LOréal opens new production plant in Indonesia

The LOréal group has inaugurated a large new production plant at Jababeka in Indonesia with the aim of strengthening its presence in the emerging markets of South-East Asia. The move comes as Asian market growth has faltered though the fourth quarter of this year is expected to be slightly better overall. Mass market cosmetics sales growth has held up better than the luxury segment.

The plant is being built at a cost of €100m and has enabled LOréals existing local plant to be shut down. Some 500 reference products will be manufactured including hair care and skin care ranges mainly for the Garnier and LOréal Paris brands. Target output will be 200 million units in 2013 rising to 500 million at the end of the investment period in 2015.

Meanwhile the group has posted a downturn in third quarter growth from 4.6% compared with 5.7% and 6.4% in second and first quarters respectively. Sales of luxury cosmetics in the YSL, Kiehls, Armani and Lancôme ranges have increased by 6.6% in the reporting quarter against growth of 10.4% in the first six months of 2012. The downturn is said top be due mainly to the slowdown in Asia and in the travel retail sector.

Lancôme sales went up 10%, YSL by some 5% but mass market sales growth from LOréal Paris, Maybelline and Garnier was 4.9%, a marked improvement on the 4.7% of the first half. European growth was down 0.6% and sales growth slowed to 7.3% in the Asian market. However, growth of 7.1% was achieved in the US.