L’Oréal opens its largest factory in Indonesia to meet the rising demands of the South-East Asian beauty market
irror, mirror on the wall, who’s the fairest of us all? Words that can’t be taken lightly anymore, with the beauty market growing leaps and bounds worldwide, not batting its mascara-ed eyelids even to the ongoing recession. And keeping up with this trend is the South-East Asian region, where looking good has never been more important. So much so, that cosmetic giant L’Oreal has recently invested 100 million euros to open its largest factory yet in Indonesia, which will serve as the production hub for South-East Asia. 66,000 metre square of building space to keep up with the increasing demands of the region’s beauty market.
THE BEAUTY BOOM IN SOUTH-EAST ASIA
The group has been operating a factory In Indonesia since 1986, which is why Jean-Philippe Blanpain, L’Oreal’s Executive Vice-President of Operations believes the country is the perfect choice for L’Oreal’s ASEAN (Association of SouthEast Asian Nations) production hub. L’Oreal aims to reach one billion new consumers in the next decade, and foresees the fast-rising demand in Indonesia and ASEAN as the new frontiers of growth.
“With the highest growth of the group in Asia Pacific, Indonesia is a key contributor to the L’Oréal objective of reaching one billion new consumers. The Jababeka plant reflects our confidence in the continuous expansion of the Indonesian market,” affirmed Jochen Zaumseil, L’Oreal’s Executive Vice-President, Asia Pacific Zone.
Records show that the past four years have seen a tremendous growth in the beauty and cosmetics market in the region. And it’s not just L’Oreal that’s cashing in on this booming market. Latest research from Mintel reveals that the colour cosmetics market accounts for nearly a third of sales in many Asian countries and US-based NYX Cosmetics has also made its move into the region with its ‘affordable luxury’ line. Other companies in the beauty and cosmetics market in the region released sales figures for the first half of 2012 that showed a strong growth in spite of the current global market.
CONTRIBUTION TO LOCAL ECONOMY
An additional benefit to the Indonesian economy will be a growth in local employment; with a larger unit, there will be more scope for employment of local workers. In addition, the new factory will use indigenous materials and suppliers for the most part, thus pumping more money into the economy and helping the development of the industrial sector in Indonesia. In fact, ASEAN has stated that this could be an ideal model for other industries in the region.
