L’Oreal’s to Build its Largest Factory in Indonesia

Thursday, 17 February 2011

The Jakarta Globe

L’Oreal Group, the world’s largest cosmetics and beauty company, says it is building its largest factory in the world in Indonesia.

L’Oreal Indonesia president director Jean-Christophe Letellier, speaking during a news conference at the company’s headquarters in South Jakarta on Thursday, said the factory, to be built at the Jababeka industrial estate in West Java, was expected to be operational by the end of the year.

It would be able to produce 300 million units of product annually by next year with maximum production forecast at 500 million units, Letellier said.

“The factory will become our biggest in the world and focus on consumer products, especially for Asean countries,” he said. “The Asean market is growing very fast so we have decided to build one hub that will support the growth and accommodate the entire region.”

The Paris-based company will invest $100 million in Indonesia this year, with half allocated for the new factory, he said, adding that construction began last October and was expected to be completed by this October.

Letellier said the company was targeting a 30 percent growth in annual sales, and expected to attract 50 million new customers in Southeast Asia’s largest market by 2020.

L’Oreal was founded in 1909 and has been established in Indonesia since 1979 through two entities, L’Oreal Indonesia and Yasulor Indonesia.

In Asia, L’Oreal currently has two factories in Japan and one each in China and Indonesia.

The company’s existing factory in Ciracas, East Jakarta, produces 100 million unit per year

Letellier said 75 percent of the products produced at the new factory would be exported.

“In Indonesia, we have about 20 million consumers, mostly from the middle to affluent class,” Letellier said.

He said that with Indonesia’s growing middle class, L’Oreal was looking to expand its presence.