| JABABEKA, Indonesia
JABABEKA, Indonesia Nov 7 L'Oreal,
the world's biggest cosmetics group, sees sales in Indonesia
growing 30 percent in 2012 and next year, making it the firm's
fastest growing Asian market, executives said on Wednesday.
L'Oreal opened its biggest factory globally in the country's
main Java island on Wednesday, with investment of 100 million
euros over several years, as it eyes growing middle class wealth
in the world's fourth most populous nation.
The plant will make 200 million hair and skin products next
year under its L'Oreal Paris and Garnier brands, with 30 percent
for the local market and the rest for export to Southeast Asia.
Foreign firms manufacturing products within Southeast Asia
get tariff-free shipments within the region of 600 million
people, under a free trade pact by the Association of Southeast
Asian Nations (ASEAN). L'Oreal has followed other firms this
year in making Indonesia its manufacturing hub.
L'Oreal sees the beauty market in Indonesia growing from 1.5
billion euros now to be worth 5 billion euros by 2025, said the
firm's Asia-Pacific Managing Director Jochen Zaumseil.
"That's the size of the total ASEAN beauty market now,"
Zaumseil said, before joining the country's investment chief in
cutting a ribbon of jasmine flowers to launch the plant, where
gleaming steel tanks and automated production machinery gave off
a smell of moisturiser.
The plant has a potential capacity of 500 million hair and
skin products a year. L'Oreal is vying to take market share from
Indonesian leader Unilever , which is also
seeing double-digit sales growth and expanding production.
Both firms say they are gaining market share. L'Oreal's
Indonesian sales growth jumped to 300 percent for men's
"We think Indonesia will be the number three beauty market
in Asia," said Zaumseil, adding the firm sees it as a world top
15 market by 2025. "These are very aspirational consumers."
The G20 member's strong economic growth of around 6 percent
a year could lead to an additional 90 million members of the
"consuming class", or a new market bigger than the population of
France, Zaumseil said.
L'Oreal's optimism on Indonesia contrasts with "brutal"
trading conditions in South Korea and Taiwan this year for its
luxury products, which include Yves Saint Laurent perfumes and
Biotherm and Lancome creams. It has also seen a slowdown in
China, the main driver of luxury goods in recent years.
It is still expanding production in other emerging markets,
with a new factory in Mexico this year and another planned in
Egypt for next year, Zaumseil said.