Looking to Asia, L’Oreal Puts Priority on Indonesia
Faisal Maliki Baskoro
French cosmetics giant L’Oreal Paris is expected to build a $50 million plan to build a factory in West Java that will make Indonesia its production base in Asia, the trade minister said.
Trade Minister Gita Wirjawan, back from a two-day visit to Brussels last week to strengthen trade ties with European Union countries, said Indonesia had caught the attention of European investors.
“The response from the European business community toward investment opportunities in Indonesia was quite encouraging,” he said in a statement on Thursday. “L’Oreal Paris, for example, plans to invest up to $50 million in Indonesia and intends to make Indonesia a production base for Asia.”
L’Oreal, which produces Garnier hair products and Maybelline cosmetics, aims to produce 500 million units in Indonesia by 2015, he added.
L’Oreal announced its investment plan in February last year, saying it would put half of a $100 million investment in Indonesia toward a factory in Jababeka Industrial Estate in West Java, which it expected to start operating by the end of last year.
The factory is not yet running, but once construction is completed it will be the company’s biggest facility in the world.
Gita, who is also chairman of the Investment Coordinating Board (BKPM), said he hoped the licensing process for L’Oreal’s expansion in Indonesia moved quickly.
L’Oreal Paris is looking to bring in greater profit from its Asian markets, which contributed 3.6 billion euros ($4.7 billion) to its sales last year. That represented almost 18 percent of the company’s global sales revenue, which increased 5.1 percent last year to 20.3 billion euros.
L’Oreal Indonesia president director Jean-Christophe Letellier said last year that with operations at the new factory, the company targeted 30 percent growth in its annual sales in Indonesia.
He said the company also expected to attract 50 million new customers in the country by 2020, up from about 20 million. L’Oreal has two factories in Asia, one in China and one in East Jakarta.