Time To Make Up?

L'Oreal CEO says his company should be judged
on its investment in Israel, not the boycott
accusations.

ALLISON KAPLAN SOMNER SPECIAL TO THE JEWISH NEWS

W

hen Lindsay Owen-
Jones was growing
up in Wales, his
mother dreamed he
would someday have a career in
the foreign service. So if she pic-
tured him traveling to Israel, it
would have been as the British
ambassador, not as the chairman
of the board and CEO of a French
cosmetics company.
But as it happens, coming to
Israel in 1995 as the top execu-
tive of L'Oreal demands just as
much diplomatic skill as any am-
bassadorship.
The reason: The cloud that has
hung over the corporate name in
recent years, owing to accusations
that the company systematical-
ly cooperated with the Arab eco-
nomic boycott of Israel during the
1980s and-early '90s.
Those accusations led to the
current investigation of the com-
pany's practices by the U.S. Com-
merce Department and a pending
lawsuit in U.S. courts by French
businessman Jean Frydman.
It is not a cloud that can or
should be brushed away with
speeches, contends Mr. Owen-
Jones, 48, a dapper man with
sharp green eyes; it only can be
dispelled with deeds.
Refusing to comment on the
accusations of past sins, which
his company has consistently de-
nied, Mr. Owen-Jones says he
prefers to focus on L'Oreal's cur-
rent direct and public investment
in Israel. L'Oreal's corporate ac-
tions, he says, should speak loud-
er than words.
And the actions are impres-
sive. Mr. Owen-Jones' visit to Is-
rael this month was to
inaugurate the first production
of a L'Oreal-brand product inside
Israel — the first such production
in the entire Middle East.
Last May, just months after
American Jewish groups called
for a boycott of the cosmetics firm,
the company acquired a $7.5 mil-
lion, 30 percent interest in Inter-
beauty, an Israeli cosmetics
concern.
The Interbeauty factory in
Migdal Ha'emek today manu-
factures L'Oreal Elseve shampoo.
L'Oreal and Interbeauty hope to
double the factory's production
within the next two years — ul-
timately turning out 4 million
bottles of shampoo — then mov-
ing on to the production of Plen-
itude skin care products.
"We are the first of the very
large cosmetic companies in the
world to make a major investment

of this kind in Israel. Perhaps that
is why I feel that we don't need to
make comments on the boycott,"
says Mr. Owen-Jones.
"We are trying to build a busi-
ness. I ask for our actions to be
judged on their merit and that's
all."
Mr. Owen-Jones also doesn't
have any time for insinuations
that L'Oreal has made such a
major move into Israel to improve
its image and defuse the contro-
versy, rather than out of pure
business motives.
"We are clearly coming here to
invest — you do not double the
production of factories for public-
relations reasons, believe . me.
There are less expensive ways of
addressing the problem. You
only do this because it makes
business sense. The numbers are
too big for it to be done for any
other reason."
If the investment in Inter-
beauty — which earned L'Oreal
an award from the French-Israeli
Chamber of Commerce for sig-
nificant investment in Israel —
wasn't enough, L'Oreal has spent
the past year covering its bases
when it comes to generating good-
will in Israel.
The company is cooperating in
a joint venture with Hadassah
Hospital and Teva pharmaceuti-
cals on a treatment for psoriasis,
and it has recently agreed to fi-
nance a scholarship program at
Tel Aviv University's Graduate
School of Management. L'Oreal
has even donated Si million to
the public campaign for safe dri-
ving.
L'Oreal can afford to be gen-
erous. The largest cosmetics com-
pany in the world, it holds 12
percent of the world market, with
annual sales of approximately
$10 billion.
L'Oreal products hold an even
heftier slice of the Israeli market
than it does the world over — 15
percent — thanks largely to its
heavy advertising on television.
Mr. Owen-Jones says the ad-
vent of commercial television in
Israel played a key role in L'Ore-
al's decision to move full force into
the country as a marketer and
manufacturer.
"With television, you have to
make a decision if you want to
stay small or if you want to be-
come big because suddenly there
is an extremely powerful medi-
um which is extremely expensive
that is available to you," Mr.
Owen-Jones says.

MAKE UP page 36

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