HONG KONG, May 13 (Reuters) - Li & Fung (0494.HK) plans to expand its health, beauty and cosmetics (HBC) business through acquisitions, aiming to double revenue from the sector to $1 billion by 2010, Managing Director William Fung said on Wednesday 13 May.

Li & Fung, "The First 100 Years" historical montage

The company's 2008 turnover totalled $14 billion, of which HBC accounted for only $300 million$-400 million.

"Health, beauty and cosmetics is our new business area. We hope to speed up expansion of this area of business through acquisition," Fung told reporters.

Li & Fung was looking at HBC-related acqusitions, especially in the cosmetics business, in the U.S. and Europe, said president Bruce Rockowitz. "Really, the cosmetics area is the growth area."

"We are conservative about aggressively taking any risk financially, but we are aggressive about getting new business and getting outsourcing deals," Rockowitz added.

CONSERVATIVE ON LARGE DEAL

Rockowitz said:"If you talk about investing in a large acquisition, we are conservative," adding that the company was keeping a tight rein on operating cost.

Last week, Li & Fung said it would sell $350 million in shares at a discount, raising capital to fund future business development and acquisitions.

"We are certainly in a good financial position," Fung said. "We have enough financial firepower to make a sizeable acquisition ... it is a matter of whether we can find an appropriate target."

The consumer goods exporter had said earlier that it expected to sign more outsourcing deals within months as cash-strapped retailers in the United States looked to cut costs in the economic downturn.

Outsourcing deals in 2009 could be similar in size to the one the company signed with fashion retailer Liz Claiborne Inc (LIZ.N) in Feb, the company has said.

ORDERS PICKING UP

Li & Fung said many of its customers had been keeping inventories at minimum levels, but the situation was changing with some key customers in the U.S. re-ordering strongly since March.

"There is a rush to get new goods into the stores, and that is positive for us," Rockowitz said. He said the onshore business was growing in certain categories like handbags, accessories and some brand businesses.

The company aimed to double U.S. onshore business revenue to $3 billion by 2010, Fung said.

Shares of Li & Fung gained 0.47 percent on Wednesday, compared with a 0.27 percent rise in broader market .HSI. (Reporting by Donny Kwok; Editing by Chris Lewis)