Avon switch good news for Poland

Avon's Polish workers earn about £4,000

As Avon Cosmetics closes its Northampton factory and switches production to Garwolin in Poland, BBC Look East Business correspondent Richard Bond finds out why.

The town of Garwolin is a rather dreary place 40 miles from Warsaw, but it will save the Avon cosmetics company millions because of its low average wages.

The brand new Avon factory will double in size, thanks to the closure of the facility at Northampton.

At Garwolin workers earn about £4,000 a year. In Northampton factory pay is £13,500.

Production costs in Poland are less than half those at the facility in England.

Darek Krawczyk: Will build a new house

In all, 465 jobs will be lost at the cosmetics factory in Northampton. A group of 172 workers had their last day on Friday.

Head of Polish operations Maciej Rybicki scanned the growing factory.

"This was a green field operation... it was a corn field when we first saw it. Now we have one of the largest Avon operations in the world, with exports reaching 85%. We are very proud of this."

In a country where one in five of the workforce is unemployed, a job with a foreign company is sought after.

Rafal Michalik is a porter, keeping the lines supplied with components.

"In our country there is a huge unemployment problem. So for this facility to be built here, with 1,700 jobs, is very good news for the whole area," he said.

Trend to move

Workers live in accommodation blocks. Darek Krawczyk is an Avon shift leader. His tiny three-room flat houses him and his wife, their two children and his parents-in-law.

"It is cramped but my job at Avon means we're building a house nearby. When it's finished, it will give us more space," he said.

By moving production to Poland, Avon is merely falling in line with a trend.

Expensive factories in Britain, Germany and France are being closed, and replaced by cheaper ones in eastern Europe and China.

As well as Avon, household names such as Dyson and Thermos have moved production to low cost countries.

New industries

Professor Mike Sweeney, of Cranfield School of Management, said the changes were inevitable.

"What is required of government is to encourage newer industries that are knowledge-intensive to take the place of those that are moving offshore."

According to Avon that is crucial to the future of remaining staff in the UK, including 700 at the Corby distribution centre.

Savings will be ploughed into research and development to keep Avon competitive.

With other cosmetics firms also setting up in eastern Europe, Avon has little choice but to go with the flow.