 
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¶6. (U) The Garwolin facility has become the largest exporter of 
cosmetics in Poland, exporting to more than 50 countries around the 
world.  Out of the goods that Avon Operations produces, only 12-15 
percent enters the Polish market, while the remainder is exported. 
Because of this, the facility also has the largest postal service in 
Poland which makes it is easy to accommodate the 10 million clients 
they serve. 
 
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Employment 
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¶7. (U) Avon Operations employs around 3500-4500 people in its 
factory, depending on the season, and Avon's Warsaw office employs 
an additional 1500.  Avon Operations is the leading employer in 
Garwolin, reducing the local unemployment rate from 30 to 6 percent. 
 Due to the constant expansion, and high employee turnover rate, the 
Avon facility recently started looking for labor outside of 
Garwolin.  About 8 percent of factory workers are engineers, while 
90 percent of employees in the Avon's Warsaw office are engineers or 
finished some higher education.  In addition to Avon factory and 
office employees, there are more than 250,000 self-employed 
representatives selling Avon products in Poland. 
 
 
WARSAW 00001131  002.2 OF 002 
 
 
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Empowering Women 
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¶8. (U) Avon Cosmetics Polska is a self proclaimed "company for 
women," having worked to make its name synonymous with women and 
female empowerment.  As one of the largest cosmetic companies in 
Poland, Avon gives Polish women a chance for professional employment 
in a country where such involvement in the workforce is not 
encouraged. 
 
¶9. (U) Avon Cosmetics Polska is heavily involved in women's 
initiatives; its largest campaign for women is "The Great Campaign 
for Life."  It focuses on raising awareness and funds for breast 
cancer.  Since the program was launched in 1998, "The Great Campaign 
for Life" has raised over PLN 7 million ($2.5 million) to fight 
breast cancer. 
 
¶10. (U) In 2000 a contest titled "Women of Enterprise" was 
introduced.  The contest was aimed at supporting women in the 
professional working environment in Poland, and the idea was to 
reward a woman that runs her own company.  Although originally a 
Polish campaign, it is now supported by the EU.  Much of the funding 
that Avon receives for these projects are from products that are 
sold without commission, charity balls, and or festivals "Open Days" 
that focus on raising awareness of breast cancer. 
 
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Future Expansion 
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¶11. (SBU) Ever since Avon's beginning in 1992, Avon Poland has been 
growing at a significant rate.  Avon plans to move the Avon 
laboratory, currently in New York, to Poland.  The work of the 
laboratory will include research and development and the invention 
of new products. 
 
ASHE