After more than three decades of operations, Swedish cosmetics giant Oriflame has announced plans to close its factory in Warsaw’s Ursus district. The move, part of the company’s broader restructuring strategy, has left many wondering about the future of foreign investments and business in Poland.
A Factory That Shaped Polish Cosmetics
For 32 years, the Oriflame factory in Warsaw was a vital part of the brand’s global production. But now, the company says it will wind down operations over the next two years. Instead of producing its own goods in Poland, Oriflame plans to outsource manufacturing to “high-class partners” across Europe.
Why is Oriflame Leaving Poland?
The company points to a perfect storm of global and local challenges. Like many businesses, Oriflame thrived before 2020, enjoying steady growth. However, the COVID-19 pandemic, skyrocketing inflation, and the ongoing war in Ukraine disrupted their business, shrinking their revenues from €1.3 billion in 2018-2019 to a projected €660 million in 2022.
Poland’s rising costs, particularly for labour and energy, only added to the problem. For a company under pressure to cut expenses, continuing production in Poland simply became too expensive.
Economic Clouds Gather in Poland
Oriflame’s decision to leave isn’t an isolated case. Over the last several months, more and more companies have either scaled back their presence in Poland or left altogether. Critics blame the current government for failing to create a stable economic environment. High inflation, rising operational costs, and uncertainty for investors have all made Poland a tougher place to do business.
The closure of the Oriflame factory is a blow not only to the hundreds of employees who will lose their jobs but also to Poland’s reputation as a place for foreign companies to grow and thrive.
Read more: Oriflame to Close Its Polish Factory: What’s Behind the Decision?