P&G to spend $100 million to build first RI factory
The Jakarta Post, Jakarta - 13/04/2011
Consumer goods giant Procter and Gamble Company (P&G) will invest US$100 million over three years in Indonesia to support the company’s market expansion in the country.
P&G vice president for ASEAN Sam Kim said in Jakarta on Tuesday that the investment funds would be used to establish the country’s first factory in Indonesia and to further strengthen distribution networks.
He said that opening the factory would be needed to support the company’s high business growth in Indonesia, one of the largest consumer goods markets in the world due to a growing middle class.
“The company’s business has grown by double digits in the last three years in Indonesia,” Kim said during the inauguration of the company’s new office at Senayan Central Building III on Tuesday.
He said that the company had not decided where the factory would be built, or which products it would produce.
Kim said that P&G, which primarily produces household and beauty products, continued to record significant growth over the last several years, with worldwide customers reaching about four billion people.
“Indonesia is very important to us, in view of its large population, high economic growth and solid political stability,” P&G Indonesia president Mohamed Ismail said. The ambitious expansion program is designed to bring more P&G consumer products, notably household and personal care products, to more consumers across the country, Ismail said.
The US company based in Ohio is the world’s largest consumer products company, which manufactures over 50 branded products and recorded $79 billion in global sales last year, will compete head on with Unilever, currently the largest supplier of consumer goods in Indonesia.
Earlier last year, Anglo-Dutch Unilever announced $240 million in additional investments to build more factories in Indonesia over the next two to three years as it prepares to compete with products from P&G, its main competitor.
The American company, however, seemed to have been disadvantaged in market competition in Indonesia because it still has to bring in most of its products from its overseas plants in other Asian countries, such as Thailand and Japan.
“Our $100 million investment program will enable us to locally manufacture more of our products here,” added Singapore-based Kim.
However, Ismail declined to divulge more details on P&G investment programs.