O Boticário receives funding from BNDES to invest in the Northeast.

BNDES

The Brazilian Development Bank (BNDES) has approved financing of R$ 306,1 million for the expansion of investments by the Boticário Group in Brazil, mainly in the Northeast region, with the construction of new production units and expansion of its store network in several Brazilian states.

The approved project includes a groundbreaking operation for the franchise sector, which will facilitate franchisees' access to long-term resources from BNDES (Brazilian Development Bank). O Boticário, through its subsidiary Boticário Franchising, will act as an anchor company, channeling BNDES funds to small franchised businesses of the brand.

This segment of entrepreneurs will have access to R$ 21,8 million to invest in opening new stores and new franchise operations. It is estimated that the funds will be used to open at least 148 units of the network.

The franchise network is the traditional distribution channel for the Boticário group. However, due to the difficulty small franchisees face in raising long-term capital, most end up resorting to short-term loans (working capital) on the market, incurring higher interest rates and restricting their financial capacity.

The process of transferring funds to franchisees will have the same financing conditions that BNDES offers to micro, small and medium-sized enterprises, with the best conditions from the Bank.

Other investments – Of the total financing approved by BNDES to the Boticário group, R$ 270,8 million will be allocated to the implementation of an industrial unit in the municipality of Camaçari, in Bahia; to investments in assembly and installations at the distribution center in the municipality of São Gonçalo dos Campos, also in Bahia; and a social project focused on professional training in the communities surrounding the projects.

The new industrial building, to be constructed at the Camaçari unit, will have a total area of ​​45,2 square meters and will be dedicated to the production of creams and hydroalcoholic products for the group's various product brands, complementing the production capacity of the São José dos Pinhais plant in Paraná.

With 35 square meters of built area, the distribution center in the municipality of São Gonçalo dos Campos will aim to distribute the production of the Paraná unit to the North and Northeast regions of Brazil. This will allow for greater proximity to consumers in these regions, as well as reduce distribution costs and delivery times.

An additional R$ 13,5 million will be invested in expanding the group's store network throughout the country, with the opening of approximately 60 new company-owned stores in 2013. The Boticário group's expansion in retail aims to meet the growing demand in the Brazilian market for personal hygiene, perfumes, and cosmetics. In Brazil, this market has been growing at rates exceeding 10% per year, above the world average.

The Boticário group's ventures are expected to generate around 900 new direct jobs, in addition to 1,1 indirect jobs created with the expansion of the franchise network. Job creation, especially in the Northeast region, is one of the main social impacts of the group's new investments.

The community-focused social project will include investments in vocational training, with the main objective of social inclusion and mobility. The group will invest in specific facilities for this purpose in municipalities that have a shortage of skilled labor and in the vicinity of the company's units. Vocational training courses will be offered, aimed at the retail and industrial sectors, as well as professional technical courses.