Unilever Indonesia Cuts Capex for 2017

Unilever Indonesia, one of the country's largest consumer goods producer, has set aside 115 million euro ($120 million) in capital expenditure for its factories expansion plan. (JG Photo/Dion Bisara)

By : Sarah Yuniarni | on 2:15 PM January 12, 2017
Category : Business, Corporate News

Jakarta. Unilever Indonesia, one of the country's largest consumer goods producer, has set aside 115 million euro ($120 million) in capital expenditure for its factories expansion plan.

The amount was 20 percent lower than Rp 2 trillion ($150 million) spent last year, when the company needed to move to a larger headquarters in Bumi Serpong Damai in Tangerang from the previous offices in downtown Jakarta.

"Our capital expenditure this year will be allocated to boost our production capacity in the company's factories existing location. We will also continue to innovate [our products] every year as we have so many new products innovation which we also keep introducing to the market," Unilever Indonesia president director Hemant Bakhsi said during the press conference on Wednesday (11/1).

However, he did not disclose whether to use internal company's spending or bank loans to fund the factory expansion.

Unilever Indonesia corporate secretary Sancoyo Antarikso said the company's capital expenditure will be spent mostly on supporting the company's factories expansion plan, especially in the home and personal care factories across Indonesia.

Unilever Indonesia, which trades under the UNVR ticker at Indonesia Stock Exchange, has nine factories in Cikarang, West Java, and Rungkut, East Java: six home and personal care factories, and three food factories, such as toothpaste products, soap bar products, Dove, liquid factory for personal care products, skin care factory, powder factory for home care, ice cream, margarine and tea products.

"We need to add the capacity for personal and home care factories. As a rule of thumb, our factories should not exceed 80 percent of production capacity," Sancoyo told reporters. The company plans to update each of its 40 brands, Sancoyo added.

Unilever's net income soared 14 percent to Rp 4.57 trillion in the first nine months of 2016 from Rp 4.18 trillion in the same period a year earlier.

Sales grew 9.3 percent to Rp 30 trillion in the period, with home and personal care contributing about two thirds of sales.

"We believe that the company's future in Indonesia would be very bright and the country's young and technically savvy consumers will contribute significantly for our future business growth," said Hemant.

With Rp 305.01 trillion in market capitalization, Unilever is among the top five of Indonesia's largest public companies.

Unilever's share price closed 0.31 percent lower to Rp 39,975 per share on Wednesday, dragging the benchmark index that also decline by 0.2 percent.

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