L'Oréal Inaugurates the World's Largest Factory in Indonesia

 

L'Oréal recently announced the inauguration of a new plant in the world's biggest, which was established with the building of 66,000sqm in Jababeka Industrial Estate, West Java, Indonesia, about 60km east of Jakarta. With a total investment of Rp 1.25 trillion (€100M), it becomes the centre of production of L'Oréal in Southeast Asia.

 


“After successfully operating the plant since 1986, Indonesia is certainly a good choice as a centre of production of L'Oréal in ASEAN. Establishing our biggest factory in Indonesia once again reflects the dedication of L'Oréal to offer products with the best quality and value for consumers in Indonesia and the ASEAN region,”  said Jean-Philippe Blainpain, Executive Vice-President of Operations of L'Oréal.

 

In line with the L'Oréal Group's ambition to reach 1 billion new consumers in the past 10 years, the factory is a response to growing market demand in Indonesia and ASEAN represents a new potential for the growth of L'Oréal.

“In Indonesia, L'Oréal business continued to show a good performance with an average sales growth to +30%, which makes L'Oréal Indonesia as one of the major contributors to the growth in the Asia Pacific region,” said Vismay Sharma, President Director of PT L'Oréal Indonesia.

 

Leading facility dedicated exclusively for consumer products

L'Oréal first factory in Indonesia was established in 1986 in Ciracas, Jakarta. With the rapid growth in the past 4 years, L'Oréal decided to build a new and larger facility, and move all production activities to a new plant, located at the Jababeka.

As a manufacturer L'Oréal to-43 in the world, the new plant will produce Jababeka hair and skin care products for brands mass-market segment, namely L'Oréal Paris and Garnier. 30% of the production will be allocated to the domestic market while 70% of production will be distributed to other countries in Southeast Asia.

In 2013, the factory is expected to produce 200 million units and has an installed capacity of up to 300 million units, with a potential reach production capacity of 500 million units per year. The factory is equipped with leading-edge facilities such as high-speed production lines; tank processing with automated dispensing systems management; lighting system based on movement detection, as well as the latest water treatment technology that is still under construction.

 

Commitment to sustainable development

The factory was built with LEED requirements, a standardisation of the United States that places excellence of design and building process on key aspects of sustainable conservation, including energy and water efficiency; setting the air, use of materials and natural resources, and environmental quality.

“This certification makes L'Oréal factory as the first factory to earn LEED Silver certification in Indonesia,” said David Quetin, Factory Director of L'Oréal Indonesia.

He adds, “We are committed to continuously reduce the impact on the environment and is currently conducting several studies to create and support renewable energy sources.” Since 2005, L'Oréal Indonesia has reduced waste and water consumption per unit by 52% and CO2 emissions per unit up to 38%. L'Oréal is the target to reduce absolute CO2 emissions by 50% from 2005 to 2015 (from 2,000 to 1,000 tons).

 

Contribution to Community and Economy

L'Oréal employs a total of nearly 800 employees in Indonesia where about 450 men working at a new plant in Jababeka. In the process of moving the factory, L'Oréal may retain 96% of employees of the old factory in Ciracas. To facilitate the shift to a new plant in Jababeka within 40 km from the old mill, L'Oréal provide housing and transportation incentives for employees. Today, about 262 families of employees can have a place to stay around the new plant.

In addition, the plant is planned to be developed based on the needs of this market, will also seek to maximise the use of local materials and suppliers. L'Oréal also built a mosque for the local community, where workers and communities can use to worship together.

Mohamad S. Hidayat, Minister of Industry of the Republic of Indonesia asserted, "The Indonesian government appreciates the steps taken by the L'Oréal Group in support of the development of the industrial sector in Indonesia, especially the beauty industry, through the opening of their factory in Indonesia."

M. Chatib Basri, the head of the Investment Coordinating Board of Indonesia added: “L'Oréal decision to build the world's biggest factories in Indonesia and chose Indonesia as a production hub for the Southeast Asian region, is a major breakthrough in the history of investing in Indonesia. Indonesia is a reflection of the radar return of the investment world.”

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