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L'Oréal announced the opening of its largest factory in the world, a 66,000-square-meter building located at the Jababeka Industrial Estate, West Java, Indonesia (about 60 kilometers east of Jakarta). With a staged investment totaling €100 million, the new factory is set to serve as the production hub for the Southeast Asian region for L'Oréal.
"As we have been successfully operating a factory In Indonesia since 1986, the country is therefore the clear choice for L'Oréal's ASEAN [Association of Southeastern Asian Nations] production hub," said Jean-Philippe Blanpain, L'Oréal's executive vice president of operations. "Building our largest factory in Indonesia once again demonstrates our dedication to providing Indonesians and the markets in the ASEAN region products with superior quality and value."
In line with the company’s ambition to reach one billion new consumers in the next 10 years, the factory will respond to increased market demand in Indonesia and ASEAN, which represents new frontiers of growth for L'Oréal.
"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 and our strong commitment to the country," said Jochen Zaumseil, L'Oréal's executive vice president of the Asia Pacific zone.
L'Oréal's first factory in Indonesia was established in 1986 in the suburb of Ciracas, Jakarta. Due to the tremendous growth experienced over the last four years, it was decided to build a new and larger facility, and to transfer all the activities to the Jababeka plant.
Making a total of 43 L'Oréal factories worldwide, the new Jababeka plant will manufacture hair and skin care products for the mass market brands L'Oréal Paris and Garnier. Thirty percent of the production will cater to the domestic Indonesian market while 70% will be distributed to all other countries in the Southeast Asian region.
In 2013, the plant will produce 200 million units and has an installed capacity of 300 million units with the potential to reach up to 500 million units per year. The plant features state-of-the-art facilities including high-speed production lines, processing tanks with automatic recipes management, a lighting system based on movement detection, and an advanced technology water treatment plant, which is currently under development.
L'Oréal’s Jababeka plant is the first Leadership in Energy and Environmental Design (LEED)-certified factory in Indonesia and has been built following LEED requirements. These consist of a U.S. standard that defines excellence in terms of design and building construction process with regard to key aspects of sustainability, including water and energy efficiencies, atmosphere management, materials and resources utilization, and environmental quality.
L'Oréal employs nearly 800 people in Indonesia with almost 450 of them working at the new factory in Jababeka. Throughout the transfer process of the factory, L'Oréal has succeeded in retaining 96% of its existing employees from the former factory in Ciracas. In order to facilitate the move to the Jababeka premises 40 kilometers away, L'Oréal provided employees with transfer and housing incentives, and a total of 262 employees and their families have now become home owners in the surrounding areas of the new factory.
In addition, the factory, which plans to expand according to market needs, will use local materials and suppliers as much as possible. Mohamad S. Hidayat, Minister of Industry of the Republic of Indonesia, stated, "The government of Indonesia appreciates the strategic decision taken by the L'Oréal Group in supporting the development of the industrial sector in Indonesia, specifically the beauty industry, by opening their largest factory in Indonesia."