NIVEA products are on display at a retail counter in Changzhou, Jiangdu province, on Oct 6, 2024. [Photo/VCG]
Nivea, using its parent company Beiersdorf's patented anti-spot ingredient Thiamidol 630, will start mass production of its new product in its Shanghai facility in July, with roll out to the market expected two months later.
The announcement was made by Ketin Lei, the general manager of Corporate Affairs at Beiersdorf China, during a media briefing on Friday.
The ingredient, which was approved by Chinese regulators in November, is the first spot treatment ingredient to receive regulatory green light since China's new Cosmetics Supervision and Administration Regulation took effect in January 2021. It also marks the second spot treatment ever approved in China, with the first one approved 12 years ago.
With such regulatory consent, Beiersdorf plans to invest in more local research and development, which can be translated into an additional 1 billion yuan ($130 million) in industry value and 100 million yuan of tax income to Shanghai on a yearly basis. With the approval of the new ingredient, Lei said the Shanghai production base will grow into Beiersdorf's skincare product center for Northeast Asia.
To make the mass production of Thiamidol 630 products possible, Beiersdorf has pledged $31.42 million of capital injection into Nivea Shanghai Co Ltd, which can be used for updating production lines, R&D and marketing. This is the largest capital increase that the group has made for the Shanghai company in 10 years, according to Lei.
The successful registration of the new ingredient, which was made via Nivea Shanghai, is attributed to abundant talent supply and various government services, said Lei.
In 2020, Beiersdorf secured its new research and innovation center in Shanghai, the biggest outside its headquarters in Hamburg, Germany. As the second of its kind for the German skincare company, the new innovation facility in Shanghai attracted a total investment of about 10 million euros ($10.8 million).
Various experts gathered at the Shanghai innovation center, covering product safety, efficacy and chemical structure, have made enough preparation for the registration of the new ingredient. Meanwhile, the accessibility of various resources in Shanghai, including talents, have made the comprehensive operation costs more acceptable, said Lei.
The on-site guidance from the municipal medical products administration and the special government service team from the Qingpu district have largely improved the communication efficiency with the top regulators, he added.
More innovation results have been coming from Beiersdorf's Shanghai innovation center. It has used a robot for product activity and stability testing, which takes eight months for humans to complete. As the first of its kind among all Beiersdorf's operations, the robot is 100 percent developed in Shanghai. Not only liberating manpower for more creative jobs, but the robot can also connect to artificial intelligence for assisting new product development.
While Shanghai saw some slowdown in the value of foreign investment last year, companies' interest in setting up new operations in the city remained high, according to Chen Hao, director of the foreign investment department at Shanghai Municipal Commission of Commerce.
About 6,000 new foreign-invested companies were registered in Shanghai in 2024, adding a total of 60 multinational companies' regional headquarters and 30 R&D centers in the city. As a result, the value of foreign capital utilization in the business service industry, brought by the regional headquarters, jumped 56 percent year-on-year in 2024, according to Chen.
To solicit foreign investment in a more precise manner, the municipal government aims to attract the innovation, treasury, shared service and centralized procurement centers of multinational companies. In addition, efforts will be made to attract more multinational companies to move their global headquarters for a certain business unit to Shanghai, he added.
