Fosun to Expand Dead Sea Cosmetics With Chinese Friendliness

YERUSHALAYIM -

There are two reasons for the Chinese Fosun Group’s confidence in developing its new acquisition, Ahava Dead Sea Laboratories, into a global cosmetics superpower:

First, as Fosun Capital director Joe Yizhou He told Globes on Wednesday, “Ahava is the best known brand in the world in its field, and most of its customers today are tourists visiting Israel from China and buying the products. [That’s] an indication of the great inherent sales potential in the company’s business in China.”

“The flow of tourists from China to Israel will increase in the future,” Yizhou He predicts. “In the next 5-10 years, middle class people in China will become the main source of purchasing power, and they have the ability to travel around the world and buy personal care products like those of Ahava.”

As for the rest of the world, Fosun admits to no apprehension about marketing an Israeli brand at a time when the BDS appears to be gaining ground. Ahava itself has been targeted by the BDS campaign, and was forced to close down its London branch following protest demonstrations. The company’s plant in Kibbutz Mitzpe Shalem stands outside the Green Line.

Yizhou He indicated that Fosun will carefully avoid known flashpoints, and will also rely on the good will that China projects everywhere.

“I don’t think that there’s hatred for Israel everywhere in the world, and we don’t plan to promote the product everywhere in the world. China is a friend of every country, so there won’t be any problem in promoting Ahava sales there.”

He hopes to make friends with the company’s current management as well.

“Fosun is usually very friendly to the management of the companies it acquires, because it believes that if the company’s current management isn’t good, there’s usually no reason to invest in it anyway…and we hope that the current management will be able to cope with the planned expansion in its business after we get involved, and can get accustomed to the new situation and challenges.”

The company has 225 workers, and has stores in over 30 countries. Its revenue totaled NIS 184 million in 2015, unchanged from 2014.

Ahava Dead Sea Laboratories signed an agreement at the beginning of this week for the sale to Fosun Group for NIS 290 million, concluding months of negotiations. Completion of the deal is expected within several months, subject to several conditions.