
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, June 19, 1990                   TAG: 9006190426
SECTION: BUSINESS                    PAGE: A-5   EDITION: EVENING 
SOURCE: Los Angeles Times
DATELINE:                                 LENGTH: Short

AVON CALLING ON CHINESE HOMES

Avon Products, the New York-based cosmetics company plagued by poor earnings and takeover threats the past two years, is venturing where few American companies have gone recently: China.

Avon has formed a joint venture with the Guangzhou Cosmetics Factory in the southern city of Canton to manufacture and sell cosmetics. Avon executives already have begun to select equipment for the plant and to develop training materials for sales representatives and supervisors. The venture expects to launch sales operations by October.

The pace of international investment in China has slowed since the June 1989 massacre of pro-democracy demonstrators at Tiananmen Square in Beijing. Asian trade consultants said the Avon deal may be the first major China venture by a U.S. firm since the crackdown.

"Generally, U.S. companies concede - wherever one invests - that you have to take the human rights into consideration," said Timothy Smith, executive director of the Interfaith Center on Corporate Responsibility, a New York-based coalition of church-related shareholder groups.

"Has the human rights situation improved?" he asked. "Is Avon following the human rights situation in China?"

Avon President James Preston said he considered the views of those opposing new American investment in China before deciding to approve the venture.

"I decided that this was a commercial endeavor - not a political endeavor," he said. "The venture will not benefit the government of China; it will benefit the women of China and Avon's shareholders."

Preston said Avon won't make a profit the first three years, partly because of start-up costs.

by CNB