Just short of completing 26 years in the business of beauty and wellness, VLCC Healthcare Ltd. is creating a joint venture with Korean biotechnology company Caregen Co. Ltd. to aid in development of a cosmeceuticals business.
The resultant company is called VLCC Caregen Pvt. Ltd. with each partner holding a 50 percent stake.
VLCC, which has beauty and slimming clinics as well as retails skin, body and hair-care products crossed the 10 billion rupee revenue mark, or $158 million, in 2014, and set aside 2 billion rupees, or $ 31.5 million, for acquisitions and expansion.
“Caregen’s products and solutions will complement and enhance our existing portfolio, which comprises of products from India, Malaysia, Singapore and Switzerland,” said Mukesh Luthra, chairman of the VLCC Group. “Korean people demand perfection, especially when it comes to skin-care products, driving innovation in the industry. With our tie-up with Caregen, we are bringing the best of Korean technology to our customers.”
Caragen is known for its cosmeceutical range and strength in the antiaging market with brands such as Dermaheal which has products for antiaging, antipigmentation, antihair loss and antinflammation.
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Distribution covers 25 countries in Asia, North and East Africa. The company also focuses on raw materials for cosmeceuticals, such as biometric peptides.
Yongji Chung, chief executive officer of Caregen Co. Ltd. stated that the collaboration would open up a whole new market for the brand.
“I wanted to transform how people live by providing them a complete wellness solution from head to toe,” said founder and owner Vandana Luthra, who started the company. It now has 300 beauty and slimming centers across 121 cities in India and 16 countries internationally, including India, Sri Lanka, Bangladesh, Nepal, Malaysia, Singapore, the UAE and Kuwait.
Caregen also retails more than 100 stockkeeping units for skin, body and hair care. Industry analysts observe that the company has been growing at more than 30 percent a year in the last five years, supported by 54 training academies, in India and other countries.
New funding came from global brokerage and investment firm CLSA in 2004 and from private equity firm Everstone Capital in 2007. The new financing set a path of expansion for Caregen. Each of the companies had invested between $10-$15 million.
Among the acquisitions — Wyann International in Malaysia in 2012 which owned and operated 22 slimming and beauty outlets across Malaysia and markets innovative products such as Bizzy Body, Facial First. The Singapore-based Global Vantage Innovative Group was acquired in 2013. It manufactures and retails cosmetics products and solutions. There also was a 70:30 joint venture struck with Kenya-based Sameer Group in 2013. This was a fast track into the African wellness market. Indian consumer goods companies, such as Godrej and Marico, have been investing as well.
“The wellness industry in India is at a crucial juncture where it is poised for higher growth,” said Sandeep Ahuja, managing director, VLCC Healthcare Ltd. Both beauty and wellness in India have been growing at 18-20 percent a year, and as Ahuja projects growth for the company, he means to stay ahead of the curve.