Oriflame owner bets 20 million euros on development of middle class

The owner of the cosmetics producer Oriflame, Jonas af Jochnick, has announced his intention to invest up to 20 million euros in Romanian distribution and logistics companies, and in domestic service providers over the next few years.

Jonas af Jochnick, 67, established Oriflame together with his brother Robert in 1967.

Jochnick is indirectly the majority shareholder in Medicover and the investment fund Oresa Ventures, both of which are already present on the Romanian market.

“The more Romania’s economic situation improves, the more developed the middle class will become, improving living standards and demanding quality services. This is why I believe there is tremendous development potential for distribution companies and service providers,” the Swedish billionaire told Ziarul Financiar in an interview while in Bucharest.

“There’s a big difference between the Romania of 2004 and the Romania of five or six years ago. People are changing their attitudes, and this shows in the meetings we have with our Romanian business partners.” The potential of the Romanian market comes from the 22 million consumers, on the one hand, but also from Romanians’ professional training and knowledge, Jochnick explained.

Oresa Ventures is one of the main shareholders in Flanco (a home appliances chain), Credisson (consumer finance) and La Fantana (drinking water supply services).

“We are not planning an exit from the companies we are invested in for the time being, but will instead extend our stay with those companies. As far as Flanco is concerned, we are even considering a possible floatation on the Bucharest Stock Exchange,” explained Jonas af Jochnick. Oresa holds a stake in Flanco alongside another investment fund, Danube Fund, and company founder Florin Andronescu.

The Swedish businessman will focus on the private health insurance market in coming period, which it plans to enter early in 2005 through the partnership of Medicover with Aviva insurer.

“Our investments will not go to insurance companies, as long as those operating on the Romanian market have a competitive management and sales force,” said Jochnick, who believes Medicover’s business will develop as hospitals in Romania are privatised and private enterprise will come to be seen as a necessary element in the health care system.

Medicover’s development policy entails expansion on regional markets, with the Slovakian market being a priority.

As to La Fantana, which is specialised in distributing and maintaining water coolers, Jochnick says its second year of business in Serbia yielded positive results, with future plans including expansion to the Ukrainian and Bulgarian markets.

Oriflame has a strong presence on Eastern European markets; Jochnick ruled out the possibility of establishing a factory in Romania, however.
alexandru.cerchez@zf.ro