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apanese personal care manufacturer Mandom Corporation will begin relocating production of some of its products this year to the company’s Indonesian unit PT Mandom Indonesia (MI) in order to reduce surging production costs.

“Production costs in Japan have been very high. Here everything is far cheaper, including workers’ wages,” MI head for investor relations Alia Risyamaya Dewi told The Jakarta Post on Friday.

She said that the relocation would be carried out on production of cosmetics, fragrances and hair styling products manufactured for both men and women, especially for the Japanese, South Korean and Taiwanese markets.

“The production of these special products would be gradually shifted to Indonesia, but they will be exported and marketed in Japan, South Korea and Taiwan,” Alia said.

According to Alia, Mandom Corp. had chosen Indonesia because of the healthy performance of the company’s Indonesian subsidiary, MI, which currently produces 72,000 dozens (864,000 units) of personal care products annually from its current plant in Sunter, North Jakarta.

“75 percent of our production is for the domestic market, while the remaining 25 percent is exported to Southeast Asia countries, Dubai and to India,” Alia said.

She said that MI had also purchased a 14.6-hectare plot of land in Cibitung, West Java, at a price of Rp 80.43 billion (US$8.9 million) for the plant’s relocation.

She said that MI needed to build a new plant because the utilization of the existing production facilities had already reached 80 percent capacity. “In addition to that, the current factory location is also vulnerable to flooding. It is not safe if we decide to continue our business here for the long-term period,” she said.

The company’s sales during the first nine months reached a total of Rp 1.2 trillion (US$132.74 million), up 9.5 percent from Rp 1.086 trillion during the same period last year. Sales this year are expected to reach Rp 1.6 trillion.

“Next year we hope that our sales are able to reach Rp 2 trillion by the end of the year,” Alia said. (fem)