Unilever commits to investment plan

JAKARTA. British-Dutch multinational consumer goods company Unilever has reaffirmed its long-term commitment to Indonesia, as the multinational firm’s global CEO visited the State Palace on Friday to meet with President Joko “Jokowi” Widodo.

Unilever global CEO Paul Polman said that he pinned high hopes on the new government’s inclusive economic agenda, which is expected to lead to positive impacts to the company’s long-term presence in Indonesia.

“Most of Unilever’s revenues come from emerging markets. Indonesia is a very strategic market for Unilever due to its fast-growing middle class and the people’s high purchasing power potential,” Polman stated.

With full-year net sales of US$66 billion, Unilever is the world’s fourth biggest goods company after Nestle, Procter & Gamble (P&G) and PepsiCo, data from statistics portal Statista show.

In Indonesia, Unilever has had a presence through PT Unilever Indonesia since 1933. Unilever’s consumer goods products distributed here include Lifebuoy, Wall’s, Citra, Dove, Pond’s, Rinso, Sariwangi, Axe, Vaseline, Molto, Rexona, Zwitsal, Lux, Sunlight and Lipton, among others.

The company is listed in the Indonesia Stock Exchange (IDX) with the codename UNVR and its shares have already risen 11.5 percent this year, making them among the best performers locally, as Unilever’s performance has been triple the Jakarta Composite Index (JCI)’s year-to-date performance of 4.3 percent.

With market capitalization of
Rp 275 trillion ($21.2 billion), UNVR is the local index’s third-biggest mover this year, trailing behind two state-run firms, Bank Rakyat Indonesia (BBRI) and Bank Mandiri (BMRI), according to statistics from IDX.

With household consumption accounting for almost 60 percent of its gross domestic product (GDP), Indonesia has become the most sought-after market among consumer goods companies seeking to exploit the archipelago’s stable economic growth and rising numbers of middle-class consumers.

Among the recent high-profile investment realizations among consumer goods companies in Indonesia is the newly-built factory of French cosmetics giant L’Oréal in Cikarang, West Java, which officially opened in 2012 and became the company’s largest factory in the world with a total capital investment of Rp 1.2 trillion.

Meanwhile, Unilever itself has invested Rp 2 trillion in its new factory in the Sei Mangkei special economic zone in North Sumatra, which is expected to fully operate this year.

“The investment [in the Sei Mangkei special economic zone] is in line with the Indonesian government’s agenda of promoting economic growth outside of Java,” said Polman.

Over the last five years, Unilever has invested around Rp 8.5 trillion to expand the company’s presence in Indonesia and improve its factory infrastructure, he added.

During his meeting with Jokowi, Polman said that he also conveyed the plan to ensure that his company’s robust growth here would be followed by an even stronger positive multiplier effects to the Indonesian society.

“The Unilever Sustainable Living Plan is a forward-looking business model where only businesses with a positive impact to the society could grow and thrive,” the CEO explained, noting that the plan would need support from the government and the Indonesian society at large.